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

                                    FORM 10-Q

(Mark one)
 [X] QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(D) OF THE  SECURITIES
     EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                       OR

 [ ] TRANSITION REPORT  PURSUANT TO  SECTION 13 OR 15(D) OF THE SECURITIES
   EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________TO__________.


                         COMMISSION FILE NUMBER 0-22212


                            ONHEALTH NETWORK COMPANY
             (Exact name of registrant as specified in its charter)

             WASHINGTON                                   41-1686038
   (State or other jurisdiction of                    (I.R.S. Employer
    incorporation or organization)                    Identification No.)

        808 HOWELL STREET, SUITE 400
            SEATTLE, WASHINGTON                              98101
   (Address of principal executive offices)                (Zip Code)

       Registrant's telephone number, including area code: (206) 583-0100

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




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

Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $0.01 par value


     Indicate by a 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 [ ]

     Number of shares outstanding of the registrant's common stock as of
October 31, 1999:   20,312,506






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<PAGE>


                                TABLE OF CONTENTS

                                                                           PAGE
                          PART I. fINANCIAL INFORMATION                    ----

   ITEM 1.  Financial Statements..............................................3

             Balance Sheets as of September 30, 1999 and December 31, 1998....3

             Statements of Operations for the Three and Nine Months Ended
             September 30, 1999 and 1998......................................4

             Statements of Cash Flows for the Nine Months Ended
               September 30, 1999 and 1998....................................5

             Notes to Financial Statements ...................................6

   ITEM 2.  Management's Discussion and Analysis of Financial Condition
             and Results of Operations........................................9




                           PART II. OTHER INFORMATION

   ITEM 1. Legal Proceedings.................................................12

   ITEM 6. Exhibits and Reports on Form 8-K..................................12



                                       2
<PAGE>


                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                            ONHEALTH NETWORK COMPANY
                                 BALANCE SHEETS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                           September 30,        December 31,
                                                               1999                1998
                                                        -----------------    ----------------
                                                           (Unaudited)
<S>                                                      <C>                   <C>
ASSETS

Current assets:
      Cash and cash equivalents                          $         4,973       $       2,119
      Restricted cash                                                500                   -
      Accounts receivable, net of allowances of
        $311 (1999) and $256 (1998)                                  846                 509
    Prepaid advertising                                            8,234                 197
    Other current assets                                             209                 212
                                                        -----------------    ----------------
Total current assets                                              14,762               3,037

Furniture and equipment, net                                       1,181                 735
Goodwill, net                                                      3,440                   -
Intangibles, net                                                      42                   -
Other non-current assets                                              46                 122
                                                        -----------------    ----------------
Total assets                                             $        19,471       $       3,894
                                                        =================    ================

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current liabilities:
     Accounts payable                                    $         3,643       $       1,526
     Other accrued expenses                                        1,485               2,669
                                                         ----------------     ----------------
Total current liabilities                                          5,128               4,195

Other non-current liabilities                                         36                   -

Shareholders' equity:
      Preferred stock, $0.01 par value; authorized,
          1,000; issued and outstanding, none                          -                   -
      Common stock, $0.01 par value; authorized,
          100,000; issued and outstanding, 20,313 (1999)
          and 12,800 (1998)                                          203                  128
      Additional paid-in-capital                                 133,668               89,159
      Accumulated deficit                                       (118,122)             (89,515)
      Deferred compensation                                       (1,442)                 (73)
                                                         -----------------    ----------------
Total shareholders' equity (deficit)                              14,307                 (301)
                                                         -----------------    ----------------
Total liabilities and shareholders' equity (deficit)     $        19,471       $        3,894
                                                         =================    ================
</TABLE>


     The accompanying notes are an integral part of the financial statements

                                       3
<PAGE>



                            ONHEALTH NETWORK COMPANY
                            STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                Three Months Ended                 Nine Months Ended
                                                                  September 30,                      September 30,
                                                           -----------------------------    ---------------------------------
                                                               1999             1998             1999               1998
                                                           -------------    ------------    --------------    ---------------
<S>                                                          <C>              <C>              <C>             <C>

Net revenue                                                  $   1,005        $     248        $    1,787      $        733
Cost of revenue                                                     88              549               187             1,290
                                                           -------------    ------------    --------------    ---------------
Gross margin                                                       917             (301)            1,600              (557)

Operating expenses:
     Product development, editorial and design                   1,976              547             5,023             2,105
     Sales and marketing                                        15,491            1,265            22,503             2,696
     General and administrative                                    798              420             2,795             1,653
     Acquisition related costs, including amortization
      of goodwill and purchased intangibles                         73                -                73                 -
     Stock-based compensation                                       92                -                92                 -
                                                           -------------    ------------    --------------    ---------------
            Total operating expenses                            18,430            2,232            30,486             6,454
                                                           -------------    ------------    --------------    ---------------
Loss from operations                                           (17,513)          (2,533)          (28,886)           (7,011)

