<PAGE>

                      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, 2000

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

                          Commission File No. 0-25681

                                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. [_]

  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, 2001, as reported by the OTC Bulletin Board was
approximately $3,295,624. The shares of Common Stock held by each officer and
director and by each person known to the Company who owns 5% or more of the
outstanding Common Stock have been excluded in that such persons may be deemed
to be affiliates. This determination of affiliate status is not necessarily a
conclusive determination for other purposes. As of February 28, 2001, the
Registrant had outstanding 13,996,950 shares of Common Stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for the 2001 Annual Meeting of
Stockholders are incorporated by reference into Parts I and III of this report.
<PAGE>

ITEM 1. BUSINESS

EXCEPT FOR HISTORICAL INFORMATION, THE FOLLOWING DESCRIPTION OF THE COMPANY'S
BUSINESS CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. THE OUTCOME OF THE EVENTS DESCRIBED IN THESE FORWARD-LOOKING
STATEMENTS IS SUBJECT TO RISKS AND ACTUAL RESULTS COULD DIFFER MATERIALLY. THE
SECTIONS ENTITLED "ITEM 1. BUSINESS - RISK FACTORS THAT COULD IMPACT FUTURE
OPERATING RESULTS", "ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" AS WELL AS THOSE DISCUSSED ELSEWHERE IN
THIS ANNUAL REPORT CONTAIN A DISCUSSION OF SOME OF THE FACTORS THAT COULD
CONTRIBUTE TO THESE DIFFERENCES.

Overview

     Bankrate, Inc. (the "Company") is an Internet consumer finance marketplace
that owns and operates a portfolio of Internet-based personal finance channels
including banking, investing, taxes and small business finance. 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 the best financial decisions. We regularly survey approximately 4,800
financial institutions in all 50 states in order to provide the most current
objective, unbiased rates on banking products such as mortgages, new and used
auto loans, credit cards and more. Hundreds of print and online partner
publications depend on Bankrate.com as the trusted source for financial rates
and information.

 On September 20, 2000, we changed our name from ilife.com, Inc. to Bankrate,
Inc.

     Since our online debut in 1996, Bankrate.com has won numerous awards and
accolades for its rate collection and distribution and original editorial
content. In the first half of 2000 alone, such prestigious organizations as
Forbes, Fortune, Yahoo!, Internet Life, Money and SmartMoney granted Bankrate
"Best of the Web" status.

     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,
email newsletters, and message boards allow users to interact with our site as
well as with other consumers.  Our new 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 download state and federal forms from
the Tax channel, obtain business tips from the Small Business channel and ask a
financial expert questions on the Advice channel.

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


For the year ended December 31:     2000  1999  1998
                                    ----  ----  ----

             Ad Views                405   288   104

             Page Views              136    89    40

Source of Data: Bankrate, Inc. server reports

                                       2
<PAGE>

     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 97
newspapers that have combined single day circulation in excess of 28.5 million
copies and three national magazines with combined monthly circulation in excess
of 2.5 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 11 U.S. metropolitan newspapers with combined single day
circulation in excess of 3.7 million copies. Together, these Bankrate.com
branded print activities have the potential of reaching 34.7 million readers
according to Editor & Publisher International 2000 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.

     We publish our editorial and research data online through our principal Web
site, Bankrate.com, and through distribution (or syndication) arrangements with
more than 190 third party Web sites. Bankrate.com contains information covering
over 100 financial products within 155 geographic markets, including at least
one market in each of the 50 states. The information includes data regarding
mortgage and home equity loans, credit cards, automobile loans, checking
accounts, ATM fees, and yields on savings instruments. Our unique information,
which is compiled by 38 researchers, is accompanied by extensive editorial
content designed to assist consumers with their decision-making process. Due to
estimates of our audience's average per capita income, level of education and
professional status, we believe this audience represents a very desirable target
customer for advertisers.

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. Because of the interactive nature of the Internet, where Web
technology allows us to display extensive research on financial products and
services that was previously unavailable to consumers, we believe we are able to
provide a superior vehicle to educate consumers in the selection and purchase
process.

     We believe the majority of financial information available on the Web is
oriented toward investment advice and providing business news and financial
market information, rather than personal and consumer finance data. Our
publications are targeted to fulfill the market need for personal and consumer
finance information.

     By expanding our comparative data regarding financial products and related
editorial content, we are creating a unique Web-based service designed to enable
our audience to keep abreast of personal finance trends and to better manage
their financial affairs. As a result, we believe we can assemble a loyal base of
users comprised of targeted audiences that are attractive to advertisers.

     Despite some general and forecasted weakness in advertising spending on the
Internet, we have seen steady interest in our primary niches - mortgages, car
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. will benefit from the anticipated growth in
Internet usage and spending on Internet advertising, direct marketing and
electronic commerce.

                                       3
<PAGE>

Restructuring

          We have spent much of the year 2000 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 taking as a direct result of our stategic reorganization
initiatives.

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

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

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

     .    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, our
          electronic 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.

Strategy

     We believe that the consumer-banking sector holds significant opportunities
for growth and expansion for a site like Bankrate.com. As we grow, we are
consolidating our position as the industry leader in the gathering of rate data
and in expanding 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 this "in-market"
consumer, we are helping advertisers lower their own costs in acquiring a new
customer, and ultimately creating a win-win-win transaction for the advertiser,
Bankrate.com and the consumer.

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 that drives
----------------------------------------------------------------------------
traffic to Bankrate.com: 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 resources: Our greatest resources are our people, our
--------------------------------
partners and our brand.  We carefully weigh every decision against these three
axis.

Insuring our long-term survival by reaching profitability as quickly as
-----------------------------------------------------------------------
possible: Our primary goal for the coming year is to reach a cash-flow positive
--------
state as quickly as possible. By developing a self-sustaining business, we will
be able to better control our own future successes.

Bankrate.com

     Bankrate.com provides consumers with financial data, research and editorial
information on non-investment financial products. The Company's team surveys
approximately 4,800 financial institutions every week in order to provide
objective rate information on banking products including mortgages, credit cards
and auto loans. Bankrate.com is unique in its approach to offering objective
rate information on 155 markets in all 50 states. We gather and present this
information by metropolitan area, which provides more valuable information to
consumers than aggregated national information and allows advertisers to target
prospective customers geographically.

     Bankrate.com also distributes electronic newsletters weekly to
approximately 200,000 subscribers covering topics such as mortgages, credit
cards, banking, small businesses, certificate of deposit rates, and Federal
Funds rates. We also maintain message

                                       4
<PAGE>

boards where visitors can post questions for members of the Bankrate.com
community. Topics parallel the channels offered by Bankrate.com.

Distribution Arrangements

     A significant portion of the traffic to Bankrate.com is 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 sites.

     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.

  The table below lists parties with which we have distribution agreements as of
December 31, 2000.

<TABLE>
     <S>                       <C>                              <C>
     America Online            Edmunds.com, Inc.                Nasdaq
     AT&T                      ePredict.com LLC                 Netscape
     Auto Site                 Esquire                          Newsalert
     Belo Interactive sites    FamilyMoney.com                  NewsMax.com
     BizRate                   FinancialWeb.com                 Oxygen Media
     Bloomberg                 Golf.com                         PricewaterhouseCoopers
     Broker Agent News         Hispanic Online                  RealTimes
     Business Today            HomeStore.com                    Realtor.com
     Carlist.com               Houston Chronicle                San Antonio Express
     CarPrices.com             Individual Investor Group, Inc.  San Diego Insider
     Carpoint                  Inman News Features              ScarsdaleNet.com
     Columbus Dispatch         Intellichoice                    Sign on San Diego
     Compuserve                Internet Stock News              Silicon Financial Group
     Cox Interactive sites     IPO.com, Inc.                    Smart Money Magazine
     CyberInvest.com           Job Sleuth                       Star Tribune
     Cycal, Inc.               JS Online                        Tegris
     Dealernet                 Kiplinger's                      Tennessean
     Digital Cities            Miami Herald                     US News & World Report
     Dizzy Duck                Microsoft Network                USA Today
     Dollar Stretcher          Military.com                     Village Online
     DotPlanet.com, Inc.       Milwaukee Journal Sentinel       Work.com
     EarthLink, Inc.           Money Magazine                   Yahoo!
     ECompare                  Motley Fool                      Your New House
     eComplaints.com           mySimon.com                      TechTV
</TABLE>

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 155 markets across
the United States from over 4,800 financial institutions.  The information
obtained includes not only interest rates and yields, but related data such as
lock periods, fees, points, and loan sizes for mortgages and grace periods, late
penalties, cash advance fees, cash advance APRs, APYs, minimum payments, and
terms and conditions for 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

                                       5
<PAGE>

the largest market in each state that does not include one of the largest 100
markets. We provide a comparative analysis of data by market 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, the Company tracks at least 10 institutions. In each of the smaller
markets we track three or more institutions. The Company verifies and adjusts,
if necessary, the institutions included in the survey group on an annual basis
using FDIC deposit data from year-end call reports. The Company does not include
credit unions in the market survey group since product availability is based
upon membership. The Company tracks the 50 largest U.S. credit unions as a
separate survey group for comparison purposes.

     All products included in our database have closely defined criteria so that
information provided by institutions is truly comparative in nature. Collected
data undergoes three 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 the researcher who gathers rates from
institutions. The researcher reviews the surveys to determine whether there have
been any changes in the data on a weekly basis. If there has been a change that
is outside of a specified range, the researcher verifies that the data is
correct by calling the institution. Once the data is verified, it is forwarded
to a senior researcher for review and approval. The third 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, in which we place calls to institutions in order to obtain rate
information without identifying ourselves as Bankrate.com. Such anonymous
shopping allows us 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. Institutions listed in our Bankrate.com
online tables who 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. 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 sites. 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.

     At the end of each weekly survey, data is archived as part of our 17-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, no conflicts of interests have compromised or are
expected to compromise our ability to provide independent and objective
research.

Editorial Content

     In addition to our research department, we maintain an editorial staff of
14 editors, writers and researchers, and a graphic artist who creates original
stories for our Web sites. We also have relationships with more than 20 free-
lance writers. Most of our editorial staff are experienced journalists with
newspaper or broadcast experience. For example, the reporters and editors of
Bankrate.com have professional journalistic work experience ranging from two to
31 years, with an average of 11 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.

     The overwhelming majority of the content within our Web sites is original
and produced internally. There is a limited amount of third-party content,
acquired under advertising revenue-sharing agreements and licenses, that allow
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.


                                       6
<PAGE>

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 sites.  These publications are as
follows:

     Consumer Mortgage Guide: We generate revenue through the sale of mortgage
     ------------------------
rate and product listings in 11 metropolitan newspapers across the United States
with combined Sunday circulation of 3.6 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 97 newspapers, which have combined Sunday circulation more than 28.5
million copies and three national magazines with combined monthly circulation in
excess of 2.5 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

     Despite the success of our award-winning "Every Percent Counts" ad campaign
in 1999, we determined that going forward, our resources would be better
leveraged by expanding non-cash intensive advertising, including a new affiliate
program, greatly expanding our barter effort and emphasizing our co-branding
model, which requires minimal up-front payments. In addition, we completed a
series of limited online advertising buys during fiscal 2000, using in-house
talent to purchase and track the advertising as well as in developing creative.

Advertising Sales

     Our advertising sales staff consists of 13  salespeople and support staff.
Most of our salespersons are located in our North Palm Beach corporate
headquarters and we maintain two smaller satellite offices in New York and Los
Angeles. Each salesperson is responsible for a designated geographic area
covering the Southeast, Mid-Atlantic, New England, Great Lakes, Midwest, Great
Plains, Northwest or Southwest regions of the United States. Salespeople sell
advertising related to our Web sites and the Consumer Mortgage Guide. We believe
our sales force is highly effective.

     Our salespeople present advertising solutions to potential advertisers
using inventory created by our Web sites as well as the 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 three different
approaches:

        .  Targeting specific geographic and product areas; for example,
           mortgage rates in Atlanta, Georgia;

        .  Targeting specific product channels; for example, all borrowers
           interested in the home equity channel; or

        .  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

                                       7
<PAGE>

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 $133 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 $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 hyper linked 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. The
actual rates for hyperlinks range from $39 to $50 CPM.

E-Mail Sponsorships

     We issue daily and weekly e-mail newsletters to customers who request them.
Advertisers can sponsor the e-mails with text listings that are hyper linked to
their Web site. The cost for sponsoring an e-mail newsletter is between $0.05
and $0.15 per subscriber.

Chat Room Sponsorships

     We offer advertisers chat rooms in Bankrate.com where they may promote
their spokespeople or products and acquire valuable real-time feedback from
consumers.

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, 2000,
we had approximately 55 graphical advertisers and 240 hyperlink advertisers. A
representative sample of our national and regional advertisers includes:

<TABLE>
    <S>                                       <C>                                   <C>
    Advanta Bank Corp.                        Home Finance of America               Secured Funding Corp.
    American Express                          iHomeowner, Inc.                      SNFB Bank
    Annapolis Federal Mortgage                IndyMac Bank  / IndyMac Mortgage      South Trust Mortgage Corp.
    Bank Caroline                             ING Direct                            State Farm Bank
    BankDirect                                Juniper Financial Corporation         Umbrellabank.copm
    Bank One                                  Lasalle Bank                          Virtual Bank
    Bank of America                           Magnolia Mortgage Corp.               Washington Mutual
    Capital One Bank                          Manhattan Mortgage Corp.              Wells Fargo Bank
    Carteret Mortgage Corp.                   McCurdy Mortgage Corp.                WingspanBank.com
    Chase Manhattan Bank                      Middlesex Savings Bank
    Citibank                                  Mortgage Expo
    DeepGreen Bank                            Net Bank
    Discover Bank                             Nexity Bank
    Downey Savings & Loan                     Next Card
    E*Trade Bank                              NJ Mortgage Bankers Corp
    E-Loan / Car Finance                      Ameritrade
    Equitable Mortgage Corp.                  Ohio Savings Bank
    First Republic Mortgage Corp.             People First Finance
    FISN, Inc.                                Presidential Bank
    Full Spectrum Lending, Inc.               Providian Bank / Providian Financial
    Giantbank.com                             Prudential Bank
    Gorman & Gorman Mortgage Services         Pulaski Bank
</TABLE>

                                       8
<PAGE>

    Greenpoint Mortgage                Riverway Bank
    Hart West Financial, Inc.          Royal Mortgage

     All of the listed advertisers have been our customers for at least six
months and are representative of the types of industries, as well as national
and regional scope of our advertising base.

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 the Company.  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; and

   .  E-commerce sites that provide bank and credit product information such as
      e-Loan and GetSmart.

     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
differentiates us from our competitors.

