UNITED STATES 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 Year Ended December 31, 1999

                                       OR

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

                         Commission File Number 0-28252

                                BROADVISION, INC.
             (Exact name of registrant as specified in its charter)

               Delaware                                94-3184303
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)

 585 Broadway, Redwood City, California                   94063
   (Address of principal executive offices)            (Zip Code)

                                 (650) 261-5100
               Registrant's telephone number, including area code

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

    Title of each class                  Name of each exchange which registered
          None                                             None

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

                         Common Stock, $.0001 par value
                         ------------------------------
                                (Title of Class)

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

Indicate by check mark if the 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  the  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. [ ]

Based on the closing sales price of March 24, 2000 the aggregate market value of
the voting stock held by nonaffiliates of the registrant was $16,841,974,970.

As of March 24, 2000,  registrant had outstanding  248,359,090  shares of Common
Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

Parts  of  the  Proxy  Statement  for   Registrant's   1999  Annual  Meeting  of
Stockholders  to be held May 31, 2000 are  incorporated by reference in Part III
of this Form 10-K Report.

                                       1

<PAGE>

<TABLE>


                                               BROADVISION, INC.

                                          ANNUAL REPORT ON FORM 10-K
                                         YEAR ENDED DECEMBER 31, 1999

                                               TABLE OF CONTENTS
<CAPTION>

                                                                                                            Page No.
                                                                                                            --------
<S>                                                                                                           <C>
Part I

Item 1. Business-----------------------------------------------------------------------------------------------3

Item 2. Properties--------------------------------------------------------------------------------------------19

Item 3. Legal Proceedings-------------------------------------------------------------------------------------20

Item 4. Submission of Matters to a Vote of Security Holders---------------------------------------------------20

Part II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters---------------------------------20

Item 6. Selected Consolidated Financial Data------------------------------------------------------------------21

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-----------------22

Item 7A. Quantitative and Qualitative Disclosure About Market Risk--------------------------------------------37

Item 8. Financial Statements and Supplementary Data-----------------------------------------------------------38

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure------------------55

Part III

Item 10. Directors and Executive Officers of the Registrant---------------------------------------------------56

Item 11. Executive Compensation-------------------------------------------------------------------------------56

Item 12. Security Ownership of Certain Beneficial Owners and Management---------------------------------------56

Item 13. Certain Relationships and Related Transactions-------------------------------------------------------56

Part IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K-------------------------------------56

SIGNATURES----------------------------------------------------------------------------------------------------57
</TABLE>

                                                     2
<PAGE>



                                     PART I.

ITEM 1. BUSINESS
<TABLE>

   The following  discussion of the Company's business contains  forward-looking
statements that involve risks and  uncertainties.  The Company's  actual results
could  differ  materially  from  those  anticipated  in  these   forward-looking
statements as a result of certain factors,  including, but not limited to, those
set forth under "Risk Factors" and elsewhere in this Form 10-K.

<CAPTION>
<S>                                                                                          <C>
       Overview and Industry Background.......................................................3

       The BroadVision Solution...............................................................6

       BroadVision Business Strategies........................................................6
         Extend and Expand our Leadership in Business-to-Consumer E-Commerce..................6
         Become a Recognized Leader in Business-to-Business E-Commerce........................7
         Develop New and Enhance Existing Targeted Application Solutions......................7
         Enhance our Service and Support Infrastructure.......................................7
         Expand and Leverage Alliances with Key Business Partners.............................7
         Support Diverse Customer Business Models.............................................8
         Grow Our International Presence......................................................8

       BroadVision Products...................................................................8
         BroadVision One-To-One Packaged Applications.........................................9
         BroadVision One-To-One Business Tools...............................................10
         Other Products......................................................................11
         Product Development.................................................................11

       BroadVision Worldwide Professional Services...........................................12
         Strategic Services..................................................................12
         Interactive Services................................................................12
         Content and Creative Services.......................................................12
         Technical Support Services..........................................................12
         Education Services..................................................................12
         BroadVision University..............................................................12

       Strategic Alliances...................................................................13

       Customers and Markets.................................................................13

       Competition...........................................................................15

       Technology............................................................................16

       Adherence to Industry Standards.......................................................16

       Intellectual Property and Other Proprietary Rights....................................18

       Employees.............................................................................18
         Executive officers..................................................................18

</TABLE>

Overview and Industry Background

   We  develop,   market  and  support   application   software  solutions  that
personalize  e-business.  These solutions enable e-businesses to use the web and
an  expanding  array of  wireless  devices as  platforms  to conduct  electronic
commerce,  offer online  customer  self-service  and support,  deliver  targeted
information  and provide  financial  services such as online  billing,  consumer
banking and brokerage. These capabilities can be provided to all constituents of
the extended enterprise,  including customers, suppliers, partners, distributors
and employees.



                                       3
<PAGE>

   The BroadVision One-To-One(TM) applications suite allows businesses to tailor
Web and  wireless  content to the needs and  interests  of  individual  users by
personalizing content and transactions on a real-time basis.