     Interest income, net                                           49               30               277                84
     Other income, net                                               -                -                 2               282
                                                           -------------    ------------    --------------    ---------------
     Total interest and other income, net                           49               30               279               366
                                                           -------------    ------------    --------------    ---------------
Net loss                                                       (17,464)          (2,503)          (28,607)           (6,645)
Preferred stock dividends                                            -              (36)                -               (92)
Preferred stock accretion                                            -             (374)                -              (528)
                                                           -------------    ------------    --------------    ---------------
Net loss applicable to common shareholders                   $ (17,464)       $  (2,913)       $  (28,607)     $     (7,265)
                                                           =============    ============    ==============    ===============

Net loss per common share-
     Basic and diluted                                       $   (1.00)       $   (0.27)         $  (1.77)     $      (0.70)
                                                           =============    ============    ==============    ===============
Weighted average number of common shares
     outstanding                                                17,388           10,698            16,165            10,323
                                                           =============    ============    ==============    ===============
</TABLE>


     The accompanying notes are an integral part of the financial statements

                                       4
<PAGE>



                                           ONHEALTH NETWORK COMPANY
                                           STATEMENTS OF CASH FLOWS
                                                (In thousands)
                                                 (Unaudited)
<TABLE>
<CAPTION>
                                                                            Nine Months Ended September 30,
                                                                        --------------------------------------
                                                                              1999                  1998
                                                                        ----------------       ---------------
<S>                                                                     <C>                    <C>

Cash flows from operating activities:
     Net loss                                                           $      (28,607)        $      (6,645)
     Adjustments to reconcile net loss to cash used in
       operating activities:
          Depreciation and amortization                                            230                   663
          Provision for (recoveries of) doubtful
             accounts and returns                                                   53                  (809)
          Compensation associated with  stock option
             grants                                                                 37                     -
          Amortization of prepaid advertising and
             promotional agreements                                              1,106                     -
          Amortization of acquisition related costs,
             including amortization of goodwill and
             intangibles                                                            73                     -
          Amortization of deferred compensation                                     92                     -
          Other                                                                     17                     -
          Changes in assets and liabilities:
             Increase in restricted cash                                          (500)                    -
             Decrease (increase) in accounts receivable                           (391)                  835
             Decrease in inventories                                                 -                   150
             Increase in other current assets                                   (7,253)                   (1)
             Decrease in other non-current assets                                   76                     -
             Increase (decrease) in accounts payable                             2,117                   (12)
             Decrease in other accrued expenses                                 (1,155)               (1,290)
                                                                        ----------------       ---------------
Net cash used in operating activities                                          (34,105)               (7,109)

Cash flows from investing activities:
      Proceeds from disposal of furniture and
         equipment                                                                  -                    188
      Capital expenditures                                                       (676)                  (488)
      Acquisition of business                                                     (60)                     -
                                                                        ----------------       ---------------
Net cash used in investing activities                                            (736)                  (300)

Cash flows from financing activities:
      Proceeds from issuance of convertible preferred
         stock                                                                      -                  5,000
      Net proceeds from issuance of common stock:
         Private placements                                                    14,278                      -
         Public offerings                                                      22,737                      -
         Exercise of options                                                    1,126                    941
         Exercise of warrants                                                   1,586                      -
         Payment of financing related costs                                    (2,032)                     -
                                                                        ----------------       ---------------
Net cash provided by financing activities                                      37,695                  5,941
                                                                        ----------------       ---------------
Net increase in cash and cash equivalents                                       2,854                 (1,468)
Cash and cash equivalents at beginning of year                                  2,119                  2,488
                                                                        ================       ===============
Cash and cash equivalents at end of year                                $       4,973          $       1,020
                                                                        ================       ===============
</TABLE>

     The accompanying notes are an integral part of the financial statements

                                       5
<PAGE>


                            ONHEALTH NETWORK COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (UNAUDITED)



NOTE 1.         DESCRIPTION OF BUSINESS

OnHealth  Network  Company,  formerly  known  as  IVI  Publishing,   Inc.,  (the
"Company"),  is an  Internet-based  provider of high quality  health and medical
information and applications to a broad base of consumers. Through the Company's
Internet Web site, onhealth.com,  the Company produces and distributes original,
relevant health content  including  in-depth reports,  personalized  information
retrieval,  specific guides to healthcare  services and information,  editorials
and interactive community environments.

NOTE 2.         BASIS OF PRESENTATION

The accompanying unaudited financial statements of OnHealth Network Company have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information  and  with  the  instructions  to Form  10-Q and
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring  adjustments)  considered  necessary for a fair presentation
have been included.  Operating  results for the nine months ended  September 30,
1999 are not necessarily  indicative of the results that may be expected for the
year ending December 31, 1999. The accompanying  unaudited financial  statements
should  be read in  conjunction  with the  financial  statements  and the  notes
thereto  included in the OnHealth  Network  Company report to the Securities and
Exchange  Commission on Form 10-K, as amended,  for the year ended  December 31,
1998.

NOTE 3.         RECLASSIFICATIONS

Certain  reclassifications  have been made for  consistent  financial  statement
presentation.