Operations

     We host our proprietary Web sites and control all of our network operations
from our principal office in North Palm Beach, Florida. Internet access is
maintained through a fiber optic data circuit with AT&T. The computer equipment
used to operate our Web sites is powered by uninterruptible power supply units
and a 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.

     Employees

     As of December 31, 2000, we had 111 full-time employees, of which 20 were
in Web site and content operations, 21 in  sales, business development and
marketing,  38 in content and data research, five in advertising revenue
operations, 13 in product development and information technology,  eight in
finance and accounting, and six 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
mutually terminated effective June 1, 2000 and all leased employees became
direct employees of the Company.

Risk Factors that Could Impact Future Operating Results

We have a history of losses and could run out of cash

     We have incurred net losses in each of our last five fiscal years. We had
an accumulated deficit of approximately $59 million as of December 31, 2000.
Therefore, we believe that period-to-period comparisons of our financial results
should not be relied on as an indication of our future performance. We
anticipate that we will incur operating losses and negative cash flows in the
foreseeable future.

     We are working to manage our cash by actively controlling expenses and
pursuing additional sources of revenue. For instance, we substantially reduced
marketing expenditures beginning in January 2000 compared to the second half of
1999, and followed through with plans to sell or curtail development of certain
under-performing, non-core business units. We sold

                                       9
<PAGE>

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 to Consolidated Financial Statements, Notes 5
& 6). These divestitures yielded cash of approximately $4,392,000 and will
result in lower operating expenses. In June 2000, we reduced employment levels
of continuing operations by approximately 10% and began efforts to consolidate
our physical locations. Based on these actions and our current plan, we believe
our existing liquidity and capital resources will be sufficient to satisfy our
cash requirements into 2002. There are no assurances that such actions will
ensure cash sufficiency through 2002 or that reducing marketing expenses will
not potentially curtail revenue growth.

     We 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, or an acquisition; or
raising new debt and/or equity capital.  There can be no assurance that we will
be able to raise such funds or realize our strategic alternatives on favorable
terms or at all.

     Further, due to the legal matters discussed in Item 7. and Item 8., Notes
to Consolidated Financial Statements, Note 10, which we intend to vigorously
defend, management could be required to spend significant amounts of time and
resources defending these matters which may impact our operations.

Our success depends upon Internet advertising revenue

     We expect to derive more than 70% of our revenues for the foreseeable
future through the sale of advertising space and hyperlinks on our Internet Web
pages. Our revenue, excluding barter revenue, for 2001 is projected to be
relatively flat compared to 2000. 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.

     Currently, a number of different pricing models are used to sell
advertising on the Internet. Pricing models are typically either CPM-based (cost
per thousand) 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 is payable on each
individual click even though it may take multiple advertisement impressions to
generate one clickthrough. 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, our business could be adversely affected.

We use barter transactions which do not generate cash revenue

     Revenue from barter transactions represented approximately 5% of total
revenue for the year ended December 31, 2000. Barter revenue may represent a
significant portion of our total revenue in future periods. Barter transactions
do not generate any cash revenue 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 upon interest rate activity and mortgage refinancing

     We provide interest rate information for mortgages and other loans, credit
cards and savings accounts. Visitor traffic to Bankrate.com may increase with
interest rate movements and decrease with interest rate stability. Factors that
have caused

                                       10
<PAGE>

significant visitor fluctuations in the past have been Federal Reserve Board
actions and general market conditions affecting home mortgage interest rates.
During 2000, approximately 23% 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 promoting Bankrate.com products
aggressively. We cannot be certain that we will be successful in these efforts.

Our success depends upon 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 2000, approximately 41% 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 upon 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 develop 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,
developing 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 developing 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 names or if we incur significant expense in doing so, it
could have a material adverse effect on our business.

Our markets are highly competitive

     We compete for Internet advertising revenues with a number of finance-
related Web sites, such as MarketWatch.com, CNNfn.com, 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.

                                       11
<PAGE>

     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 may 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. Any
such claims, with or without 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.

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 in our management

     Our officers and directors beneficially own approximately 58% of the
Company's outstanding common stock. Peter C. Morse, our largest shareholder,
beneficially owns approximately 40% of the Company's 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.

                                       12
<PAGE>

Our rapid growth may strain our operations

     Since we began our Internet operations in 1996, we have expanded our
operations significantly, and we may continue to do so. Our future expansion may
place a significant strain on our management. To manage the expected growth of
our operations and personnel, we may need to expand and improve our existing
management team, and our operational and financial systems. If we fail to expand
and improve these systems in a timely manner, this failure could have a material
adverse effect on our business.

Our new managers must work together effectively as a team

     We have recently added key managerial, technical and operations personnel.
For example, our President and Chief Executive Officer was hired in April 2000,
and our Senior Vice President-Chief Revenue Officer was hired in August 2000.
During the year ended December 31, 2000, we have also replaced personnel in
various positions throughout the Company. These new personnel must integrate
themselves into our daily operations and work effectively as a team in order for
us to be successful. We cannot be certain that this will occur in all instances.

Our success depends upon management and key employees

     Our success depends largely upon retaining the continued services of our
executive officers and other key management, and 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. Key employees include
Elisabeth DeMarse, G. Cotter Cunningham, Robert J. DeFranco and Edward L.
Newhouse.  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.

Our Articles of Incorporation and Bylaws, as well as Florida law, may prevent or
delay a future takeover

     Our Articles of Incorporation and Bylaws may have the effect of delaying or
preventing a merger or acquisition, or making such a transaction less desirable
to a potential acquirer, even when shareholders may consider the acquisition or
merger favorable. For example, our Articles of Incorporation and Bylaws provide
that: (1) the board of directors has the authority, without shareholder
approval, to issue up to 10,000,000 shares of preferred stock and to determine
the rights (including voting rights) associated with such preferred stock (which
issuance may adversely affect the market price of the common stock and the
voting rights of the holders of common stock); (2) the board of directors is
classified and directors have three-year terms; (3) cumulative voting for the
election of directors is prohibited; (4) approval by 66 2/3% of the shareholders
is required for material amendments to the Articles of Incorporation or Bylaws:
and (5) certain procedures must be followed before matters can be proposed by
shareholders for consideration at shareholder meetings. Florida law also
contains "control share acquisition" and "affiliate transaction" provisions that
may also delay, prevent, or discourage an acquisition of or merger with
Bankrate, Inc.

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 result in 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.

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.

                                       13
<PAGE>

     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, 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. In addition, following periods of downward volatility in the
market price of a company's securities, class action litigation is often brought
against the Company. Downward volatility of our stock prices could lead to class
action litigation, resulting in substantial costs and a diversion of our
management's attention and resources. See Item 3. Legal Proceedings below.

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
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. The Company also leases
approximately 500 square feet on a month-to-month basis in Irvine, California
that is used principally as a sales office.

ITEM 3.  LEGAL PROCEEDINGS

     On March 28, 2000, a purported class-action lawsuit was filed against the
Company and certain of its directors and officers, its auditor and underwriters
in the United States District Court for the Southern District of New York (Civil
Action No. 00CIV.2337). The action, which seeks an unspecified amount of money
damages, was filed purportedly on behalf of all stockholders who purchased
shares of our stock during the period from May 13, 1999 through March 27, 2000.
The plaintiff alleges that the Company violated federal securities laws by,
among other things, misrepresenting and/or omitting material information
concerning the Company's financial results for the quarter ended March 31, 1999,
and other financial information, in its registration statement and prospectus
filed with the Securities and Exchange Commission in connection with the
Company's initial public offering. The plaintiff alleges, among other things,
that the Company failed to disclose in its registration statement and prospectus
the fact that the Company incurred a net loss of approximately $6 million in the
quarter ended March 31, 1999. The plaintiff alleges that the information was not
made public until May 24, 1999, when the Company issued a press release with
respect to the results for that quarter. The Company contends that the loss for
the quarter ended March 31, 1999 was properly disclosed. The Company has filed a
motion to dismiss this complaint and the motion has been submitted to the court
however, no decision has been rendered. If the motion is denied the Company
intends to vigorously defend against the lawsuit. Damages, if any, would be
substantially covered by insurance.

     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. 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. 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 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 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
or results of operations.

     In July 2000, the Company sold its former wholly owned subsidiary,
Professional Direct Agency, Inc. ("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

                                       14
<PAGE>

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.

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

  None.

ITEM 4A. EXECUTIVE OFFICERS AND DIRECTORS OF THE REGISTRANT

     The names, ages at December 31, 2000, and current positions of Bankrate,
Inc.'s current executive officers are listed below in accordance with General
Instruction G(3) of Form 10-K and Instruction 3 of Item 401(b) of Regulation S-
K. Unless otherwise stated, each executive officer has held their position for
at least the last five years. 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.

     Elisabeth DeMarse, 45, has served as President and Chief Executive Officer
of the Company since April 27, 2000. Prior to that time, Ms. DeMarse served as
Executive Vice President of International Operations at Hoover's, Inc. which
operates Hoover's Online since February 1999. Previously, she was an Executive
Vice President at Bloomberg L.P., where, as a member of the executive management
team, she helped grow the company to $1.5 billion from $50 million in revenue.
Ms. DeMarse spent ten years at Bloomberg L.P. in a leadership position 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. At Bloomberg,
she arranged more than 20 major deals and new business ventures and redefined
the company's brand to extend beyond professional financial services to a
broader range of personal service offerings. 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 MBA from Harvard with
an emphasis on Marketing.

     G. Cotter Cunningham, 38, 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 Office of the Company since February
25, 2000. Prior to that time, he served as Senior Vice President-Marketing and
Sales of the Company since February 1999. From August 1997 to January 1999, Mr.
Cunningham was Vice President and General Manager of Valentine McCormick
Ligibel, Inc., an advertising agency specializing in new media. From August 1992
to July 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, 44, has served as Senior Vice President-Chief Financial
Officer of the Company since September 2000. Prior to that he served as Vice
President - Finance and Chief Accounting Officer since March 1999. 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. 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. Mr. DeFranco is a
Certified Public Accountant and a member of the 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, 41, 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, ecommerce and direct marketing products representing such marquee
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.

                                       15
<PAGE>

                                    PART II

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

     (a)  Bankrate, Inc.'s Common Stock traded on the Nasdaq National Market
under the symbol "RATE" from September 25, 2000 when the Company changed its
name from ilife.com, Inc. to Bankrate, Inc., until January 29, 2001. From May
13, 1999 to September 25, 2000, the Company's Common Stock traded on the Nasdaq
National Market under the symbol "ILIF". Prior to that time there was no
established market for the shares.

     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 price per share reflected in the table below represents the range of
low and high closing sale prices for the Company's Common Stock as reported by
the Nasdaq National Market for the periods indicated:

                                                         HIGH        LOW
                                                         ----        ---
Year ended December 31, 1999
First quarter.....................................     $     -      $     -
 Second quarter...................................      13.000        6.125
 Third quarter....................................       7.813        3.813
 Fourth quarter...................................       7.313        3.375
Year ended December 31, 2000
 First quarter....................................     $ 5.750      $ 2.625
 Second quarter...................................       3.000        1.125
 Third quarter....................................       2.000        1.000
 Fourth quarter...................................       1.438        0.688

     The closing sale price of the Company's Common Stock as reported by the OTC
Bulletin Board on February 28, 2001 was U.S. $0.5620 per share.

     The number of shareholders of record of the Company's Common Stock as of
February 28, 2001, was approximately 2,423.

     As of February 28, 2001, options to purchase 2,072,386 shares of the
Company's common stock were outstanding of which 848,187 were exercisable.

     The Company has never paid cash dividends on its capital stock. The Company
currently intends to retain any earnings for use in the business and does not
anticipate paying any cash dividends in the foreseeable future.

                                       16
<PAGE>

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, 2000 and 1999, the six months
ended December 31, 1998 and the year ended June 30, 1998, and the consolidated
balance sheet data as of December 31, 2000 and 1999, 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 years ended June 30, 1997 and 1996, and the
consolidated balance sheet data as of June 30, 1997 and 1996 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,
                                                         2000(A)      1999(B)          1998         1998         1997        1996
                                                         -------      -------          ----         ----         ----        ----
<S>                                                   <C>           <C>            <C>          <C>         <C>          <C>
Consolidated Statement of Operations Data
(In thousands, except share and
per share data)
Revenue:
  Online publishing                                   $    12,283   $     8,497    $    1,809   $    1,281   $      485  $       70
  Print publishing and licensing                            2,922         3,473         1,660        2,559        2,058       1,558
                                                      -----------   -----------    ----------   ----------   ----------  ----------
       Total revenue                                       15,205        11,970         3,469        3,840        2,543       1,628
                                                      -----------   -----------    ----------   ----------   ----------  ----------
Cost of revenue:
  Online publishing                                         7,114         5,627         1,424        1,340        1,002         286
  Print publishing and licensing                            1,983         2,387         1,101        1,961        1,186         971
                                                      -----------   -----------    ----------   ----------   ----------  ----------
       Total cost of revenue                                9,097         8,014         2,525        3,301        2,188       1,257
                                                      -----------   -----------    ----------   ----------   ----------  ----------
Gross margin                                                6,108         3,956           944          539          355         371
                                                      -----------   -----------    ----------   ----------   ----------  ----------
Operating expenses:
  Sales                                                     3,234         2,977           838          706          131         137
  Marketing                                                 3,874        16,459           305          145            1          34
  Product development                                       1,940         2,017           450          698          260         199
  General and administrative expenses                       7,165         6,159           871        1,663          768         522
  Restructuring and impairment charges                      2,285             -             -            -            -           -
  Depreciation and amortization                               874           422            98           66           74          98
  Goodwill amortization                                       231           186             -            -            -           -
  Noncash stock based compensation                          1,312         3,305           669           89            -           -
                                                      -----------   -----------    ----------   ----------   ----------  ----------
                                                           20,915        31,525         3,231        3,367        1,234         990
                                                      -----------   -----------    ----------   ----------   ----------  ----------
       Loss from operations                               (14,807)      (27,569)       (2,287)      (2,828)        (879)       (619)
Other income (expense), net                                   230           873           192           46          (77)        (53)
Noncash financing charge                                        -        (2,656)            -            -            -           -
                                                      -----------   -----------    ----------   ----------   ----------  ----------
  Loss before income taxes and
    discontinued operations                               (14,577)      (29,352)       (2,095)      (2,782)        (956)       (672)
Income taxes from continuing operations                         -             -             -            -            -           -
                                                      -----------   -----------    ----------   ----------   ----------  ----------
  Loss before discontinued operations                     (14,577)      (29,352)       (2,095)      (2,782)        (956)       (672)
                                                      -----------   -----------    ----------   ----------   ----------  ----------
Discontinued operations:
  Loss from discontinued operations                        (3,215)       (2,136)            -            -            -           -
  Gain on disposal of discontinued operations                 871             -             -            -            -           -
                                                      -----------   -----------    ----------   ----------   ----------  ----------
                                                           (2,344)       (2,136)            -            -            -           -
                                                      -----------   -----------    ----------   ----------   ----------  ----------
  Net loss                                                (16,921)      (31,488)       (2,095)      (2,782)        (956)       (672)
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                 $   (16,921)  $   (33,769)   $   (6,533)  $   (2,782)  $     (956) $     (672)
                                                      ===========   ===========    ==========   ==========   ==========  ==========
Basic and diluted net loss per share:
  Loss before discontinued operations                 $     (1.05)  $     (2.90)   $    (0.52)  $    (0.72)  $    (0.20) $    (0.13)
  Discontinued operations                                   (0.17)        (0.21)            -            -            -           -
                                                      -----------   -----------    ----------   ----------   ----------  ----------
  Net loss                                                  (1.22)        (3.11)        (0.52)       (0.72)       (0.20)      (0.13)
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                 $     (1.22)  $     (3.34)   $    (1.63)  $    (0.72)  $    (0.20) $    (0.13)
                                                      ===========   ===========    ==========   ==========   ==========  ==========
Weighted average shares outstanding used in
  basic and diluted per-share calculation              13,872,788    10,113,928     4,018,700    3,846,200    4,743,590   5,000,000
                                                      ===========   ===========    ==========   ==========   ==========  ==========
<CAPTION>
                                                                   As of December 31,                        As of June 30,
                                                          2000          1999          1998         1998         1997         1996
                                                          ----          ----          ----         ----         ----         ----
<S>                                                   <C>           <C>            <C>          <C>          <C>         <C>
Consolidated Balance Sheet Data
(In thousands)
Cash and cash equivalents                             $     8,891   $    22,492    $    1,633   $      910   $    1,783  $        -
Working capital                                             7,057        18,973           658          164          887      (1,649)
Total assets                                               12,634        32,600         3,099        1,768        2,193         311
Subordinated note payable                                   4,350         4,350             -            -            -           -
Redeemable preferred stock                                      -             -        12,198            -            -           -
Total stockholders' equity (deficit)                        1,573        17,445       (10,985)         657        1,035      (1,508)
</TABLE>
---------
(A) Excludes the operations of CPNet.com after May 2000 and Pivot after July
    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 dates.
                                        17
<PAGE>