   Our  applications  interactively  capture Web and  wireless  visitor  profile
information,  organize the enterprise's content, dynamically target that content
to each visitor based on easily  constructed  business rules,  deliver  stylized
content to the  specified  device,  and  execute  transactions.  We believe  the
benefits  of  these   personalized   applications   include  enhanced   customer
satisfaction and loyalty,  increased  business volume,  greater brand awareness,
reduced  costs to service  customers  and  execute  transactions,  and  enhanced
employee productivity.

<TABLE>
   BroadVision  One-To-One  applications  are used  throughout  the  world.  For
example, over 50 financial  institutions in 25 countries use our applications to
personalize financial transactions with their customers.
<CAPTION>

        ---------------------------------------------------------------------------------------
           Countries Where BroadVision One-To-One Financial is Deployed
        ---------------------------------------------------------------------------------------
         <S>              <C>                 <C>           <C>                 <C>
           Andorra           Czech            Israel        Luxembourg          Sweden
                               Republic
        ----------------- ---------------- ------------- ------------------- ------------------
           Austria           England          Italy         Malaysia            Switzerland
        ----------------- ---------------- ------------- ------------------- ------------------
           Belgium           Estonia          Japan         The Netherlands     Taiwan
        ----------------- ---------------- ------------- ------------------- ------------------
           Canada            France           Korea         Singapore           Turkey
        ----------------- ---------------- ------------- ------------------- ------------------
           China             Germany          Kuwait        Spain               United States
        ----------------- ---------------- ------------- ------------------- ------------------
</TABLE>
<TABLE>

   Six of the  largest  Fortune  500  retailers  in the  United  States  use our
applications for e-business.
<CAPTION>

          -------------------------------- ------------------------- ------------------
             Retailer                         Fortune 500 Ranking       1999 Revenues
          -------------------------------- ------------------------- ------------------
             <S>                              <C>                       <C>
             Wal-Mart Stores                  3                         $139 billion
          -------------------------------- ------------------------- ------------------
             Sears Roebuck & Co.              15                        $41 billion
          -------------------------------- ------------------------- ------------------
             The Home Depot                   32                        $30 billion
          -------------------------------- ------------------------- ------------------
             Federated Stores (Fingerhut)     95                        $15 billion
          -------------------------------- ------------------------- ------------------
             Circuit City                     182                       $10 billion
          -------------------------------- ------------------------- ------------------
             Office Max                       358                       $5 billion
          -------------------------------- ------------------------- ------------------
</TABLE>

   In addition to traditional  brick-and-mortar  retailers using  BroadVision as
their business-to-consumer e-commerce solution, over 140 companies worldwide use
BroadVision  applications to customize  interactions  and  transactions  between
themselves  and their  suppliers  in a  business-to-business  environment  or to
create online  marketplaces  where multiple buyers and vendors purchase and sell
goods and services. Among our retail and business-to-business commerce customers
are over 70 recently  formed "dot com" companies who have chosen to deploy their
e-businesses  using  BroadVision.  We believe that our  customers,  particularly
those in Europe, are at the leading edge of deploying  applications that display
content   and  conduct   transactions   on   wireless   devices.   Additionally,
information-intensive  businesses have found our  applications to be well-suited
for employee  intranet  sites,  where  enterprise  information  is  centralized,
personalized and delivered.

Personalizing Web and Wireless Interactions and Transactions

   The Web has changed  the nature of business  operations  and  competition  by
creating more efficient marketplaces. Since information is now much more readily
available,  companies and their customers,  suppliers,  partners,  distributors,
employees  and  other  constituents,  have the  means to  instantaneously  share
information, automate business processes and conduct business on a global scale.

   However,  the sheer volume of  information,  combined with the  constituents'
ability to change vendors at the click of a button on a mouse,  has led directly
to the need for differentiation. Personalization through one-to-one relationship
management has become the solution. In the past,  personalization of products or
services was often  inefficient and expensive for companies which had to rely on
inefficient  mass marketing or a costly,  direct sales



                                       4
<PAGE>

model.  Moving  from these  channels  to  efficient  and  economical  one-to-one
relationship management became possible with the advent of the Web.

   With the  appropriate  applications  in place,  companies  could react to the
informational  and  self-service  needs of  individual  customers,  partners and
employees  in real  time.  More  specifically,  when  the Web was  coupled  with
personalized e-business  applications,  business managers were given the ability
to capture visitor profile information, observations and feedback interactively,
and to use  rule-driven  tools to target,  in real time,  useful  information to
visitors based on this data. One-to-one relationship management allows a company
to use its knowledge of its customers,  suppliers,  partners,  distributors  and
employees to personalize interactions and thus strengthen relationships,  foster
loyalty, and create and sustain competitive advantage.  One-to-one  relationship
management  provides  the  foundation  for  delivering   individually   tailored
products, services, information,  incentives and transactions.  Whether a Web or
wireless  application is designed primarily for conducting commerce or providing
customer   self-service,   it  offers   businesses  an   opportunity  to  extend
front-office  services or deliver knowledge in a personalized and cost-effective
way to all  constituents  of the extended  enterprise.  In particular,  business
managers can use advanced technologies to engage in personalized  dialogues with
millions of customers, or with just one.