NOTE 4.         RESTRICTED CASH

On August 19,  1999,  the Company  pledged  $500,000 of cash for an  irrevocable
standby  letter  of credit  related  to the lease of new  office  space  that is
classified as restricted  cash on the balance  sheet.  The letter of credit will
expire on  August  20,  2000 and will only be drawn on in the event the  Company
fails  to  comply  with the  terms  and  conditions  as set  forth in the  lease
agreement.

NOTE 5.         LOSS PER COMMON SHARE

Basic earnings per share ("EPS")  excludes any dilutive  effects of common stock
equivalents - options,  warrants and convertible securities - and is computed by
dividing the net loss available to common  shareholders by the  weighted-average
number of common shares outstanding  during the period.  Diluted EPS is computed
by dividing net income available to common shareholders by the  weighted-average
number of shares of common stock and common stock equivalent shares outstanding.
Basic and diluted EPS excludes 204,460 outstanding restricted common shares.

The effects of common stock  equivalents  are excluded from the  computation for
the periods presented as their effects are anti-dilutive.

The components of basic and diluted loss per common share are as follows:

<TABLE>
<CAPTION>
                                                            Three Months Ended                   Nine Months Ended
                                                              September 30,                     September 30, 1999
                                                     ---------------------------------    --------------------------------
                                                         1999               1998              1999              1998
                                                     --------------     --------------    --------------    --------------
                                                                    (In thousands, except per share data)
   <S>                                               <C>                <C>                <C>                <C>

   Net loss applicable to common  shareholders
      (numerator)                                    $    (17,464)      $     (2,913)     $    (28,607)     $     (7,265)
                                                     ==============     ==============    ==============    ==============

   Weighted average common shares outstanding
      (denominator)                                        17,388             10,698            16,165            10,323
                                                     ==============     ==============    ==============    ==============

   Loss per share:
       Basic and diluted                             $      (1.00)      $      (0.27)     $      (1.77)     $      (0.70)
                                                     ==============     ==============    ==============    ==============
 </TABLE>
                                      6
<PAGE>


NOTE 6.         COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS
<TABLE>
<CAPTION>

                                                               September 30,          December 31,
       (In thousands)                                              1999                  1998
                                                             -----------------     -----------------
                                                                (Unaudited)
       <S>                                                   <C>                   <C>


       Furniture and equipment:
            Computer hardware                                $       1,696         $       1,032
            Software                                                   187                   186
            Equipment                                                    6                     -
            Furniture & fixtures                                       225                   220
            Leasehold improvements                                      71                    71
                                                             -----------------     -----------------
                                                                     2,185                 1,509
            Less accumulated depreciation                           (1,004)                 (774)
                                                             =================     =================
       Total                                                 $       1,181         $         735
                                                             =================     =================

       Other accrued expenses:
            Litigation loss                                  $           -          $        677
            Advertising                                                  -                   609
            Royalties                                                  230                   338
            Payroll taxes                                                -                   358
            Other                                                    1,255                   687
                                                             -----------------     -----------------
       Total                                                 $       1,485         $       2,669
                                                             =================     =================
</TABLE>

NOTE 7.         EQUITY TRANSACTIONS

During  January 1999,  the Company  completed a $14,278,000  private  placement,
which resulted in the issuance of 2,596,000 shares of the Company's common stock
at $5.50 per share. Proceeds, net of offering costs, totaled approximately $14.1
million.

During  September  1999, the company  completed a public offering of 3.4 million
shares,  which includes the  underwriter's  over allotment of 300,000 shares, of
the Company's  common  stock,  at $6.6875 per share.  Proceeds,  net of offering
costs, totaled approximately $20.9 million.

NOTE 8.          ACQUISITION OF BABYDATA.COM INC.

On September 9, 1999,  the Company  acquired  all of the  outstanding  shares of
common stock of BabyData.com  Inc., a premier Web site for pregnant  couples and
those trying to conceive.

The aggregate  consideration for the acquisition was approximately $5.1 million,
which consisted of 681,534 shares of OnHealth common stock,  with a market value
of approximately $5.0 million and approximately $60,000 of acquisition costs. Of
the 681,534  shares issued in connection  with the purchase,  204,460 shares are
restricted pursuant to the employment agreement entered into by OnHealth and one
key employee of BabyData.  The  acquisition  of BabyData has been  accounted for
using the purchase method of accounting.

The  intangible  component  of the  consideration  for this  transaction,  which
includes   goodwill  and   purchased   intangibles,   will  be  amortized  on  a
straight-line basis over three years. The deferred  compensation  component will
be amortized on a straight-line basis over one year.

The  following  table  reflects  unaudited  consolidated  pro forma  results  of
operations of OnHealth and BabyData on the basis that the  acquisition had taken
place at the beginning of each period presented.  Such pro forma amounts are not
necessarily  indicative  of what the actual  consolidated  results of operations
might have been if the  acquisitions  had been effective at the beginning of the
respective  periods.  The pro forma  information  does not include any  one-time
charges for transaction-related costs relating to the acquisition of BabyData.