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

     The following discussion should be read in conjunction with the
consolidated financial statements and related notes contained in this Form 10-K.
The following 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 comparable terminology. The forward-looking statements
contained in this Form 10-K involve known and unknown risks, uncertainties and
other factors that may cause the Company's or our industry's actual results,
level of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by these statements. These factors include those listed under Item 1.
Business "Risk Factors That Could Impact Future Operating Results" 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.

  Overview

     Bankrate, Inc. ("Bankrate" or the "Company") is an Internet consumer
finance marketplace that owns and operates a portfolio of Internet-based
personal finance channels including banking, investing, taxes and small business
finance. The Company's 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, the Company provides 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 the best financial decisions. We regularly survey approximately
4,800 financial institutions in 50 states in order to provide the most current
objective, unbiased rates on banking products such as mortgages, new and used
auto loans, credit cards and more. Hundreds of print and online partner
publications depend on Bankrate.com as the trusted source for financial rates
and information.

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

     Since our online debut in 1996, Bankrate.com has won numerous awards and
accolades for its rate collection and distribution and original editorial
content. In the first half of 2000 alone, such prestigious organizations as
Forbes, Fortune, Yahoo!, Internet Life, Money and SmartMoney granted Bankrate
"Best of the Web" status.

     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, email
newsletters, and message boards allow users to interact with our site as well as
with other consumers.  Our new - and very popular - Rate Trend Index is a weekly
poll of industry insiders designed to help consumers forecast interest rate
trends.

     We've 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 download state and federal forms from
the Tax channel, get business tips from the Small Business channel and ask a
financial expert money questions on 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.

     Recent Developments

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

                                       18
<PAGE>

     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 of the Company. 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.

     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 for all periods presented.
The Company recorded a gain on the sale of $871,212 in the quarter ending
September 30, 2000.

     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 was shut down and the
remaining goodwill of approximately $73,000 was written off.

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

     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

                                       19
<PAGE>

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 become exercisable in equal monthly increments commencing on April 30,
2001 and concluding on March 31, 2002. The Company will recognize compensation
expense of approximately $217,000 over the vesting period.

     On April 27, 2000, Elisabeth DeMarse was appointed 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. Upon Ms. DeMarse's termination of
employment for certain reasons (i.e., without cause, disability, resignation for
good reason (as defined in the agreement), or a change of control), the Company
agrees 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
otherwise extended by the parties. Ms. DeMarse was also granted options to
purchase 541,936 shares of the Company's 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 options vest as to 25% of
the shares six months from the date of grant; and as to the remaining 75%, in
equal monthly installments over the next 18 months thereafter, with 100% vesting
on the second anniversary of the date of grant.

     On May 17, 2000, the Company 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. 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.

     In June 2000, the Company 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 pertains 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, 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 relates to the shut down and sale of assets of
Consejero.com and other non-core assets. The remaining $476,000 results from the
write down of the GreenMagazine.com goodwill discussed above.

     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 were paid in 2000.

     On September 20, 2000, the Company changed its name from ilife.com, Inc. to
Bankrate, Inc. and changed its Nasdaq National Market stock symbol from ILIF to
RATE.

     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.

                                       20
<PAGE>

     Legal Proceedings

     On March 28, 2000, a purported class-action lawsuit was filed against the
Company and certain of its directors and officers, its auditor and underwriters
in the United States District Court for the Southern District of New York (Civil
Action No. 00CIV.2337). 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 stock during the period from May 13, 1999 through March
27, 2000. The plaintiff alleges that the Company violated federal securities
laws by, among other things, misrepresenting and/or omitting material
information concerning the Company's financial results for the quarter ended
March 31, 1999, and other financial information, in its registration statement
and prospectus filed with the Securities and Exchange Commission in connection
with the Company's initial public offering. More particularly, the plaintiff
alleges, among other things, that the Company failed to disclose in its
registration statement and prospectus the fact that the Company incurred a net
loss of approximately $6 million in the quarter ended March 31, 1999. The
plaintiff alleges that the information was not made public until May 24, 1999,
when the Company issued a press release with respect to the results for that
quarter. The Company contends that the loss for the quarter ended March 31,
1999, was properly disclosed. The Company has filed a motion to dismiss this
complaint and the motion has been submitted to the court however, no decision
has been rendered. If the motion is denied the Company intends to vigorously
defend against the lawsuit. Damages, if any, would be substantially covered by
insurance.

     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.  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.  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 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 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 or results of operations.

     In July 2000, the Company sold its former wholly owned subsidiary,
Professional Direct Agency, Inc. ("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.

The following are descriptions of the revenue and expense components of our
statement of operations:

Online publishing revenue

     The Company sells graphical advertisements on its Web site (including co-
branded sites) consisting of banner, badge,  billboard and poster
advertisements. Such advertising is 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 we have
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 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.
Additionally, the Company generates 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.
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 gross 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 also includes barter revenue which represents the
exchange by the Company of advertising space on the Company's web site for
reciprocal advertising space or traffic on other web sites. Barter revenues and
expenses are

                                       21
<PAGE>

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 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 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 barter revenue is recognized. If the advertising
impressions are received from the customer prior to the Company delivering the
advertising impressions, a liability is recorded. If the Company delivers
advertising impressions to the other companies' Web sites prior to receiving the
advertising impressions, a prepaid expense is recorded. At December 31, 2000,
the Company recorded a prepaid expense of approximately $200,000 for barter
advertising to be received. Barter revenue was approximately $757,000 and
represented approximately 5% of total revenue for the year ended December 31,
2000. No barter revenue was recorded in prior periods.

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 Consumer Mortgage Guide in a print publication. Advertising revenue
and commission income is recognized when 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.

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 sites.
These costs increase with gains in traffic to our sites. 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 sites 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 of compensation and benefits, facilities costs, telephone costs and
computer systems expenses.

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 Consumer Mortgage Guide, personnel costs,
printing and allocated overhead.

     Sales costs represent direct selling expenses, principally for online
advertising, and include sales commissions, personnel costs and allocated
overhead.

     Marketing costs represent expenses associated with expanding brand
awareness of our products and services to consumers and include advertising,
including banner advertising, marketing and promotion costs.

     Product development costs represent payroll and related expenses for site
development, network systems and telecommunications infrastructure support,
contract programmers and consultants and other technology costs.

     General and administrative expenses represent compensation and benefits for
administration, advertising management, accounting and finance, facilities
expenses, professional fees and non-allocated overhead.

     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.

     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 is between three to five years.

     Noncash stock based compensation represents expenses associated with stock
grants to our officers and employees as additional compensation for their
services.



                                       22
<PAGE>

     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. Also 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.

     We have compared our results of operations for the years ended December 31,
2000 and 1999, the years ended December 31, 1999 and 1998, and the years ended
June 30, 1998 and 1997. All periods presented have been revised to reflect Pivot
as discontinued operations.

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


<TABLE>
<CAPTION>
                                                                                         Six Months
                                                                                           Ended
                                                         Year Ended December 31,        December 31,       Year Ended June 30,
                                                         -----------------------        ------------       -------------------
                                                              2000        1999             1998        1998        1997        1996
                                                              ----        ----             ----        ----        ----        ----
     <S>                                                 <C>         <C>            <C>           <C>         <C>         <C>
     Consolidated Statements of Operations Data

     Revenue:
        Online publishing                                    80.8%       71.0%            52.1%       33.4%       19.1%        4.3%
        Print publishing and licensing                       19.2        29.0             47.9        66.6        80.9        95.7
                                                         --------    --------         --------    --------    --------    --------
              Total revenue                                 100.0       100.0            100.0       100.0       100.0       100.0
                                                         --------    --------         --------    --------    --------    --------
     Cost of revenue:
        Online publishing                                    46.8        47.0             41.0        34.9        39.4        17.6
        Print publishing and licensing                       13.0        19.9             31.7        51.1        46.6        59.6
                                                         --------    --------         --------    --------    --------    --------
              Total cost of revenue                          59.8        67.0             72.8        86.0        86.0        77.2
                                                         --------    --------         --------    --------    --------    --------
     Gross margin                                            40.2        33.0             27.2        14.0        14.0        22.8
                                                         --------    --------         --------    --------    --------    --------
     Operating expenses:
        Sales                                                21.3        24.9             24.2        18.4         5.2         8.4
        Marketing                                            25.5       137.5              8.8         3.8           -         2.1
        Product development                                  12.8        16.9             13.0        18.2        10.2        12.2
        General and administrative expenses                  47.6        51.5             25.1        43.3        30.2        32.1
        Restructuring and impairment charges                 14.6           -                -           -           -           -
        Depreciation and amortization                         5.7         3.5              2.8         1.7         2.9         6.0
        Goodwill amortization                                 1.5         1.6                -           -           -           -
        Noncash stock based compensation                      8.6        27.6             19.3         2.3           -           -
                                                         --------    --------         --------    --------    --------    --------
                                                            137.6       263.4             93.1        87.7        48.5        60.8
                                                         --------    --------         --------    --------    --------    --------
              Loss from operations                          (97.4)     (230.3)           (65.9)      (73.6)      (34.6)      (38.0)
                                                         --------    --------         --------    --------    --------    --------
     Other income (expense), net                              1.5         7.3              5.5         1.2        (3.0)       (3.3)
     Noncash financing charge                                   -       (22.2)               -           -           -           -
                                                         --------    --------         --------    --------    --------    --------
        Loss before income taxes and
          discontinued operations                           (95.9)      245.2            (60.4)      (72.4)      (37.6)      (41.3)
     Income taxes from continuing operations                    -           -                -           -           -           -
                                                         --------    --------         --------    --------    --------    --------
        Loss before discontinued operations                 (95.9)     (245.2)           (60.4)      (72.4)      (37.6)      (41.3)
                                                         --------    --------         --------    --------    --------    --------
     Discontinued operations:
        Loss from discontinued operations                   (21.1)      (17.8)               -           -           -           -
        Gain on disposal of discontinued operations           5.7           -                -           -           -           -
                                                         --------    --------         --------    --------    --------    --------
                                                            (15.4)      (17.8)               -           -           -           -
                                                         --------    --------         --------    --------    --------    --------
        Net loss                                           (111.3)     (263.1)           (60.4)      (72.4)      (37.6)       (41.3)
     Accretion of Convertible Series A and
       Series B preferred stock to redemption value             -      (19.10)               -           -           -           -
     Charge for conversion of nonredeemable convertible
       Series A preferred stock to redeemable                   -           -          (127.93)          -           -           -
                                                         --------    --------         --------    --------    --------    --------
        Net loss applicable to common stock                (111.3)%    (282.1)%         (188.3)%     (72.4)%     (37.6)%     (41.3)%
                                                         ========    ========         ========    ========    ========    ========
</TABLE>


     The following table displays selected financial data for the years ended
December 31, 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,
                                                                    2000           1999            1998          1997
                                                                    ----           ----            ----          ----
    Consolidated Statement of Operations Data                                                   (Unaudited)   (Unaudited)
    (In thousands, except share and per share data)
    <S>                                                          <C>            <C>             <C>           <C>
    Revenue:
      Online publishing                                          $    12,283    $     8,497     $    2,582    $      847
      Print publishing and licensing                                   2,922          3,473          3,039         2,260
                                                                 -----------    -----------     ----------    ----------
           Total revenue                                              15,205         11,970          5,621         3,107
                                                                 -----------    -----------     ----------    ----------

    Cost of revenue:
      Online publishing                                                7,114          5,627          2,203         1,130
      Print publishing and licensing                                   1,983          2,387          2,105         1,578
                                                                 -----------    -----------     ----------    ----------
           Total cost of revenue                                       9,097          8,014          4,308         2,708
                                                                 -----------    -----------     ----------    ----------
    Gross margin                                                       6,108          3,956          1,313           399
                                                                 -----------    -----------     ----------    ----------

    Operating expenses:
      Sales                                                            3,234          2,977          1,406           200
      Marketing                                                        3,874         16,459            432            19
      Product development                                              1,940          2,017            915           355
      General and administrative expenses                              7,165          6,159          1,840         1,278
      Restructuring and impairment charges                             2,285              -              -             -
      Depreciation and amortization                                      874            422            140            67
      Goodwill amortization                                              231            186              -             -
      Noncash stock based compensation                                 1,312          3,305            757             -
                                                                 -----------    -----------     ----------    ----------
                                                                      20,915         31,525          5,490         1,919
                                                                 -----------    -----------     ----------    ----------
           Loss from operations                                      (14,807)       (27,569)        (4,177)       (1,520)
    Other income (expense), net                                          230            873            203           (10)
    Noncash financing charge                                               -         (2,656)             -             -
                                                                 -----------    -----------     ----------    ----------
      Loss before income taxes and
        discontinued operations                                      (14,577)       (29,352)        (3,974)       (1,530)
    Income taxes from continuing operations                                -              -              -             -
                                                                 -----------    -----------     ----------    ----------
      Loss before discontinued operations                            (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                                                       (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                        $   (16,921)   $   (33,769)    $   (8,412)   $   (1,530)
                                                                 ===========    ===========     ==========    ==========

    Basic and diluted net loss per share:
      Loss before discontinued operations                        $     (1.05)   $     (2.90)    $    (1.01)   $    (0.35)
      Discontinued operations                                          (0.17)         (0.21)             -             -
                                                                 -----------    -----------     ----------    ----------
      Net loss                                                         (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                        $     (1.22)   $     (3.34)    $    (2.14)   $    (0.35)
                                                                 ===========    ===========     ==========    ==========

    Weighted average shares outstanding used in
      basic and diluted per-share calculation                     13,872,788     10,113,928      3,925,597     4,383,586
                                                                 ===========    ===========     ==========    ==========

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

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Revenue

     Total revenue for the year ended December 31, 2000 of $15,204,765 increased
$3,235,080, or 27%, over the comparable period in 1999. Online publishing
revenue increased $3,785,890 or 45%, to $12,282,795, and represented 81% of
total revenue in 2000 compared to 71% in same period in 1999. These increases
were due to higher levels of advertising sales and higher advertising rates
(approximately 12% higher average rates in 2000 compared to 1999) facilitated by
an increase in advertising inventory (approximately 40% higher available
inventory in 2000 compared to 1999). Our revenue, excluding barter revenue, for
2001 is projected to be relatively flat compared to 2000.