                                             Nine Months Ended September 30,
                                          -------------------------------------
                                                1999                 1998
                                          -----------------    ----------------
    Revenue                               $          1,787      $          733
    Net loss applicable to common
      shareholders                        $        (30,468)     $       (9,286)
                                          =================    ================
    Basic and diluted net loss
      per share                           $          (1.83)     $        (0.86)
                                          =================    ================
                                       7
<PAGE>

NOTE 9.         SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                            Nine Months Ended September 30,
                                                           ------------------------------------
                                                              1999                 1998
                                                           --------------       ---------------
                                                                    (In thousands)
<S>                                                        <C>                  <C>

 Cash paid during the periods for:
   Income taxes                                            $           3        $            7
 Non-cash investing and financing transactions:
   Common stock issued for  advertising and
    promotional agreements                                         1,896                     -
   Conversion of preferred stock to common                             -                 2,715
   Preferred stock/warrant discount                                    -                   702
   Preferred stock/warrant discount accretion                          -                  (528)
   Preferred stock dividend                                            -                    92
   Stock options and warrants issued for services                      -                    60
   Common stock issued for company acquired                        4,993                     -
</TABLE>

NOTE 10.        LEGAL PROCEEDINGS

In June 1999, Jon Fisse, the Company's newly named Chief Operating Officer, left
the Company  before the Company and Mr. Fisse were able to agree on the terms of
his  employment  agreement.  In June  1999,  the  Company  filed  a  declaratory
judgement action in the United States District Court for the Western District of
Washington  seeking to declare that Mr. Fisse terminated his employment and that
the Company owes him no future  remuneration  or stock option  benefits.  On the
same day, Mr. Fisse filed a lawsuit in the United States  District Court for the
Southern District of New York, asserting that the Company violated his rights in
connection  with his separation from the Company,  seeking damages which,  among
other things,  include  severance  compensation and stock option  benefits.  The
action filed in Washington has been  transferred to New York.  Answers have been
filed in both cases and the parties are in the  discovery  stage of  litigation.
The  Company  believes  it  has  valid  defenses  against  Mr.  Fisse's  claims.
Nevertheless,  the outcome of the lawsuit may have a material  adverse affect on
the Company's financial position and results of operations.

NOTE 11.        COMMITMENTS AND CONTINGENCIES

In July 1999,  the Company  entered into a lease for new office space located in
Manhattan,  New York. The new office space consists of 8,250 square feet costing
approximately $22,000 per month through November 30, 2004.

NOTE 12.        SUBSEQUENT EVENTS

In October 1999, the Company entered into an agreement with About.com, a leading
network of niche  vertical  sites,  whereby  beginning in the fourth  quarter of
1999, OnHealth will become the exclusive third party provider of health news and
information complementing About.com's existing Health and Fitness Channel. Under
the financial terms of the agreement, OnHealth will pay both guaranteed payments
and other fees, including 162,602 shares of common stock.

                                       8
<PAGE>


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

RESULTS OF OPERATIONS

NET REVENUE

Net revenue for the three and nine month  periods  ended  September 30, 1999 and
1998 was as follows:

<TABLE>
<CAPTION>

(In thousands)                                    Three Months Ended September 30,       Nine Months Ended September 30,
                                                -------------------------------------  ------------------------------------
                                                      1999                1998                1999               1998
                                                ----------------   ------------------   ----------------   ----------------
<S>                                             <C>                <C>                  <C>                <C>
Online                                          $         865      $           121      $         1,428    $           267
E-commerce                                                130                    -                  281                  -
Contract development and other                             10                   55                   59                465
Product sales and licensing                                 -                   72                   19                  1
                                                ================   ==================   ================   ================
Net revenue                                     $       1,005      $            248     $         1,787     $          733
                                                ================   ==================   ================   ================
</TABLE>

Net revenue for the three month period  ended  September  30, 1999  increased by
$757,000, or 305%, to $1,005,000, from $248,000 for the same period in 1998. Net
revenue  for the nine  month  period  ended  September  30,  1999  increased  by
$1,054,000,  or 144%, to $1,787,000,  from $733,000 for the same period in 1998.
The increase in revenue is  primarily  due to  increased  online and  e-commerce
revenue  generated  by our  onhealth.com  Web  site,  which was  redesigned  and
relaunched in July 1998, partially offset by a reduction in contract development
and other and product sales and licensing  revenue.  An increase in user traffic
and the number of site  sponsorship and advertising  clients over the same three
and nine month  periods in the prior year  accounted  for the increase in online
and  e-commerce  revenue.  E-commerce  revenue  is the  result of new  contracts
entered into during 1999. The decrease in contract development revenue and other
and product sales and licensing revenue  generally  reflects the Company's shift
toward online efforts. The Company does not anticipate receiving any significant
revenue from  contract  development  and other or product sales and licensing in
the future.