     Print publishing and licensing revenue decreased $550,810, or 16%, to
$2,921,970 during the year ended December 31, 2000 due primarily to a  $590,199,
or 24%, decrease in Consumer Mortgage Guide revenues. This decrease was a result
of increasing interest rates which slowed the refinance markets and caused
certain advertisers not to publish their higher rates.

Cost of Revenue

     Online publishing costs increased 26% to $7,114,258 for the year ended
December 31, 2000, from $5,627,713 in the comparable period in 1999. This
$1,486,545 increase was due primarily to a $557,171 increase in revenue sharing
payments in Bankrate.com due to an increase in the number of distribution
partners. Additional costs of approximately $930,000 were incurred during the
year ended December 31, 2000 for GreenMagazine.com, ilife.com and
IntelligentTaxes.com which were launched in the fourth quarter of 1999.

                                       23
<PAGE>

     Print publishing and licensing costs of $1,982,885 decreased $404,344, or
17%, from $2,387,229 in 1999 due primarily to a $407,026, or 22%, decrease in
revenue sharing payments due to lower levels of revenue.

     Sales costs of $3,234,148 in 2000 increased $257,709, or 9%, over 1999 due
to a $236,723, or 33%, increase in commissions paid on higher levels of online
graphic advertising and hyperlink sales during the year.

     Marketing expenses of $3,873,796 for the year ended December 31, 2000 were
$12,585,317, or 76%, lower than the comparable quarter in 1999.  These
reductions are in line with the Company's strategic initiatives to control costs
and curtail certain expenditures.

     General and administrative expenses of $7,165,157 for the year ended
December 31, 2000 were $1,005,791, or 16%, higher than the comparable period in
1999 due primarily to higher human resource costs, facilities costs, and legal
professional fees and services supporting the growth in the business.

Restructuring and Impairment Charges

     In June 2000, the Company recorded a restructuring charge of $1,298,000 as
a result of implementing certain strategic reorganization initiatives.
Approximately $364,000 of this charge pertains 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.

     During 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  and facility closing costs. The remaining $476,000 is a result of
the GreenMagazine.com goodwill write-off discussed below.

     On August 27, 1999, the Company acquired certain assets and assumed certain
liabilities of Green Magazine, Inc. ("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, the Company
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.

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

     During the years ended December 31, 2000 and 1999, CPNet.com, Consejero.com
and GreenMagazine.com had total revenue and total expenses as follows:
CPNet.com- $18,162 and $385,973 in 2000 and $49,513 and $577,278 in 1999;
Consejero.com- $16,359 and $810,867 in 2000 and $8,036 and $2,217,879 in 1999;
GreenMagazine.com- $103,817 and $1,774,188 in 2000 and $1,572 and $263,169 in
1999.

     Depreciation and amortization of $873,484 for the year ended December 31,
2000 was $451,692, or 107%, higher compared to 1999 due to purchases of software
and computer equipment. Goodwill amortization of $220,780 is a result of the
Green Magazine.com acquisition in the third quarter of 1999.

     Noncash stock based compensation expense of $1,311,912 was recorded during
the year ended December 31, 2000 compared to $3,305,104 in the same period in
1999. In March 2000, the Company recorded $860,000 of noncash charges upon the
resignation of the Company's former president and chief executive officer
related to the continued vesting of stock options under the terms of an
employment agreement. The remaining expense relates to stock options granted
under the 1997 and 1999 Equity Compensation Plans at less than fair market value
on the date of grant.  In 1999, the Company recorded approximately $2,113,000 of
noncash charges when a note receivable for a restricted stock grant to the
former president and chief executive officer was forgiven, the unvested shares
under the grant (264,932) were reacquired by the Company, the associated put
right was cancelled and 189,238 shares of redeemable common stock were
reclassified to common stock and vested immediately. Approximately $1,120,000
was recorded for options granted under the 1997 Equity Compensation Plan in
March 1999.

     The Company recorded a noncash financing charge of $2,656,000 in March 1999
compared to none in 2000. In March 1999, one of the Company's Series B
convertible preferred stockholders loaned the Company $1,000,000, at 8% interest
due April 9, 1999.  On April 9, 1999, the principal amount of the loan plus
accrued interest was converted, pursuant to its terms, into 6,784 shares of
Series B convertible preferred stock and, accordingly, the finance charge was
recorded.

                                       24
<PAGE>

     Interest income of $727,327 during the year ended December 31, 2000 was
$359,821, or 33%, lower than the comparable amount in 1999 due to declining cash
balances. Interest expense was up $264,364 over the comparable period in 1999
due to the 10% convertible subordinated note payable issued in connection with
the Pivot acquisition in August 1999. Interest income in 2001 is projected to
decrease due to lower average cash balances.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Revenue

      Total revenue for the year ended December 31, 1999 of $11,969,685
increased $6,348,156, or 113%, over the comparable period in 1998. Online
publishing revenue increased $5,914,461, or 229%, to $8,496,905 and represented
71% of total revenue compared to 46% in 1998. These increases were due to higher
levels of advertising sales and higher advertising rates facilitated by an
increase in advertising inventory resulting from an increase in the number of
distribution partners and higher overall site traffic. Additionally, in July
1999, the Company launched a multi-media integrated communications program to
establish brand awareness and build site traffic. This program included a print
advertising campaign with insertions in news, business, computer and personal
finance publications; an online banner and sponsorship program; a comprehensive
public relations program; and various media delivery systems including
television. Beginning in January 2000, the Company substantially reduced its
levels of spending on marketing compared to the second half of 1999,which could
have the effect of substantially slowing down our revenue growth.

      Print publishing and licensing revenue increased $433,695, or 14%, to
$3,472,780 due primarily to a  $618,713, or 48%, increase in Consumer Mortgage
Guide revenues. This increase was a result of an increased sales effort, higher
rates charged per unit sale and an increase in the number of advertisers.

Cost of Revenue

      Online publishing costs increased 156% to $5,627,713 for the year ended
December 31, 1999 from $2,202,279 in the comparable period in 1998. This
$3,425,434 increase was due to higher advertising costs, expenses incurred in
promoting and staffing theWhiz.com, GreenMagazine.com and Consejero.com,
increases in revenue sharing obligations and higher personnel costs.
Additionally, higher personnel costs were incurred to support the growth in
hyperlinked advertisers and the addition of quality control personnel to support
overall growth.

      Print publishing and licensing costs increased 13% to $2,387,229 during
the year ended December 31, 1999 from $2,104,960 in 1998, due primarily to
higher revenue sharing payments to newspapers based on higher levels of revenue.

      Sales costs for the year ended December 31, 1999 were $1,570,741, or 112%,
higher than 1998 due to higher human resource costs as a result of a doubling of
the sales force staff, lead generators and telemarketers, and the opening of the
Northern California and Chicago sales offices.

      Marketing expenses of $16,459,113 for the year ended December 31, 1999
were $16,026,686 higher than in 1998 primarily due to online advertising monies
spent for bankrate.com, theWhiz.com, Consejero.com and GreenMagazine.com with
the goal of driving more online traffic to our web sites. In July 1999, the
Company launched a multi-media integrated communications program to establish
brand awareness and build site traffic. This program included a print
advertising campaign with insertions in news, business, computer and personal
finance publications; an online banner and sponsorship program; a comprehensive
public relations program; and various media delivery systems including
television. Beginning in January 2000, the Company substantially reduced its
levels of spending on marketing compared to the second half of 1999, which could
have the effect of substantially slowing down our revenue growth.

      Product development costs increased $1,101,209, or 120%, for the year
ended December 31, 1999 compared to 1998 due to higher personnel and consulting
expenses to supporting the growth in revenue and Web sites launched in 1999.

      General and administrative expenses of $6,159,366 for the year ended
December 31, 1999 were $4,319,772, or 235%, higher than the comparable period in
1998 due primarily to higher human resource costs, facilities and professional
services expenses supporting the growth in the business.

                                       25
<PAGE>

      Depreciation and amortization of $421,792 for the year ended December 31,
1999 was $281,723, or 201%, higher compared to 1998 due to purchases of
software, computer equipment and components. Goodwill amortization of $98,124
was a result of the Green acquisition. Goodwill of $883,117 was recorded  and
was being amortized over a three-year period.

      Noncash stock based compensation expense of $3,305,104 was recorded in the
year ended December 31, 1999 compared to $757,563 in the same period in 1998. In
1999 and 1998, approximately $2,113,000 and $460,000, respectively, was recorded
as a result of a variable stock option arrangement with our former President and
Chief Executive Officer. The variable stock option arrangement was terminated in
March 1999.  Approximately $1,120,000 was recorded for options granted under the
1997 and 1999 Equity Compensation Plans during the first quarter of 1999 below
fair market value on the date of grant. In 1998, compensation expense was
recorded in connection with certain restricted stock grants.

      A noncash financing charge of $2,656,000 was recorded in March 1999
compared to none in 1998. In March 1999 one of the Series B convertible
preferred stockholders loaned us $1,000,000, at 8% interest due April 9, 1999.
If unpaid on April 9, 1999 the loan, plus accrued interest, converted to 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 and,
accordingly, the finance charge was recorded.

      Interest income of $1,087,148 for the year ended December 31, 1999 was up
from $36,006 in the comparable 1998 period due to investing the proceeds from
our initial public offering in short-term, interest bearing instruments.
Interest expense was up $213,855 over the comparable period in 1998 due to the
increase in debt associated with equipment under capital leases and the 10%
convertible subordinated note payable issued in connection with the Pivot
acquisition.

Year Ended June 30, 1998 Compared to Year Ended June 30, 1997

Revenue

     Total revenue increased to $3,840,577 in fiscal 1998 from $2,542,556 in
fiscal 1997, representing a 51% increase.

     Online publishing revenue increased to $1,281,284 in fiscal 1998 from
$484,511 in fiscal 1997, representing a 164% increase. This increase was due to
more advertisements being sold, higher advertising rates and an increase in
inventory available for sale. A change of site design for bankrate.com to allow
for a larger number of advertisements per page also contributed to the revenue
growth.

     Print publishing and licensing revenue increased to $2,559,293 in fiscal
1998 from $2,058,045 in fiscal 1997, representing a 24% increase. The increase
resulted from the sale of a higher number of advertisements for Consumer
Mortgage Guide, which resulted primarily from growth in the number of
participating newspapers.

Cost of Revenue

     Online publishing costs increased to $1,339,540 in fiscal 1998 from
$1,003,128 in fiscal 1997, representing a 34% increase. The increase resulted
from higher payments made under distribution arrangements and additional
editorial staff.

     Print publishing and licensing costs increased to $1,961,714 in fiscal 1998
from $1,185,969 in fiscal 1997, representing a 65% increase. The increase was
substantially a result of higher payments to newspapers given the higher level
of Consumer Mortgage Guide revenues.

     Sales costs increased to $705,595 in fiscal 1998 from $130,436 in fiscal
1997, representing a 441% increase. The increase was due to additional sales
staff, higher commissions resulting from increased revenues and higher
commission rates for our online sales staff.

     Marketing costs increased to $145,632 in fiscal 1998 from $1,485 in fiscal
1997. The increase was due to the hiring of a public relations firm to promote
our expanded online activities and the costs of creating and producing sales-
materials for online advertising. Additional costs were incurred in fiscal 1998
when we purchased such advertising to test its effectiveness in increasing
visitors to Bankrate.com.

                                       26
<PAGE>

     Product development costs increased to $697,767 in fiscal 1998 from
$259,191 in fiscal 1997, representing a 169% increase. The increase was
principally related to higher personnel costs, consulting expenses and equipment
and software costs to support the Company's growth initiatives.

     General and administrative costs increased to $1,663,728 in fiscal 1998
from $767,957 in fiscal 1997, representing a 117% increase. The increase was
principally related to the hiring of new senior management positions, expansion
of office space and additional professional fees.

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, 2000. The information has been derived from our unaudited consolidated
financial statements. In the opinion of our management, the unaudited financial
statements have been prepared on a basis consistent with the 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, 2000            Year Ended December 31, 1999
                                                    March 31      June 30    September 30  December 31       March 31     June 30
                                                    --------      -------    ------------  -----------       --------     -------
<S>                                                <C>          <C>          <C>           <C>              <C>          <C>
Revenue:
     Online publishing                             $     3,014  $     3,046  $     3,012   $     3,210      $    1,370   $    1,926
     Print publishing and licensing                        742          750          712           719             856          886
                                                   -----------  -----------  -----------   -----------      ----------   ----------
                 Total revenue                           3,756        3,796        3,724         3,929           2,226        2,812
                                                   -----------  -----------  -----------   -----------      ----------   ----------
Cost of revenue:
     Online publishing                                   2,407        2,001        1,697         1,008             845        1,175
     Print publishing and licensing                        535          551          455           443             583          608
                                                   -----------  -----------  -----------   -----------      ----------   ----------
                 Total cost of revenue                   2,942        2,552        2,152         1,451           1,428        1,783
                                                   -----------  -----------  -----------   -----------      ----------   ----------
Gross margin                                               814        1,244        1,572         2,478             798        1,029
                                                   -----------  -----------  -----------   -----------      ----------   ----------
Operating expenses:
     Sales                                                 906          781          796           751             530          792
     Marketing                                           1,825        1,175          263           610             714        1,987
     Product development                                   577          559          429           375             377          409
     General and administrative expenses                 1,941        1,642        2,416         1,166             576        1,161
     Restructuring and impairment charges                    -        1,298          843           144               -            -
     Depreciation and amortization                         223          232          223           195              68          105
     Goodwill amortization                                  74           74           74            10               3            -
     Noncash stock based compensation                      918           97          130           167           1,908          711
                                                   -----------  -----------  -----------   -----------      ----------   ----------
                                                         6,464        5,858        5,174         3,418           4,176        5,165
                                                   -----------  -----------  -----------   -----------      ----------   ----------
                 Loss from operations                   (5,650)      (4,614)      (3,602)         (940)         (3,378)      (4,136)
Other income (expense), net                                124           46           39            21               7          212
Noncash financing charge                                     -            -            -             -          (2,656)           -
                                                   -----------  -----------  -----------   -----------      ----------   ----------
     Loss before income taxes and
       discontinued operations                          (5,526)      (4,568)      (3,563)         (919)         (6,027)      (3,924)
Income taxes from continuing operations                      -            -            -             -               -            -
                                                   -----------  -----------  -----------   -----------      ----------   ----------
     Loss before discontinued operations                (5,526)      (4,568)      (3,563)         (919)         (6,027)      (3,924)
                                                   -----------  -----------  -----------   -----------      ----------   ----------
Discontinued operations:                                                                             -               -            -
     Loss from discontinued operations                  (1,587)      (1,380)        (248)            -               -            -
     Gain on disposal of discontinued operations             -            -          871             -               -            -
                                                   -----------  -----------  -----------   -----------      ----------   ----------
                                                        (1,587)      (1,380)         623             -               -            -
                                                   -----------  -----------  -----------   -----------      ----------   ----------
     Net loss                                           (7,113)      (5,948)      (2,940)         (919)         (6,027)      (3,924)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value               -            -            -             -          (1,852)        (429)
Charge for conversion of nonredeemable convertible
  Series A preferred stock to redeemable                     -            -            -             -               -            -
                                                   -----------  -----------  -----------   -----------      ----------   ----------
     Net loss applicable to common stock           $    (7,113) $    (5,948) $    (2,940)  $      (919)     $   (7,879)  $   (4,353)
                                                   ===========  ===========  ===========   ===========      ==========   ==========
Basic and diluted net loss per share:
     Loss before discontinued operations           $     (0.41) $     (0.33) $     (0.25)  $     (0.07)     $    (1.47)  $    (0.43)
     Discontinued operations                             (0.12)       (0.10)        0.04             -               -            -
                                                   -----------  -----------  -----------   -----------      ----------   ----------

     Net loss                                            (0.53)       (0.43)       (0.21)        (0.07)          (1.47)       (0.43)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value               -            -            -             -           (0.45)       (0.04)
Charge for conversion of nonredeemable convertible
  Series A preferred stock to redeemable                     -            -            -             -               -            -
                                                   -----------  -----------  -----------   -----------      ----------   ----------
     Net loss applicable to common stock           $     (0.53) $     (0.43) $     (0.21)  $     (0.07)     $    (1.92)  $    (0.47)
                                                   ===========  ===========  ===========   ===========      ==========   ==========
Weighted average shares outstanding used in
  basic and diluted per-share calculation           13,543,678   13,960,937   13,987,077    13,996,950       4,099,458    9,195,503
                                                   ===========  ===========  ===========   ===========      ==========   ==========
<CAPTION>
(In thousands, except share and per share data)    Year Ended December 31, 1999             Year Ended December 31, 1998
                                                    September 30 December 31      March 31     June 30    September 30  December 31
                                                    ------------ -----------      --------     -------    ------------  -----------
<S>                                                <C>           <C>               <C>          <C>         <C>          <C>
Revenue:
     Online publishing                             $     2,417   $     2,784       $      328   $      446  $     817    $      992
     Print publishing and licensing                        880           850              621          757        766           894
                                                   -----------   -----------      -----------   ----------  ---------    ----------
                 Total revenue                           3,297         3,634              949        1,203      1,583         1,886
                                                   -----------   -----------      -----------   ----------  ---------    ----------
Cost of revenue:
     Online publishing                                   1,457         2,151              318          461        651           773
     Print publishing and licensing                        585           611              536          468        495           606
                                                   -----------   -----------      -----------   ----------  ---------    ----------
                 Total cost of revenue                   2,042         2,762              854          929      1,146         1,379
                                                   -----------   -----------      -----------   ----------  ---------    ----------
Gross margin                                             1,255           872               95          274        437           507
                                                   -----------   -----------      -----------   ----------  ---------    ----------
Operating expenses:
     Sales                                                 791           862              147          419        452           385
     Marketing                                           6,121         7,638               47           80         49           256
     Product development                                   545           686              168          297        232           219
     General and administrative expenses                 1,620         2,801              422          546        426           445
     Restructuring and impairment charges                    -             -                -            -          -             -
     Depreciation and amortization                         160            85               22           21         43            56
     Goodwill amortization                                  25           161                -            -          -             -
     Noncash stock based compensation                      351           335                -           89        408           260
                                                   -----------   -----------      -----------   ----------  ---------    ----------
                                                         9,613        12,568              806        1,452      1,610         1,621
                                                   -----------   -----------      -----------   ----------  ---------    ----------
                 Loss from operations                   (8,358)      (11,696)            (711)      (1,178)    (1,173)       (1,114)
Other income (expense), net                                400           252                8            3          5           187
Noncash financing charge                                     -             -                -            -          -             -
                                                   -----------   -----------      -----------   ----------  ---------    ----------
     Loss before income taxes and
       discontinued operations                          (7,958)      (11,444)            (703)      (1,175)    (1,168)         (927)
Income taxes from continuing operations                      -             -                -            -          -             -
                                                   -----------   -----------      -----------   ----------  ---------    ----------
     Loss before discontinued operations                (7,958)      (11,444)            (703)      (1,175)    (1,168)         (927)
                                                   -----------   -----------      -----------   ----------  ---------    ----------
Discontinued operations:
     Loss from discontinued operations                    (542)       (1,593)               -            -          -             -
     Gain on disposal of discontinued operations             -             -                -            -          -             -
                                                   -----------   -----------      -----------   ----------  ---------    ----------
                                                          (542)       (1,593)               -            -          -             -
                                                   -----------   -----------      -----------   ----------  ---------    ----------
     Net loss                                           (8,500)      (13,037)            (703)      (1,175)    (1,168)         (927)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value               -             -                -            -          -             -
Charge for conversion of nonredeemable convertible
  Series A preferred stock to redeemable                     -             -                -            -          -        (4,438)
                                                   -----------   -----------      -----------   ----------  ---------    ----------
     Net loss applicable to common stock           $    (8,500)  $   (13,037)      $     (703)  $   (1,175) $  (1,168)   $   (5,365)
                                                   ===========   ===========      ===========   ==========  =========    ==========
Basic and diluted net loss per share:
     Loss before discontinued operations           $     (0.59)  $     (0.85)      $    (0.18)  $    (0.31) $   (0.30)   $    (0.23)
     Discontinued operations                             (0.04)        (0.11)               -            -          -             -
                                                   -----------   -----------      -----------   ----------  ---------    ----------
     Net loss                                            (0.63)        (0.98)           (0.18)       (0.31)     (0.30)        (0.23)
Accretion of Convertible Series A and
  Series B preferred stock to redemption value               -             -                -            -          -             -
Charge for conversion of nonredeemable convertible
  Series A preferred stock to redeemable                     -             -                -            -          -         (1.09)
                                                   -----------   -----------      -----------   ----------  ---------    ----------
     Net loss applicable to common stock           $     (0.63)  $     (0.96)      $    (0.18)  $    (0.31) $   (0.30)   $    (1.32)
                                                   ===========   ===========      ===========   ==========  =========    ==========
Weighted average shares outstanding used in
  basic and diluted per-share calculation           13,477,945    13,540,988        3,846,200    3,846,200  3,954,200     4,053,200
                                                   ===========   ===========      ===========   ==========  =========    ==========
</TABLE>


Liquidity and Capital Resources

     Bankrate, Inc. has been funded using the capital raised from shareholders,
and most recently, from the proceeds of our initial public offering in May,
1999. As of December 31, 2000, we had working capital of $7,056,737. Cash used
in continuing operating activities was $12,714,997, $16,102,619, $1,207,153 and
$2,760,717 for the years ended December 31, 2000 and 1999, the six months ended
December 31, 1998 and the year ended June 30, 1998, respectively, and was
primarily for funding operating losses due to the continued expansion of our
online publishing efforts through personnel acquisitions and marketing
expenditures. These expenditures were significantly curtailed during the year
ended December 31, 2000.

     Cash used in discontinued operations of $5,394,547 and $2,895,388 for the
years ended December 31, 2000 and 1999, respectively, represents the net cash
funding for our former subsidiary, Professional Direct Agency, Inc. ("Pivot")
which was disposed of in July 2000.

     Cash provided by investing activities of $3,679,784 for the year ended
December 31, 2000 was primarily the result of the cash proceeds from the sale of
Pivot of $4,350,000 net of 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 provided from financing activities in 2000 consisted of the cash
proceeds from the sale of stock to our Chairman of the Board of Directors of
$997,841 and the exercise of common stock options of $50,598. Principal payments
on capital lease obligations were $219,824. Net cash provided from 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 the IPO, as well as the net cash proceeds from our initial
public offering of $41,300,631. Other financing activities included cash used
for payments on capital lease liabilities. During the six months ended December
31, 1998 and the years ended June 30, 1998 and 1997, cash flows from financing
activities consisted primarily of the cash proceeds from the issuance of
preferred stock and loans from stockholders.

     In connection with the acquisition of Pivot in August, 1999 the Company
signed a $4,350,000 five-year convertible subordinated note payable to Pivot's
former owner. The note bears interest at 10% and is due in one payment on
August 20, 2004. Interest is due beginning August 20, 2002 and thereafter every
six months until conversion or payment in full. The note is convertible at any
time by the holder into 625,000 shares of our common stock.

                                       27
<PAGE>

     The Company has incurred net losses in each of its last five fiscal years.
We had an accumulated deficit of approximately $59 million as of December 31,
2000. We anticipate that we will incur operating losses and negative cash flows
in the foreseeable future.

     The Company is working to manage its cash by actively controlling expenses
and pursuing additional sources of revenue. For instance, the Company
substantially reduced marketing expenditures beginning in January 2000 compared
to the second half of 1999, and has followed through with plans to sell or
curtail development of certain 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. These divestitures yielded cash to the Company of
approximately $4,392,000 and will result in lower operating expenses. In June
2000, the Company reduced employment levels of continuing operations by
approximately 10% and began efforts to consolidate its physical locations. Based
on these actions and the Company's current plan, the Company believes its
existing liquidity and capital resources will be sufficient to satisfy its cash
requirements into 2002. There are no assurances that such actions will ensure
cash sufficiency through 2002 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 to the consolidated
financial statements included in Item 8. herein, which the Company intends to
vigorously defend, management could be required to spend significant amounts of
time and resources defending these matters which may impact the operations of
the Company.

Income Taxes

     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, 2000, we had approximately $44,290,000 of
net operating loss carryforwards for tax reporting purposes available to offset
future taxable income. The Company's net operating loss carryforwards expire
from 2012 through 2020. 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.

Recent Accounting Pronouncements

     In September 1998, the FASB issued Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This Statement was amended in
September 2000 by Statement No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities." Statement No. 138 is effective for
the Company beginning January 2001. The new Statement requires all derivatives
to be recorded on the balance sheet at fair value and establishes accounting
treatment for three types of hedges: hedges of changes in the fair value of
assets, liabilities or firm commitments: hedges of the variable cash flows of
forecasted transactions; and hedges of foreign currency exposures of net
investments in foreign operations. To date, the Company has not invested in
derivative instruments nor participated in hedging activities and, therefore,
does not anticipate there will be a material impact on the result of operations
or financial position from Statements No. 133 or No. 138.

     In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB 101") and amended it in March and June 2000. We adopted the provisions of
SAB 101 in the fourth quarter of 2000 which did not impact our consolidated
financial statements.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

                                       28
<PAGE>

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, 2000, 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
                                                                      PAGE

Report of Independent Auditors.....................................

Consolidated Balance Sheets as of December 31, 2000 and
1999...............................................................

Consolidated Statements of Operations for the Years Ended
 December 31, 2000 and 1999, the Six Months Ended December 31,
 1998, and the  Year Ended June 30, 1998...........................

Consolidated Statements of Redeemable Stock and Stockholders'
 Equity  (Deficit) for the Years Ended December 31, 2000 and 1999,
 the Six Months Ended December 31, 1998, and the Year Ended
 June 30, 1998.....................................................

Consolidated Statements of Cash Flows for the Years Ended
 December 31, 2000 and 1999, the Six Months Ended December 31,
 1998, and the  Year Ended June 30, 1998...........................

Notes to Consolidated Financial Statements.........................

                                       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, 2000 and 1999, and
the related consolidated statements of operations, redeemable stock and
stockholders' equity (deficit) and cash flows for the years ended December 31,
2000 and 1999, the six months ended December 31, 1998, and the year ended June
30, 1998. 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, 2000 and 1999 , and the results of their
operations and their cash flows for the years ended December 31, 2000 and 1999,
the six months ended December 31, 1998, and the year ended June 30, 1998 in
conformity with accounting principles generally accepted in the United States of
America.