GROSS MARGIN

Gross margin as a percentage of net revenue for the three and nine month periods
ended  September  30, 1999 was 91% and 90%,  respectively,  compared to negative
gross  margins of 121% and 76% for the same  periods in the previous  year.  The
improvement  in gross margin during 1999 is primarily due to the high margins of
online revenue in relation to the gross margins achieved in the first and second
quarters of 1998 for CD-ROM revenue.  The negative gross margins in 1998 are the
result of including certain editorial and design costs, related to the July 1998
onhealth.com  site  relaunch,  in cost of revenue in the third  quarter 1998, as
well as  CD-ROM  royalty  expenses,  CD-ROM  inventory  write-offs  and  royalty
expenses related to cable television licensing revenue. The editorial and design
costs included in cost of revenue in the third quarter of 1998 were reclassified
from operating  expenses.  In 1999, cost of revenue consists  primarily of costs
related  to  advertising  and  sponsorship  and  e-commerce  revenue  as well as
third-party royalties relating to content sales.

OPERATING EXPENSES

Total  operating  expenses for the three month period ended  September  30, 1999
increased  $16,198,000,  or 726%, to  $18,430,000  from  $2,232,000 for the same
period  in 1998.  Total  operating  expenses  for the nine  month  period  ended
September  30,  1999  increased  $24,032,000,   or  372%,  to  $30,486,000  from
$6,454,000  for the same  period in 1998.  The  increase  was  primarily  due to
increased sales and marketing efforts related to the Company's  onhealth.com Web
site and increased product development, editorial and design expenses.

PRODUCT DEVELOPMENT,  EDITORIAL AND DESIGN. The increase in product development,
editorial  and design  expenses  during the three and nine month  periods  ended
September 30, 1999 of $1,429,000, or 261%, and $2,918,000 or 139%, respectively,
from the same  periods in 1998 was  primarily  due to an  increase in the use of
development and editorial outside contractors and increased  headcount.  Product
development, editorial and design expenses consist primarily of compensation and
related  costs  for  our  development,  editorial,  design  and  systems  staff,
consulting fees,  third-party content acquisition costs and Web site maintenance
and enhancement costs related to the Company's onhealth.com Web site.

SALES AND MARKETING.  The increase in sales and marketing expenses for the three
and nine month periods ended September 30, 1999 of $14,226,000,  or 1,125%,  and
$19,807,000, or 735%, respectively,  from the same periods in 1998 was primarily
the  result  of  increased   advertising   expenses  related  to  the  Company's
onhealth.com Web site as well as increased  headcount.  The broad-based consumer
targeted  advertising campaign commenced early in the third quarter of 1999. The
Company intends to continue its advertising  campaign  throughout 1999 and, as a
result,  the Company expects the  advertising  expenses in the fourth quarter of
1999 to increase significantly over the fourth quarter of 1998.

                                       9
<PAGE>

GENERAL AND ADMINISTRATIVE.  The increase in general and administrative expenses
for the three and nine month  periods ended  September 30, 1999 of $378,000,  or
90%, and  $1,142,000,  or 69%,  respectively,  from the same periods in 1998 was
primarily due to an increase in headcount,  legal fees and  settlements,  travel
and bad debt expense.  Year-to-date legal fees and settlements  include $273,000
for settlement and legal costs related to the final  settlement of the T. Randal
Productions lawsuit, which is in addition to the $677,000 which had been accrued
at December 31, 1998.

ACQUISITION  RELATED  COSTS,  INCLUDING  AMORTIZATION  OF GOODWILL AND PURCHASED
INTANGIBLES. These costs consist of amortization of goodwill and other purchased
intangibles  and certain  acquisition  related  charges related to the Company's
third quarter  acquisition of BabyData.com  Inc. The Company expects these costs
to increase in the fourth quarter of 1999 because the Company will record a full
quarter of amortization  expense.  It is possible that the Company will continue
to expand its  business  through  acquisitions,  which would  cause  acquisition
related costs to increase in future quarters.

STOCK-BASED  COMPENSATION.  Stock-based compensation is principally comprised of
the portion of  acquisition  related  consideration  which is  contingent on the
continued  tenure of a key  employee,  which must be  recorded  as  compensation
expense  under  generally  accepted  accounting   principles.   The  stock-based
compensation  is  related  to  the  Company's   third  quarter   acquisition  of
BabyData.com  Inc. The Company expects the stock-based  compensation  expense to
increase in the fourth  quarter of 1999 because the Company will amortize a full
quarter of deferred compensation.

INTEREST INCOME

The  increase  in  interest  income for the three and nine month  periods  ended
September 30, 1999 of $19,000, or 63%, and $193,000, or 230%, respectively, from
the same periods in 1998 is due to the interest earned on cash received from the
financings completed during the first and third quarters, of 1999.

OTHER INCOME

Other  income for the nine month  period  ended  September  30, 1998  includes a
$562,000 gain related to the collection of a previously  reserved receivable and
$1,000 of other income,  net of a $281,000  expense related to cable  television
licensing royalties.

INCOME TAXES

The Company has not recorded a current or deferred  provision for Federal income
taxes for the periods presented due to the history of losses incurred.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1999,  the Company had positive  working  capital of $9,634,000
compared  with negative  working  capital of $1,158,000 at December 31, 1998. At
September 30, 1999,  the Company had cash and cash  equivalents  of  $4,973,000.
During the first nine months of 1999,  total cash used by  operating  activities
was  $34,105,000,  which  was  principally  due to our net loss  for the  period
coupled with the increase in prepaid  marketing.  Investing  activities used net
cash of $736,000 for purchases of computer  equipment,  compared with  $300,000,
net of disposals,  during the first nine months of 1998 due to the growth in the
number of personnel.  Financing  activities provided cash of $37,695,000 through
the January  private  placement and September  public  offering of the Company's
common stock,  net of financing  costs,  $34,983,000;  the exercise of warrants,
$1,586,000; and the exercise of stock options, $1,126,000.

The Company  believes that its cash and cash  equivalents  will be sufficient to
fund its operations through December 31, 1999. The Company expects a significant
use of cash  during  the  balance  of 1999 and the year 2000 as it  markets  and
expands the onhealth.com Web site. Any material  unforeseen increase in expenses
or  reductions  in projected  revenues  will likely  require the Company to seek
additional debt or equity financing.  If additional  funding is not available to
the Company on economically  reasonable terms the Company may need to reduce its
expenditures  or curtail  certain  operations.  There can be no  assurance  that
additional  capital,  on a debt or equity basis, will be found, or if found that
it will be on economically reasonable terms.

YEAR 2000

The Year 2000  issue is the  potential  for system and  processing  failures  of
date-related data and the result of computer-controlled systems using two digits
rather than four to define the applicable year. For example,  computer  programs
that have  time-sensitive  software may  recognize a date using "00" as the year
1900  rather  than the year  2000.  This  could  result  in  system  failure  or
miscalculations  causing  disruptions  of  operations,  including,  among  other
things, a temporary inability to process  transactions,  send invoices or engage
in similar normal business activities.

We could be affected by Year 2000 issues  related to  non-compliant  information
technology ("IT") systems or non-IT systems that we operate or that are operated
by third parties. We have substantially completed assessment of our internal and
external  (third-party)  IT  systems  and non-IT  systems.  At this point in our
assessment,  we are not currently  aware of any Year 2000  problems  relating to
systems we  operate  or that are  operated  by third  parties  that would have a
material effect on our business,  results of operations or financial  condition,
without  taking into  account our efforts to avoid such  problems.  Based on our

                                       10
<PAGE>

assessment to date, we do not anticipate that costs  associated with remediating
our  non-compliant  IT systems or non-IT  systems to exceed  $100,000,  although
there  can be no  assurance  to such  effect,  and any such  cost will be funded
through  operating  cash flows.  To date the Company has incurred no significant
costs related to the assessment of, and preliminary  efforts in connection with,
its Year 2000 project and the development of a remediation plan. Management does
not currently expect the Company's  financial condition or results of operations
will be materially  adversely  affected by the Year 2000 issue.  There can be no
guarantee  that the systems of other  companies on which the  Company's  systems
rely will be timely converted,  or that a failure to convert by another company,
or a conversion that is incompatible with the Company's systems,  would not have
a material adverse effect on the Company.


To  the  extent  that  our  assessment  is  finalized  without  identifying  any
additional material  non-compliant IT systems we operate or that are operated by
third  parties,  the most  reasonably  likely worst case Year 2000 scenario is a
systemic failure beyond our control,  such as a prolonged  telecommunications or
electrical failure. Such a failure could prevent us from operating our business,
prevent users from accessing our Web site, or change the behavior of advertising
customers  or  persons  accessing  our Web site.  We  believe  that the  primary
business risks, in the event of such failure,  would include, but not be limited
to, lost advertising  revenues,  increased operating costs, loss of customers or
persons  accessing our Web site, or other business  interruptions  of a material
nature,  as well as claims  of  mismanagement,  misrepresentation,  or breach of
contract,  any of which could have a material  adverse  effect on our  business,
results of operations and financial condition.  We have not made any contingency
plans to address such risks.


FORWARD-LOOKING STATEMENTS

Statements  contained  herein that are not based on historical  fact,  including
without  limitation  statements  containing the words "believes," "may," "will,"
"estimate," "continue," "anticipates," "intends," "expects" and words of similar
import,  constitute  "forward-looking  statements"  within  the  meaning  of the
Private  Securities   Litigation  Reform  Act  of  1995.  Such   forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results,  events or developments to be materially different
from any future  results,  events or  developments  expressed or implied by such
forward-looking statements. Such factors include, among others, the following:

o        the  expectation  that the  Company  will see a growth in revenues  and
         positive  net income as a on-line  health network;
o        the ability to increase consumer awareness of the Company's Web site;
o        the ability to increase our advertising base,
o        technology changes and the continued acceptance of the Internet;
o        general economic and business conditions;
o        competition;
o        the ability to attract and retain qualified personnel;
o        liability and other claims asserted against the Company; and
o        and other factors referenced in the Company's filings with the
         Securities and Exchange Commission.