/s/ KPMG LLP

Atlanta, Georgia
January 26, 2001

                                       31
<PAGE>

                         Bankrate, Inc. and Subsidiary
                          Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                     December 31,     December 31,
                                                                                         2000             1999
                                                                                         ----             ----
<S>                                                                                    <C>              <C>
          Assets

Cash and cash equivalents                                                              $  8,890,649     $ 22,491,794
Accounts receivable, net of allowance for doubtful accounts
  of $300,000 and $235,000 at December 31, 2000 and 1999, respectively                    1,218,867        1,449,765
Net assets of discontinued operations held for sale                                               -        3,880,595
Other current assets                                                                        572,185          383,292
                                                                                       ------------     ------------
          Total current assets                                                           10,681,701       28,205,446

Furniture, fixtures and equipment, net                                                    1,730,455        2,021,126
Intangible assets, net                                                                       88,425          951,290
Other assets                                                                                133,809        1,421,714
                                                                                       ------------     ------------
          Total assets                                                                 $ 12,634,390     $ 32,599,576
                                                                                       ============     ============
          Liabilities and Stockholders' Equity

Liabilities:
  Accounts payable                                                                     $    772,181     $  2,340,832
  Other accrued expenses                                                                  2,016,236        5,886,919
  Deferred revenue                                                                          463,224          656,058
  Current portion of obligations under capital leases                                       214,651          221,151
  Other current liabilities                                                                 158,672          127,860
                                                                                       ------------     ------------
          Total current liabilities                                                       3,624,964        9,232,820

10% Convertible subordinated note payable                                                 4,350,000        4,350,000
Accrued stock compensation expense                                                        2,452,424        1,159,309
Accrued interest                                                                            592,863          157,863
Other liabilities                                                                            40,815          254,139
                                                                                       ------------     ------------
          Total liabilities                                                              11,061,066       15,154,131
                                                                                       ------------     ------------
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 and 13,540,988 shares issued and outstanding at December 31,
   2000 and 1999, respectively                                                              139,969          135,410
  Additional paid in capital                                                             60,586,991       59,543,111
  Accumulated deficit                                                                   (59,153,636)     (42,233,076)
                                                                                       ------------     ------------
          Total stockholders' equity                                                      1,573,324       17,445,445
                                                                                       ------------     ------------
          Total liabilities and stockholders' equity                                   $ 12,634,390     $ 32,599,576
                                                                                       ------------     ------------
</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>

                         Bankrate, Inc. and Subsidiary
                     Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                   Year Ended
                                                                  December 31,          Six Months Ended     Year Ended
                                                             2000             1999      December 31, 1998   June 30, 1998
                                                             ----             ----      -----------------   -------------
    <S>                                                <C>               <C>            <C>                 <C>
    Revenue:
        Online publishing                              $  12,282,795     $   8,496,905     $  1,808,877     $  1,281,284
        Print publishing and licensing                     2,921,970         3,472,780        1,660,314        2,559,293
                                                       -------------     -------------     ------------     ------------
                    Total revenue                         15,204,765        11,969,685        3,469,191        3,840,577
                                                       -------------     -------------     ------------     ------------
    Cost of revenue:
        Online publishing                                  7,114,258         5,627,713        1,424,255        1,339,540
        Print publishing and licensing                     1,982,885         2,387,229        1,100,693        1,961,714
                                                       -------------     -------------     ------------     ------------
                    Total cost of revenue                  9,097,143         8,014,942        2,524,948        3,301,254
                                                       -------------     -------------     ------------     ------------
    Gross margin                                           6,107,622         3,954,743          944,243          539,323
                                                       -------------     -------------     ------------     ------------

    Operating expenses:
        Sales                                              3,234,148         2,976,439          837,697          705,595
        Marketing                                          3,873,796        16,459,113          304,919          145,632
        Product development                                1,940,143         2,016,689          450,376          697,767
        General and administrative expenses                7,165,157         6,159,366          871,057        1,663,728
        Restructuring and impairment charges               2,285,422                 -                -                -
        Depreciation and amortization                        873,484           421,792           98,491           66,666
        Goodwill amortization                                231,214           186,229                -                -
        Noncash stock based compensation(1)                1,311,912         3,305,104          669,000           88,563
                                                       -------------     -------------     ------------     ------------
                                                          20,915,276        31,524,732        3,231,540        3,367,951
                                                       -------------     -------------     ------------     ------------
                    Loss from operations                 (14,807,654)      (27,569,989)      (2,287,297)      (2,828,628)
                                                       -------------     -------------     ------------     ------------
    Other income (expense):
        Interest income                                      727,327         1,087,148           18,924           52,351
        Interest expense                                    (496,868)         (232,504)         (12,433)          (6,216)
        Noncash financing charge                                   -        (2,656,000)               -                -
        Other                                                      -            18,712          185,588                -
                                                       -------------     -------------     ------------     ------------
                    Other income (expense), net              230,459        (1,782,644)         192,079           46,135
                                                       -------------     -------------     ------------     ------------
        Loss before income taxes and
          discontinued operations                        (14,577,195)      (29,352,633)      (2,095,218)      (2,782,493)
    Income taxes from continuing operations                        -                 -                -                -
                                                       -------------     -------------     ------------     ------------
        Loss before discontinued operations              (14,577,195)      (29,352,633)      (2,095,218)      (2,782,493)
                                                       -------------     -------------     ------------     ------------
    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                                         (16,920,560)      (31,488,330)      (2,095,218)      (2,782,493)
    Accretion of Convertible Series A and
      Series B preferred stock to redemption value                 -        (2,281,000)               -                -
    Charge for conversion of nonredeemable convertible
      Series A preferred stock to redeemable                       -                 -       (4,438,141)               -
                                                       -------------     -------------     ------------     ------------
        Net loss applicable to common stock            $ (16,920,560)    $ (33,769,330)    $ (6,533,359)    $ (2,782,493)
                                                       =============     =============     ============     ============
    Basic and diluted net loss per share:
        Loss before discontinued operations            $       (1.05)    $       (2.90)    $      (0.52)    $      (0.72)
        Discontinued operations                                (0.17)            (0.21)               -                -
                                                       -------------     -------------     ------------     ------------
        Net loss                                               (1.22)            (3.11)           (0.52)           (0.72)
    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            $       (1.22)    $       (3.34)    $      (1.63)    $      (0.72)
                                                       =============     =============     ============     ============
    Weighted average shares outstanding used in
      basic and diluted per-share calculation             13,872,788        10,113,928        4,018,700        3,846,200
                                                       =============     =============     ============     ============
</TABLE>

(1) Noncash stock compensation expense would be allocated as follows:

<TABLE>
<CAPTION>
                                    Year Ended
                                   December 31,         Six Months Ended    Year Ended
                                 2000          1999     December 31, 1998   June 30, 1998
                              ----------  -----------   -----------------   -------------
<S>                           <C>         <C>           <C>                  <C>
Other expenses:
  Sales                       $        -  $    40,792   $              -     $          -
  Product development              9,790        8,158                  -                -
  General and administrative   1,302,122    3,256,154            669,000           88,563
                              ----------  -----------   ----------------     ------------
                              $1,311,912  $ 3,305,104   $        669,000     $     88,563
                              ==========  ===========   ================     ============
</TABLE>


    See accompanying notes to consolidated financial statements.

                                       33
<PAGE>

                         Bankrate, Inc. and Subsidiary
Consolidated Statements of Redeemable Stock and Stockholders' Equity (Deficit)

<TABLE>
<CAPTION>
                                                                    Redeemable                      Redeemable
                                                               Convertible Series A            Convertible Series B
                                                                 Preferred Stock                   Preferred Stock
                                                               Shares       Amount             Shares          Amount
                                                               ------       ------             ------          ------
<S>                                                            <C>         <C>                 <C>          <C>
Balances, June 30, 1997                                           --      $       --              --        $       --

  Preferred stock issued, net of issuance costs                   --              --              --                --

  Stockholder loans converted to preferred stock                  --              --              --                --

  Redeemable commons stock issued                                 --              --              --                --

  Compensation expense relating to common stock vesting           --              --              --                --

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

Balances, June 30, 1998                                           --              --              --                --

  Common stock issued                                             --              --              --                --

  Compensation expense related to common stock grants             --              --              --                --

  Preferred stock issued, net of issuance costs                   --              --            17,575         1,982,535

  Conversion of nonredeemable convertible Series A
    preferred stock to redeemable                               89,612      10,215,768            --                --

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

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                                       --      $       --              --        $       --
                                                               =======    ============         =======      ============

<CAPTION>
                                                                       Redeemable Common Stock              Convertible Series A
                                                                                             Note              Preferred Stock
                                                                Shares         Amount      Receivable       Shares         Amount
                                                                ------         ------      ----------       ------         ------
<S>                                                            <C>         <C>             <C>              <C>        <C>
Balances, June 30, 1997                                            --      $       --      $       --         53,846   $  3,462,108

  Preferred stock issued, net of issuance costs                    --              --              --         28,074      1,815,519

  Stockholder loans converted to preferred stock                   --              --              --          7,692        500,000

  Redeemable commons stock issued                               454,170         236,168        (236,168)        --             --

  Compensation expense relating to common stock vesting            --              --              --           --             --

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


Balances, June 30, 1998                                         454,170         236,168        (236,168)      89,612      5,777,627

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

  Compensation expense related to common stock grants              --              --              --           --             --

  Preferred stock issued, net of issuance costs                    --              --              --           --             --

Conversion of nonredeemable convertible Series A
    preferred stock to redeemable                                  --              --              --        (89,612)    (5,777,627)

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

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                                        --      $       --      $       --           --     $       --
                                                               ========    ============    ============     ========   ============

<CAPTION>
                                                                                                          Unamortized
                                                                                           Additional         Stock
                                                                   Common Stock            Paid in        Compensation
                                                                Shares        Amount        Capital          Expense
                                                                ------        ------        -------          -------
<S>                                                          <C>           <C>             <C>            <C>
Balances, June 30, 1997                                       3,846,200    $     38,462    $       --     $       --

  Preferred stock issued, net of issuance costs                    --              --              --             --

  Stockholder loans converted to preferred stock                   --              --              --             --

  Redeemable commons stock issued                                  --              --           354,253       (354,253)

  Compensation expense relating to common stock vesting            --              --              --           88,563

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

Balances, June 30, 1998                                       3,846,200          38,462         354,253       (265,690)

  Common stock issued                                           207,000           2,070         266,930       (269,000)

  Compensation expense related to common stock grants              --              --           415,000        254,000

  Preferred stock issued, net of issuance costs                    --              --              --             --

  Conversion of nonredeemable convertible Series A
    preferred stock to redeemable                                  --              --        (1,036,183)          --

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

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   $       --
                                                             ==========    ============    ============   ============

<CAPTION>
                                                                               Total
                                                                           Stockholders'
                                                            Accumulated        Equity
                                                              Deficit        (Deficit)
                                                              -------        ---------
<S>                                                        <C>             <C>
Balances, June 30, 1997                                    $ (2,465,077)   $  1,035,493

  Preferred stock issued, net of issuance costs                    --         1,815,519

  Stockholder loans converted to preferred stock                   --           500,000

  Redeemable commons stock issued                                  --              --

  Compensation expense relating to common stock vesting            --            88,563

  Net loss for the period                                    (2,782,493)     (2,782,493)
                                                           ------------    ------------

Balances, June 30, 1998                                      (5,247,570)        657,082

  Common stock issued                                              --              --

  Compensation expense related to common stock grants              --           669,000

  Preferred stock issued, net of issuance costs                    --              --

  Conversion of nonredeemable convertible Series A
    preferred stock to redeemable                            (3,401,958)    (10,215,768)

  Net loss for the period                                    (2,095,218)     (2,095,218)
                                                           ------------    ------------

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
                                                           ============    ============
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>



                         Bankrate, Inc. and Subsidiary
                     Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                  Year Ended
                                                                                 December 31,         Six Months Ended  Year Ended
                                                                              2000          1999     December 31, 1998 June 30, 1998
                                                                              ----          ----     ----------------- -------------
<S>                                                                      <C>            <C>             <C>           <C>
Cash flows from operating activities:
Continuing operations-
  Net loss                                                               $ (14,577,195) $ (29,352,633)  $ (2,095,218) $  (2,782,493)
                                                                         -------------  -------------   ------------  -------------
  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                                             1,104,698        608,021         98,491         66,666
   Loss on disposal of fixed assets                                            129,203              -              -              -
   Provision for doubtful accounts                                             364,991        210,153              -              -
   Noncash stock compensation                                                1,311,912      3,305,104        669,000         88,563
   Noncash financing charge                                                          -      2,656,000              -              -
   Changes in operating assets and liabilities:
     (Increase) decrease in accounts receivable                               (134,093)    (1,138,016)      (216,021)       (42,451)
     (Increase) decrease in other assets                                     1,177,967     (2,214,143)       (84,375)       (22,305)
     Increase (decrease) in accounts payable                                (1,568,651)     2,032,165        102,876       (168,214)
     Increase (decrease) in accrued expenses                                (3,692,868)     5,325,912        181,554        118,932
     Increase (decrease) in other current liabilities                          465,812        285,723              -              -
     Increase (decrease) in deferred revenue                                  (192,834)        43,398        136,540        (19,415)
                                                                         -------------- --------------  ------------- --------------
       Total adjustments                                                     1,862,198     13,250,014        888,065         21,776
                                                                         -------------- --------------  ------------- --------------
       Net cash used in continuing operations                              (12,714,997)   (16,102,619)    (1,207,153)    (2,760,717)
       Net cash used in discontinued operations                             (5,394,547)    (2,895,388)             -              -
                                                                         -------------- --------------  ------------- --------------
            Net cash used in operating activities                          (18,109,544)   (18,998,007)    (1,207,153)    (2,760,717)
                                                                         -------------- --------------  ------------- --------------
Cash flows used in investing activities:
 Purchases of equipment                                                       (712,016)    (1,691,469)       (26,875)      (407,203)
 Proceeds from sale of discontinued operations                               4,391,800              -              -              -
 Acquisitions, net of cash acquired                                                  -       (536,983)             -              -
                                                                         -------------- --------------  ------------- --------------
       Net cash provided by (used in) investing activities                   3,679,784     (2,228,452)       (26,875)      (407,203)
                                                                         -------------- --------------  ------------- --------------
Cash flows from financing activities:
 Loans from stockholders                                                             -      1,000,000              -        500,000
 Principal payments on capital lease obligations                              (219,824)      (215,478)       (25,834)             -
 Proceeds from issuance of preferred stock                                           -              -      1,982,535      1,815,519
 Proceeds from exercise of stock options                                        50,598              -              -              -
 Proceeds from issuance of common stock, net                                   997,841     41,300,631              -              _
                                                                         -------------- --------------  ------------- --------------
       Net cash provided by financing activities                               828,615     42,085,153      1,956,701      2,315,519
                                                                         -------------- --------------  ------------- --------------
       Net increase (decrease) in cash and cash equivalents                (13,601,145)    20,858,694        722,673       (852,401)
Cash and equivalents, beginning of period                                   22,491,794      1,633,100        910,427      1,762,828
                                                                         -------------- --------------  ------------- --------------
Cash and equivalents, end of period                                     $    8,890,649  $  22,491,794   $  1,633,100  $     910,427
                                                                        =============== ==============  ============= ==============
 Supplemental disclosures of cash flow information:
  Cash paid during the period for interest                              $       61,868  $      87,504   $     12,433  $       6,216
                                                                        =============== ==============  ============= ==============
Supplemental schedule of noncash investing and finance activities:
 Equipment acquired under capital leases                                $            -  $     314,000   $    380,000  $      18,000
                                                                        =============== ==============  ============= ==============
 Stockholder loans contributed to capital for preferred stock           $            -  $           -   $          -  $     500,000
                                                                        =============== ==============  ============= ==============
 Conversion of nonredeemable convertible Series A preferred stock
   to redeemable and related charge                                     $            -  $           -   $ 14,653,909  $          -
                                                                        =============== ==============  ============= ==============
 Accretion of Series A and Series B preferred stock to redemption valve $            -  $   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.