Given these uncertainties,  readers are cautioned not to place undue reliance on
such forward-looking  statements. The Company disclaims any obligation to update
any such factors or to publicly  announce the result of any  revisions to any of
the  forward-looking  statements  contained  herein to reflect  future  results,
events or developments.

Additional  information  on other risk factors  which could affect the Company's
financial  results are included in the  Company's  Annual  Report for the fiscal
year ended December 31, 1998 on Form 10-K, as amended, and other Company reports
and statements on file with the Securities and Exchange Commission.

                                       11
<PAGE>


                                     PART II
                                OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

In June 1999, Jon Fisse, the Company's newly named Chief Operating Officer, left
the Company  before the Company and Mr. Fisse were able to agree on the terms of
his  employment  agreement.  In June  1999,  the  Company  filed  a  declaratory
judgement action in the United States District Court for the Western District of
Washington  seeking to declare that Mr. Fisse terminated his employment and that
the Company owes him no future  remuneration  or stock option  benefits.  On the
same day, Mr. Fisse filed a lawsuit in the United States  District Court for the
Southern District of New York, asserting that the Company violated his rights in
connection  with his separation from the Company,  seeking damages which,  among
other things,  include  severance  compensation and stock option  benefits.  The
action filed in Washington has been  transferred to New York.  Answers have been
filed in both cases and the parties are in the  discovery  stage of  litigation.
The  Company  believes  it  has  valid  defenses  against  Mr.  Fisse's  claims.
Nevertheless,  the outcome of the lawsuit may have a material  adverse affect on
the Company's financial position and results of operations.

In October 1999, the Company  received a subpoena duces tecum by the Division of
Enforcement,  Pacific Regional Office of the Securities and Exchange  Commission
("SEC") requesting certain documents from the Company pursuant to a formal order
of private  investigation  in connection  with possible  federal  securities law
violations.  The Company intends to cooperate fully with the request.  As stated
by the SEC in the letter accompanying the subpoena, "[t]he investigation and the
subpoena do not mean that we have  concluded  that you or anyone else has broken
the law. Also, the  investigation  does not mean that we have a negative opinion
of any  person,  entity  or  security".  Because  the  proceedings  are in their
preliminary  stages, the Company is unable to establish the likelihood or impact
of an unfavorable outcome.  However, the Company does not currently believe that
an  unfavorable  outcome would have a material  adverse  impact on the Company's
financial condition, results of operations or historical financial statements.


ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibit Listing.

                  Certain   exhibits  have  been   previously   filed  with  the
Commission and are incorporated herein by reference.


                            ONHEALTH NETWORK COMPANY
                                  EXHIBIT INDEX
                               SEPTEMBER 30, 1999
<TABLE>
<CAPTION>

   Exhibit
   NUMBER                                              DESCRIPTION                                             REF.
  --------     --------------------------------------------------------------------------------------------    ----
    <S>        <C>                                                                                             <C>
     2.1       Agreement and Plan of Reorganization among OnHealth Network Company, BabyData.com Inc., BB
                   Acquisition, Inc. and the stockholders of BabyData.com Inc. dated as of September 9,
                   1999.                                                                                       (M)
     3.1       Amended and Restated Articles of Incorporation of the Company.                                  (L)
     3.2       Bylaws of the Company.                                                                          (A)
     4.1       Form of Stock Certificate.                                                                      (B)
    10.1       License Agreement, dated April 24, 1991, among the Company, William Morrow Company and Mayo
                   Foundation for Medical Education and Research, as amended.                                  (B)
    10.2       Electronic Publishing License, Development and Marketing Agreement, dated April 28, 1993,
                   between the Company and Mayo Foundation for Medical Education and Research.                 (B)
    10.3       401(k) Savings and Investment Plan.                                                             (B)
    10.4       1997 Stock Option Plan, as amended.                                                             (C)
    10.5       IVI Publishing, Inc. Director Stock Option Plan, as amended.                                    (D)
    10.6       License Agreement, dated February 9, 1994, between the Company and Time Life, Inc. and
                   First Amendment to Titles Development Agreement, dated as of February 9, 1994 between
                   the Company and Time Life, Inc.                                                             (D)
    10.7       Lease Agreement, dated March 30, 1994, between the Company and Ryan/Wilson Limited
                   Partnership.                                                                                (D)
    10.8       License, Development and Marketing Agreement, dated September 28, 1994, between the Company
                   and Time Life, Inc.*                                                                        (E)