<PAGE>

                         BANKRATE, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

     Bankrate, Inc. (the "Company") is an Internet consumer finance marketplace
which owns and operates a portfolio of Internet-based personal finance channels
including banking, investing, taxes and small business finance. The Company's
flagship  Web site, Bankrate.com, is an 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
also through national and state publications.  The Company's former wholly owned
subsidiary, Professional Direct Agency, Inc. ("Pivot"), is 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.

     The Company has incurred net losses in each of its last five fiscal years.
We had an accumulated deficit of approximately $59 million as of December 31,
2000. 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. We anticipate that we will incur operating losses and negative cash
flows in the foreseeable future.

     The Company is working to manage its cash by actively controlling expenses
and pursuing additional sources of revenue. For instance, the Company
substantially reduced marketing expenditures beginning in January 2000 compared
to the second half of 1999, and has followed through with plans to sell or
curtail development of certain 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 divestitures yielded cash to the
Company of approximately $4,392,000 and will result in lower operating expenses.
In June 2000, the Company reduced employment levels of continuing operations by
approximately 10% and began efforts to consolidate its physical locations. Based
on these actions and the Company's current plan, the Company believes its
existing liquidity and capital resources will be sufficient to satisfy its cash
requirements into 2002. There are no assurances that such actions will ensure
cash sufficiency through 2002 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 may impact the
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.

     Consolidation

     Prior to the quarter ended June 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 for all periods presented.

                                       36
<PAGE>

     Use of Estimates

     The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent gains and losses at the date of the 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 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 goodwill resulting from the
acquisitions of CPNet.com, Pivot and certain assets and liabilities of Green
Magazine, Inc. (see Notes 5 and 6), and trademarks. Goodwill was being amortized
on a straight-line basis over three to five years, the estimated benefit period.
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 No. 128, "Earnings per Share" ("FAS 128")
and Staff Accounting Bulletin No. 98 ("SAB 98"). Under FAS 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 in
2000 and 1999, and outstanding stock options, redeemable preferred stock and
convertible preferred stock for 1998, as the effect of their conversion to
common stock would be antidilutive.

     Common stock equivalents that could potentially dilute basic earnings per
share in the future were not included in diluted earnings per share because
their effect on periods presented was antidilutive total 2,091,066 at December
31, 2000. The antidilutive shares do not include the shares issuable on the
assumed conversion of the 10% convertible subordinated note payable.

     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 FASB
Interpretation 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, compensation is recorded
on the date of grant only if the current market price of the underlying stock
exceeded 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.

                                       37
<PAGE>

     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.

     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, poster and billboard advertisements.
Advertising sales are invoiced monthly based on the expected 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. Additionally,
the Company generates revenue on a "per action" basis (i.e., a purchase or
completion of an application) when a visitor to the Company's 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.
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 gross 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 also 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 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 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 barter revenue is recognized. If the advertising
impressions are received from the customer prior to the Company delivering the
advertising impressions, a liability is recorded. If the Company delivers
advertising impressions to the other companies' Web sites prior to receiving the
advertising impressions, a prepaid expense is recorded. At December 31, 2000,
the Company recorded a prepaid expense of approximately $200,000 for barter
advertising to be received. Barter revenue was approximately $757,000 and
represented approximately 5% of total revenue for the year ended December 31,
2000. No barter revenue was recorded in prior periods.

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.


                                       38
<PAGE>

     Marketing  Expenses

     Marketing includes advertising costs, which are charged to expense as
incurred. Advertising costs were $4,073,796, $16,459,305, $304,919 and $145,632
for the years ended December 31, 2000 and 1999, the six month period ended
December 31, 1998 and the year ended June 30, 1998, respectively.  Barter
expense of approximately $557,000 was recorded for the year ended December 31,
2000. No barter expense was recorded in prior periods.

     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 September 1998, the FASB issued Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This  Statement was amended in
September 2000 by Statement No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities." Statement No. 138 is effective for
the Company beginning January 2001. The new Statement  requires all derivatives
to be recorded on the balance sheet at fair value and establishes accounting
treatment for three types of hedges: hedges of changes in the fair value of
assets, liabilities or firm commitments: hedges of the variable cash flows of
forecasted transactions; and hedges of foreign currency exposures of net
investments in foreign operations. To date, the Company does not believe it has
invested in derivative instruments nor participated in hedging activities and,
therefore, does not believe there will be a material impact on the results of
operations or financial  position from Statements No. 133 or No. 138.

     In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB 101") and amended it in March and June 2000. We adopted the provisions of
SAB 101 in the fourth quarter of 2000 which did not impact our 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.

     Stock Splits

     In August 1997, the Company authorized and executed a 10-for-1 stock split.
Additionally, on April 9, 1999, the Company authorized and executed a 5-for-1
stock split, effected as a stock dividend, of each issued and outstanding share
of common stock. The information in the accompanying consolidated financial
statements has been retroactively restated to reflect the effects of these stock
splits and dividend.

                                       39
<PAGE>

     Authorized Shares

     In April 1999, the Company amended and restated its articles of
incorporation. As a result, the total number of shares which the Company is
authorized to issue is 100,120,000; 100,000,000 of these shares are common
stock, each having a par value of $.01; and 120,000 shares are preferred stock,
each having a par value of $.01, of which 90,000 shares are Series A Convertible
Preferred stock and 30,000 are Series B Convertible Preferred stock.

     Common Stock and Convertible Preferred Stock

     In June 1997, the Company and certain investors entered into a Series A
Preferred Stock Purchase Agreement ("the Agreement"). The Series A Preferred
Stock is voting, non-cumulative and preferred as to the first $4.55 per share
per year of funds legally available and declared by the Board of Directors, has
a liquidation preference above common stockholders of $65.00 per share, each
share is convertible into 50 shares of common stock at a conversion price of
$1.30, and has other rights and preferences. Pursuant to the Agreement,
investors acquired 30,770 shares of Series A Preferred Stock at $65.00 per
share. During 1997, Peter C. Morse("Morse") a director and majority stockholder,
exchanged 1,153,800 shares of common stock for 23,076 shares of Series A
preferred.

     In August and September 1997, 11,538 shares of Series A Preferred Stock
were issued at $65.00 per share, resulting in net proceeds to the Company of
$740,709.

     In October 1997, an additional 1,154 shares of Series A Preferred Stock
were issued at $65.00 per share, resulting in net proceeds to the Company of
$75,000. Investors agreed to acquire 23,074 shares of Series A Preferred Stock
at $65.00 per share, resulting in net proceeds to the Company of $1,499,810.
This purchase included the contribution of loans due to Morse in the amount of
$200,000 and the contribution of $300,000 in loans due to other investors for an
aggregate of 7,692 shares of Series A Preferred Stock.

     In November 1998, the Series A Preferred Stock was converted from non-
redeemable Preferred Stock to redeemable Preferred Stock. This transaction was
treated as an extinguishment and the new instrument was recorded at fair value
on the conversion date. The difference between the fair value on the conversion
date and the carrying value was charged to equity.

     In November 1998, the Company and certain investors entered into a Series B
Preferred Stock Purchase Agreement. Pursuant to this agreement, 17,575 shares of
Series B Preferred Stock were issued at $113.80 per share, resulting in net
proceeds to the Company of $1,982,535. The Series B Preferred Stock is voting,
non-cumulative and preferred as to the first $8.00 per share per year out of
funds legally available and declared by the Board of Directors, has liquidation
preferences over the Series A Preferred and common stockholders of $113.80 per
share, each share is convertible into 50 shares of common stock at a conversion
price of $2.28, and has other rights and preferences.

     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.

     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.


                                       40
<PAGE>

     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.

     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
provides for the issuance of restricted stock to the Grantee in accordance with
the 1997 Equity Compensation Plan (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 and $209,000 was recognized in
the year ended December 31, 1999 and the six month period ended December 31,
1998, respectively.

     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 (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 Emerging Issues Task Force 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 FASB Interpretation No. 28 was approximately
$2,113,000, $460,000 and $88,000 for the year ended December 31, 1999, the six
months ended December 31, 1998 and the year ended June 30, 1998, respectively,
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 noncompetition 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, 2000,
870,897 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.

                                       41
<PAGE>

     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, 2000, 161,250 of these
options remained outstanding due to options forfeited by terminated grantees for
which the Company is recognizing approximately $684,000 in compensation expense
over the remaining vesting period.

     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 2000.

     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, 2000,
2,038,037 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 noncash charge of approximately $860,000 recorded in 2000.

     During the year ended December 31, 2000, the Company granted stock options
to certain key executives and directors (See Note 10).

Accrued Stock Compensation Expense

     The Company accounts for stock-based compensation arrangements in
accordance with Accounting Principles Board ("APB) Opinion No. 25, "Accounting
for Stock Issued to Employees". Under APB No. 25, compensation expense for fixed
plan option accounting is recognized over the respective vesting period based on
the difference, if any, on the date the option is granted, between the fair
value of the Company's common stock and the option exercise price, and a
liability is established. This liability is reduced for terminations and
forfeitures as well as option exercises.

     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, and was between $0.40 and $1.30 for the six months
ended December 31, 1998, and was approximately $0.40 for the year ended June 30,
1998 on the date of grant using the Black Scholes option pricing model. The
following weighted average assumptions were used: expected volatility of 75% in
2000, 100% in 1999 and 0% for the six months ended December 31, 1998 and the
year ended June 30, 1998; expected dividend yield of 0% for all periods
presented; risk-free interest rates of 6% for the year ended December 31, 2000,
6.50% for the year ended December 31, 1999 and 5.50% for the six months ended
December 31, 1998 and the year ended June 30, 1998; 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>
                                                                                     Six Months       Year
                                                                                       Ended          Ended
                                                        Year Ended December 31,     December 31,    June 30,
                                                          2000           1999           1998          1998
                                                          ----           ----           ----          ----
    <S>                                               <C>            <C>             <C>           <C>
    Net loss applicable to common stock:
      As reported                                     $ (16,920,560) $ (33,769,330)  $ (6,533,359) $ (2,782,493)
      Pro forma                                         (17,856,418)   (36,969,194)    (6,548,359)   (2,792,493)
      Basic net loss per common share as reported             (1.22)         (3.34)         (1.63)        (0.72)
      Basic net loss per common share pro forma               (1.29)         (3.66)         (1.63)        (0.73)
</TABLE>

                                       42
<PAGE>

     Stock option activity during the years ended December 31, 2000 and 1999,
the six month period ended December 31, 1998, and the year ended June 30, 1998
is as follows:


<TABLE>
<CAPTION>
                                   Number of          Price Per        Weighted Average
                                     Shares             Share           Exercise Price
                                     ------             -----           --------------
<S>                                <C>              <C>                <C>
Balance, June 30, 1997                      -       $         -                $ -
  Granted                              89,530              1.30               1.30
  Exercised                                 -                 -                  -
  Forfeited                                 -                 -                  -
  Expired                                   -                 -                  -
                                     --------
Balance, June 30, 1998                 89,530              1.30               1.30
  Granted                             102,750              1.30               1.30
  Exercised                                 -                 -                  -
  Forfeited                                 -                 -                  -
  Expired                                   -                 -                  -
                                     --------
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                           1,510,504      1.00 to 5.375              2.90
  Exercised                           (24,463)             1.30               1.30
  Forfeited                        (1,283,333)     1.00 to 13.00              6.28
  Expired                                  -                 -                  -
                                    ---------
Balance, December 31, 2000          2,091,066      1.00 to 13.00            $ 4.03
                                    =========
</TABLE>

     Additional information with respect to outstanding options as of December
 31, 2000 is as follows:

<TABLE>
<CAPTION>
                               Options Outstanding                           Options Exercisable
                      -------------------------------------              ---------------------------
                                      Weighted Average                                      Average
                       Number              Remaining                        Number          Exercise
    Prices           of Shares     Contractual Life (Years)              of Shares           Price
    ------           ---------     ------------------------              ---------          ------
<S>                  <C>           <C>                                   <C>                <C>
$         1.30           44,350              7.7                            29,032          $ 1.30
          1.75          219,284             9.45                            23,333            1.75
  1.84 to 4.31        1,309,320             9.05                           476,275            2.86
          4.50          231,694             9.21                               267            4.50
 4.53 to 12.58           63,408             8.62                            20,605            7.19
         13.00          223,010             8.36                           153,940           13.00
                      ---------                                            -------
                      2,091,066             8.99                           703,452          $ 5.10
                      =========                                            =======
</TABLE>

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 $103,817 and $1,774,188, and $1,572 and $263,169, 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 were paid in 2000. During the years ended December 31,
2000 and 1999, Consejero.com had total revenue and total expenses of $16,359 and
$810,867, and $8,036 and $2,217,879, 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.

                                      43
<PAGE>

NOTE 6 - DIVESTITURES

     Bank Advertising News

     In December 1998, the Company sold substantially all of the assets,
including the intellectual property of one of its newsletters, Bank Advertising
News. The newsletter was sold for $125,000 in cash and assumed liabilities of
approximately $80,000. The gain on the sale was $185,588, net of $16,524 of
selling expenses, and has been recorded in other income.

     Revenue for Bank Advertising News for the six month period ended December
31, 1998 and the year ended June 30, 1998 was $82,953 and $178,270,
respectively. Cost of operations for Bank Advertising News for the six month
period ended December 31, 1998 and the year ended June 30, 1998 $53,138 and
$57,445, respectively. Net liabilities of Bank Advertising News at the date of
sale were approximately $80,000.

     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.

     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 $18,162 and $385,973, and $49,513 and $577,278,
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.

     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

                                       44
<PAGE>

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.

     Summary operating results of discontinued operations are 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)
                                           ============   ============

     Net assets of discontinued operations held for sale as of December 31, 1999
relate to Pivot.