                                       12
<PAGE>

    10.9       1994 License, Development and Marketing Agreement, dated September 27, 1994, between the
                   Company and Mayo Foundation for Medical Education and Research.*                            (E)
    10.10      License Agreement, dated November 10, 1994, between  the Company and Massachusetts Medical
                   Society.*                                                                                   (E)
    10.11      Sublicense Agreement, dated December 31, 1994, between the Company and Georg von
                   Holtzbrinck GmbH & Co.*                                                                     (E)
    10.12      Agreement between America's Health Network, Inc. and the Company, dated May 25, 1995.*          (F)
    10.13      Amendment No. 2 to License Agreement among William Morrow Company, Mayo Foundation for
                   Medical Education and Research and the Company, dated December 29, 1995.*                   (F)
    10.14      Financial  Advisor and  Consulting  Agreement  with Frazier &
                   Company  LP,  dated  July 14,  1994,  as  amended by a letter
                   agreement, dated June 28, 1995.**                                                           (G)
    10.15      First Amendment dated June, 27, 1994 and Second Amendment dated October 10, 1995 to Lease
                   Agreement between the Company and Ryan/Wilson Limited Partnership.                          (G)
    10.16      Agreement dated April 1995 among Ryan/Wilson Limited Partnership, Wilson Learning
                   Corporation the Company regarding a certain lease.                                          (G)
    10.17      Distribution on Consignment Agreement, dated February 29, 1996 between the Company and
                   Davidson & Associates, Inc.*                                                                (F)
    10.22      Sublease Agreement, dated September 17, 1996, between the Company and Reality Interactive,
                   Inc. for the fourth floor portion of the Main Lease between the Company and Ryan/Wilson
                   Limited Partnership, Wilson Learning Corporation.                                           (H)
    10.24      Settlement Agreement and Mutual Release dated September 12, 1997 between the Company and
                   Mayo Foundation for Medical Education and Research.                                         (I)
    10.25      Sublicense Agreement dated September 12, 1997 between the Company and Mayo Foundation for
                   Medical Education and Research.                                                             (I)
    10.26      Letter Agreement dated November 9, 1997 between the Company and Robert
                   Goodman.** (J) 10.28 Subscription  Agreement,  dated January 29, 1999, among
                   the Company and certain investors named therein                                             (K)
     27        Financial Data Schedule (electronic version only)
-------------
<FN>

     (A)       Incorporated  herein by reference to the  Company's  Registration
               Statement on Form S-3, No.  333-69989,  filed with the Securities
               and Exchange Commission on December 31, 1998.
     (B)       Incorporated  herein by reference to the  Company's  Registration
               Statement on Form S-1, No. 33-67064,  (file number 0-22212) filed
               with the Securities and Exchange Commission in 1993.
     (C)       Incorporated  herein by  reference to the  Company's  Preliminary
               Proxy Statement for the Annual Meeting of Shareholders  held June
               16, 1998 on Form PRE 14A,  filed with the Securities and Exchange
               Commission on May 6, 1998.
     (D)       Incorporated  herein by reference to the  Company's  Registration
               Statement on Form S-1, No.  33-76496,  filed with the  Securities
               and Exchange Commission in 1994.
     (E)       Incorporated by reference to the Company's Form 10-K for the year
               ended  December 31, 1994,  filed with the Securities and Exchange
               Commission.
     (F)       Incorporated  by reference to Exhibit 10.14 to the Company's Form
               10-K/A  for the year  ended  December  31,  1995  filed  with the
               Securities and Exchange Commission on October 4, 1996.
     (G)       Incorporated  by reference to Exhibit 10.19 to the Company's Form
               10-K  for the  year  ended  December  31,  1995  filed  with  the
               Securities and Exchange Commission .
     (H)       Incorporated  herein by reference to the Company's  Form 10-K for
               the year ended  December 31, 1996,  filed with the Securities and
               Exchange Commission on March 28, 1997.
     (I)       Incorporated herein by reference to Exhibit 10.1 to the Company's
               Form 10-Q for the quarter ended September 30, 1997 filed with the
               Securities and Exchange Commission on November 12, 1997.
     (J)       Incorporated  herein by reference to the Company's  Form 10-K for
               the year ended  December 31, 1997,  filed with the Securities and
               Exchange Commission on April 15, 1998.
     (K)       Incorporated by reference to the Company's Form 10-K for the year
               ended  December 31, 1998,  filed with the Securities and Exchange
               Commission on March 31, 1999.

                                       13
<PAGE>

     (L)       Incorporated  herein by reference to the  Company's  Registration
               Statement on Form S-3, No.  333-81321,  filed with the Securities
               and Exchange Commission on June 22, 1999.
     (M)       Incorporated  herein by reference to the Company's Report on Form
               8-K,  filed  with  the  Securities  and  Exchange  Commission  on
               September 15, 1999.

*        Portions of the Exhibit  have been  omitted  pursuant to the  Company's
         request for confidential  treatment  pursuant to Rule 24b-2 promulgated
         under the Securities Act of 1933, as amended.

**       Management Agreement or Compensatory Plan or Arrangement

</FN>
</TABLE>


         (b)      Reports on Form 8-K.

                  In a report filed on Form 8-K,  dated  September 15, 1999, the
Company announced the acquisition of BabyData.com.


                                       14
<PAGE>


                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this Report to be signed on its behalf by the
undersigned,  thereunto duly authorized, in Seattle, Washington, on the 11th day
of November, 1999.



                                              ONHEALTH NETWORK COMPANY

                                               By:  /S/ RON STEVENS
                                               ------------------------------
                                                    Ron Stevens
                                                    Chief Financial Officer
                                       15