NOTE 7 - FINANCIAL STATEMENT DETAILS

                Furniture, Fixtures and Equipment

Furniture, fixtures and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                  December 31,
                                                             2000             1999
                                                             ----             ----
<S>                                                        <C>              <C>
Furniture and fixtures                                     $ 349,360       $ 322,800
Computers and software, including assets under
  capital leases of $694,721 at December 31, 2000
  and 1999, respectively                                    2,621,339       2,133,833
Equipment, including assets under capital lease
  of $17,950 at December 31, 2000
  and 1999, respectively                                      140,813         152,258
Leasehold improvements                                        160,701         172,357
Land                                                           63,354          63,354
                                                          -----------     -----------
                                                            3,335,567       2,844,602
Less accumulated depreciation and amortization,
  including amounts related to assets under capital
  leases of $465,001 and $233,915 at December 31,
  2000 and 1999, respectively                              (1,605,112)       (823,476)
                                                          -----------     -----------
                                                          $ 1,730,455     $ 2,021,126
                                                          ===========     ===========
</TABLE>

           Intangible Assets

<TABLE>
<CAPTION>
Intangible assets consist of the following:                      December 31,
                                                              2000             1999
                                                              ----             ----
<S>                                                       <C>             <C>
Goodwill                                                  $         -     $   949,818
Trademarks and URL's                                          129,011         127,976
Other                                                         151,362         151,992
                                                          -----------     -----------
                                                              280,373       1,229,786
Less accumulated amortization                                (191,948)       (278,496)
                                                           ----------      ----------
                                                          $    88,425      $  951,290
                                                          ===========      ==========
</TABLE>

Amortization expense was $264,558, $155,239, $543 and $5,937 for the years ended
December 31, 2000 and 1999, the six months ended December 31, 1998, and the year
ended June 30, 1998, respectively.

                Other Assets

<TABLE>
<CAPTION>
Other assets consist of the following:                             December 31,
                                                              2000             1999
                                                              ----             ----
<S>                                                         <C>             <C>
Restricted cash                                             $ 15,239        $  304,366
Computers and software deposits                               55,583           998,580
Other deposits                                                62,987           118,768
                                                           ---------        ----------
                                                           $ 133,809        $1,421,714
                                                           =========        ==========
</TABLE>

                Other Accrued Expenses

<TABLE>
<CAPTION>
Other accrued expenses consist of the following:                 December 31,
                                                               2000        1999
                                                               ----        ----
<S>                                                       <C>              <C>
 Accrued payroll and related benefits                     $   379,389       $   235,466
 Vacation                                                     146,275           240,355
 Sales commissions                                            306,470           311,356
 Marketing                                                    334,807         4,476,969
 Partner payments                                             136,613           140,231
 Professional fees                                            234,032           470,864
 Legal and other                                              478,650            11,678
                                                          -----------       -----------
                                                          $ 2,016,236       $ 5,886,919
                                                          ===========       ===========
</TABLE>

NOTE 8 - INCOME TAXES

     The Company did not record any income tax expense or benefit for the years
ended December 31, 2000 and 1999, the six months ended December 31, 1998 and the
year ended June 30, 1998 due to the losses incurred.

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

<TABLE>
<CAPTION>
                                                                            Six Months
                                                                              Ended
                                             Year Ended December 31,       December 31,    Year Ended
                                               2000            1999            1998       June 30, 1998
                                               ----            ----            ----       -------------
<S>                                      <C>              <C>              <C>            <C>
Deferred Tax Assets:
Net operating loss carryforwards         $  16,666,480    $ 12,276,287     $ 1,983,228    $   1,196,975
Intangible assets and other                    249,942         253,712         143,438          143,438
Allowance for doubtful accounts                 75,260          88,431           9,350            9,011
Deferred compensation                          906,116         436,248               -                -
                                         -------------   -------------     -----------    -------------
    Total gross deferred tax assets         17,897,798      13,054,678       2,136,016        1,349,424
Less valuation allowance                   (17,833,626)    (12,984,981)     (2,136,016)      (1,349,424)
                                         -------------   -------------     -----------    -------------
    Net deferred tax assets                     64,172          69,697               -                -
Deferred Tax Liabilities:
Depreciation                                   (64,172)        (69,697)              -                -
                                         -------------   -------------    ------------    -------------
                                         $           -   $           -    $          -    $           -
                                         =============   =============    ============    =============
</TABLE>

     The valuation allowance for deferred tax assets as of December 31, 2000,
1999 and 1998, and as of June 30, 1998 was $17,833,626, $12,984,981, $2,136,016,
and $1,349,424, respectively. The net change in the total valuation allowance
for the  years  ended December 31, 2000 and 1999, the six month period ended
December 31, 1998 and the year ended June 30, 1998, was an increase of
$4,848,645, $10,848,965, $786,592, and  $1,211,946, 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, 2000 and
1999, the six month period ended December 31, 1998 and the year ended June 30,
1998. The Company recorded no tax benefit for these periods.

     The difference between the expected income tax benefit and the actual
income tax benefit is due primarily to an approximately $5,000,000 higher gain
on the disposal of discontinued operations for tax purposes.

                                       45
<PAGE>

     At December 31, 2000, the Company had net operating loss carryforwards of
approximately $44,290,000 which expire beginning in 2012 through 2020. The
amount of net operating loss carryforwards may be limited if the Company has an
ownership change.

NOTE 9 - OTHER 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 majority stockholder. Total rent paid to Bombay for the years ended
December 31, 2000 and 1999, the six month period ended December 31, 1998, and
the year ended June 30, 1998 was $287,164, $265,815, $99,192 and  $164,552,
respectively.

     Morse has from time to time advanced capital to the Company. Such loans for
the year ended December 31, 2000 and 1999, the six month period ended December
31, 1998 and the year ended June 30, 1998 amounted to $0,  $0, $0, and $200,000,
respectively. Interest rates for the loans were 6.5% - 7%. During 1997, certain
stockholder loans were contributed to capital (Note 3).

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 (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, 2000 and 1999, the six
month period ended December 31, 1998, and the year ended June 30, 1998, amounted
to $562,702,  $485,718, $109,872, and  $164,552, respectively.

      Future minimum lease payments under non-cancelable operating leases and
future minimum capital lease payments as of December 31, 2000 were:

<TABLE>
<CAPTION>
                                                                                                Operating      Capital
                                                                                                 Leases        Leases
                                                                                                 ------        ------
<S>                                                                                              <C>          <C>
Year Ending December 31,
-----------------------
       2001                                                                                      $ 154,720    $ 232,331
       2002                                                                                        160,136       37,683
       2003                                                                                        165,740        3,518
       2004                                                                                        171,541            -
       2005                                                                                        177,545            -
 Thereafter                                                                                        136,624            -
                                                                                                 ---------    ---------
Total minimum lease payments                                                                     $ 966,306      273,532
                                                                                                 =========
Less amount representing interest at rates ranging from 3.94% to 23.23%                                         (18,066)
                                                                                                              ---------
Present value of net minimum capital lease payments                                                             255,466
Less current installments                                                                                      (214,651)
                                                                                                              ---------
Obligations under capital leases, excluding current installments, included in other liabilities               $  40,815
                                                                                                              =========
</TABLE>

     The above minimum lease payments have not been reduced by minimum sublease
rentals of approximately $105,600  due in 2001 and 2002 under a non-cancelable
sublease.

     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.  The lease

                                       46
<PAGE>

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.
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 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
or results of operations.

     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, 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 and
prospectus 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 has filed a motion to dismiss this
complaint and the motion has been submitted to the court however, no decision
has been rendered. If the motion is denied the Company intends to vigorously
defend against the lawsuit. The Company has accrued an appropriate amount and,
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,
Professional Direct Agency, Inc. ("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 its former owner. In March 2001, the case was
dismissed based on a technical deficiency.

     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 become
exercisable in equal monthly increments commencing on April 30, 2001 and
concluding on March 31, 2002.  The Company will recognize compensation expense
of approximately $217,000 over the vesting period.

     On April 27, 2000, Elisabeth DeMarse was appointed 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. Upon Ms. DeMarse's termination of
employment for certain reasons (i.e., without cause, disability, resignation for
good reason (as defined in the agreement), or a change of control),

                                       47
<PAGE>

the Company agrees 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 otherwise extended by the parties. Ms. DeMarse was also granted options
to purchase 541,936 shares of the Company's 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 options vest as to 25% of
the shares six months from the date of grant; and as to the remaining 75%, in
equal monthly installments over the next 18 months thereafter, with 100% vesting
on the second anniversary of the date of grant.

NOTE 11 - SEGMENT INFORMATION

     The Company elected to change the reporting of its business segments as of
July 1, 2000, and restated its prior periods to conform with 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 our Internet site
Bankrate.com, and our 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 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 our 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 also charges a commission for the
placement of the Consumer Mortgage Guide in print publications. 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, 2000 and 1999, the six months ended December
31, 1998, and the year ended June 30, 1998, the five largest customers accounted
for approximately 21%, 14%, 18% and 13%, respectively, of total revenue for
those periods. No revenues were generated outside of the United States.

     Summarized segment information as of December 31, 2000, 1999 and 1998, and
June 30, 1998, for the years ended December 31, 2000 and 1999, and for the six
months ended December 31, 1998, and for the year ended June 30, 1998,
respectively, is presented below.

<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                               1,358,100          582,043              -       1,940,143
General and administrative expenses               5,788,196        1,376,961              -       7,165,157
Restructuring and impairment charges                      -                -      2,285,422       2,285,422
Depreciation and amortization                       611,439          262,045              -         873,484
Goodwill amortization                               231,214                -              -         231,214
Noncash based stock compensation                          -                -      1,311,912       1,311,912
Other income (expense), net                               -                -        230,459         230,459
Segment profit (loss)                            (9,928,356)      (1,281,964)    (3,366,875)    (14,577,195)
Discontinued operations                                   -                -     (2,343,365)     (2,343,365)
Net loss                                         (9,928,356)      (1,281,964)    (5,710,240)    (16,920,560)
Total assets                                    $ 2,714,672      $ 1,029,069    $ 8,890,649    $ 12,634,390

<CAPTION>
                                                                    Print
                                                  Online          Publishing
                                                Publishing      and Licensing       Other          Total
                                                ----------      -------------       -----          -----
Year Ended December 31, 1999:
<S>                                             <C>             <C>             <C>            <C>
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                                             2,976,439                -              -       2,976,439
Marketing                                        16,459,113                -              -      16,459,113
Product development                               1,411,682          605,007              -       2,016,689
General and administrative expenses               4,372,341        1,787,025              -       6,159,366
Depreciation and amortization                       295,254          126,538              -         421,792
Noncash based stock compensation                          -                -      3,305,104       3,305,104
Other income (expense), net                               -                -     (1,782,644)     (1,782,644)
Segment profit (loss)                           (22,831,866)      (1,433,019)    (5,087,748)    (29,352,633)
Discontinued operations                                   -                -     (2,135,697)     (2,135,697)
Net loss                                        (22,831,866)      (1,433,019)    (7,223,445)    (31,488,330)
Total assets                                    $ 4,861,765      $ 1,365,422    $26,372,389    $ 32,599,576

<CAPTION>
                                                                    Print
                                                   Online         Publishing
                                                 Publishing     and Licensing        Other        Total
                                                ----------      -------------        -----        -----
<S>                                             <C>             <C>             <C>            <C>
Six Months Ended December 31, 1998:
Revenue                                         $ 1,808,877      $ 1,660,314    $         -    $ 3,469,191
Cost of revenue                                   1,424,255        1,100,693              -      2,524,948
Gross margin                                        384,622          559,621              -        944,243
Sales                                               837,697                -              -        837,697
Marketing                                           304,919                -              -        304,919
Product development                                 315,263          135,113              -        450,376
General and administrative expenses                 454,179          416,878              -        871,057
Depreciation and amortization                        68,944           29,547              -         98,491
Goodwill amortization                                     -                -              -              -
Noncash based stock compensation                          -                -        669,000        669,000
Other income (expense), net                               -                -        192,079        192,079
Segment profit (loss)                            (1,596,380)         (21,917)      (476,921)    (2,095,218)
Total assets                                    $ 1,117,111        $ 349,141    $ 1,633,100    $ 3,099,352

<CAPTION>
                                                                    Print
                                                   Online         Publishing
                                                 Publishing     and Licensing        Other        Total
                                                ----------      -------------        -----        -----
<S>                                             <C>             <C>             <C>            <C>
Year Ended June 30, 1998:
Revenue                                         $ 1,281,284        $ 2,559,293  $         -    $ 3,840,577
Cost of revenue                                   1,339,540          1,961,714            -      3,301,254
Gross margin                                        (58,256)           597,579            -        539,323
Sales                                               705,595                  -            -        705,595
Marketing                                           145,632                  -            -        145,632
Product development                                 488,437            209,330            -        697,767
General and administrative expenses                 555,049          1,108,679            -      1,663,728
Depreciation and amortization                        46,666             20,000            -         66,666
Noncash based stock compensation                          -                  -       88,563         88,563
Other income (expense), net                               -                  -       46,135         46,135
Segment profit (loss)                            (1,999,635)          (740,430)     (42,428)    (2,742,493)
Total assets                                    $   651,904        $   205,568  $   910,427    $ 1,767,899
</TABLE>

NOTE 12 - SUBSEQUENT EVENTS (Unaudited)

     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.

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

 None.

                                       48
<PAGE>

                                   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 2001 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 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 2000,
all filing requirements applicable to its directors and executive officers were
complied with in a timely manner except that G. Cotter Cunningham, Robert J.
DeFranco, Joseph Jones and Procopia Skoran filed a late Form 4. 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

     In accordance with General Instruction G(3) of Form 10-K, 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

     In accordance with General Instruction G(3) of Form 10-K, 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

     In accordance with General Instruction G(3) of Form 10-K, 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.

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 following exhibits are filed with or incorporated by reference in this
report. Where filing is made by incorporation by reference to a previously filed
registration statement or report, such registration statement or report is
identified in parenthesis.

                                       49
<PAGE>

The Company will furnish any exhibit upon request to Robert J. DeFranco,
Secretary, Bankrate, Inc., 11811 U.S. Highway One, Suite 101, North Palm Beach,
Florida 33408.

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. *

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)

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)

                                       50
<PAGE>

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)

23.1  Consent of KPMG LLP.*

*  Filed herewith.

(1) The Exhibit is 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.

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

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

(4) The Exhibit is 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) The Exhibit is 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) The Exhibit is 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) The Exhibit is 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.

                                       51
<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 27th day of
March, 2001.

                        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 27, 2001
------------------------        Chief Executive Officer
Elisabeth DeMarse               (Principal Executive Officer)


/s/ Robert J. DeFranco          Senior Vice President           March 27, 2001
------------------------        Chief Financial Officer
Robert J. DeFranco


/s/ G. Cotter Cunningham        Senior Vice President           March 27, 2001
------------------------        Chief Operating Officer
G. Cotter Cunningham


/s/ Jeffrey M. Cunningham       Chairman of the Board           March 27, 2001
------------------------
Jeff M. Cunningham


/s/ Bruns H. Grayson            Director                        March 27, 2001
------------------------
Bruns H. Grayson


/s/ Bill Martin                 Director                        March 27, 2001
------------------------
Bill Martin


/s/ Peter C. Morse              Director                        March 27, 2001
------------------------
Peter C. Morse


/s/ Robert P. O'Block           Director                        March 27, 2001
------------------------
Robert P. O'Block


/s/ Randall E. Poliner          Director                        March 27, 2001
------------------------
Randall E. Poliner

                                       52