The Next Wave of Web and Wireless Technologies

   BroadVision  was one of the first companies to pioneer the  technologies  for
managing personalized customer relationships and high volume online transactions
on the Web. Our  scalable,  patented  technology  enabled  business  managers to
easily define business rules for managing highly complex business  processes and
displaying dynamic content in areas such as product and pricing data,  financial
policies,  promotions and advertising campaigns. We debuted tools that eased Web
site development,  introduced real-time control and management of Web sites, and
generated  page  logic.  Not  surprisingly,  new  technology  requirements  have
surfaced since we first introduced our BroadVision  One-To-One(TM)  applications
to market in 1995. With our proposed  acquisition of Interleaf,  we demonstrated
our  commitment  to  XML  for  creating,   publishing,   managing,  styling  and
re-purposing  electronic content. The acquisition of Interleaf will also provide
to us WAP and XSL  technologies  for styling and delivering  content to wireless
devices.  Our commitment to Java,  Enterprise  JavaBeans and J2EE is measured by
the signing of a significant  co-development and co-marketing agreement with Sun
Microsystems  in March  2000,  which will  result in a new family of  Java-based
BroadVision  applications.  And we are committed to helping  customers  leverage
their existing back- and front-office  applications  infrastructure  through the
availability  of  packaged   interfaces  to  a  growing  number  of  third-party
applications,  including  those from Siebel Systems and SAP, as  demonstrated by
agreements with both Siebel Systems and STC Technologies to develop interfaces.

The Ascendancy of Packaged Applications

   Packaged  applications  are a proven  alternative  to in-house or third-party
custom applications development.  The trend toward packaged solutions is typical
of business automation software, with the markets for accounting, manufacturing,
human  resources  and sales  force  automation  systems  dominated  by  packaged
applications.  Packaged  solutions  end a company's  dependence  on  home-grown,
custom-built systems, enabling them to increase the resources available for core
business  initiatives.  To realize  the  potential  of  one-to-one  relationship
management, packaged applications must support the following goals:

     o Attract,  retain and service  visitors  that range from the casual to the
       sophisticated  by providing  dynamic content,  interactive  dialogues and
       communities  of  interest  in a friendly,  easy-to-use  Web and  wireless
       environment;

     o Provide  non-technical  business  managers with the ability to define and
       modify the application's business rules and content in real time;

     o Develop and maintain visitor profiles,  observe and remember interactions
       and engage in ongoing personalized dialogues while empowering individuals
       to control the privacy of their personal data;

     o Dynamically  target  personalized  content,  products and  incentives  to
       correspond to profile data in order to motivate  visitors to interact and
       conduct transactions;

     o Integrate  and  interact  with back and  front  office  systems  to fully
       utilize a company's data and information  resources;

     o Fulfill  financial and information  transactions  with secure  electronic
       commerce  processes;  and

                                       5
<PAGE>

     o Offer a consistent end-user experience across multiple  constituent touch
       points such as wireless devices,  including cellular  telephones,  pagers
       and personal  digital  assistants,  or PDAs,  interactive  voice response
       systems and the traditional call center.

The BroadVision Solution

   We  offer  a  suite  of  packaged  applications  and  related  services  that
personalize e-businesses.  The BroadVision One-To-One applications suite enables
companies to capitalize on the Web (internet,  intranet and extranet  sites) and
wireless devices for selling,  marketing and servicing the constituents of their
extended enterprise: customers, suppliers, partners, distributors, employees and
others.  Our products enable businesses to organize dynamic profiles of Web site
and wireless users from volunteered data and observed  behavior,  deliver highly
specialized   content  in  response  to  these  profiles  and  securely  execute
transactions. Business managers are able to modify business rules and content in
real time,  offering a personalized  experience to each visitor.  Because of the
open  architecture  of our  applications,  they are easily  integrated  with our
customers'  existing  systems and easily  expanded as our  customers'  needs and
businesses grow.

   Surrounding this applications suite is an e-business  "ecosystem"  created by
over 200  partner  firms  around  the world who ensure  our  customers'  success
through  complementary  technology,  applications,  tools and services offerings
that can be used to extend and enhance a BroadVision environment.

   We believe our  products  enhance our  customers'  revenue  opportunities  by
enabling them to build long-term  relationships.  Web and wireless  visitors are
engaged by highly  personalized  real-time  interactions,  are able to  transact
business  securely,  and are  encouraged  to remain  online  and to make  return
visits.  Our  applications  also improve the  cost-effectiveness  of  one-to-one
relationship  management by enabling  non-technical  managers to modify business
rules and  content  in real time and by  helping  to  reduce  costs of  customer
acquisition  and  retention,  business  development  and technical  support.  In
addition,  the packaged solution nature of our products decreases our customers'
time to  market  and  allows  them to easily  manage  and  expand  their Web and
wireless  application  deployments  in a  cost-effective  manner.  Our  targeted
applications,  BroadVision  One-To-One Retail Commerce,  BroadVision  One-To-One
Business Commerce,  BroadVision  One-To-One  Financial,  BroadVision  One-To-One
Billing and  BroadVision  One-To-One  Knowledge,  have the specific  benefits of
addressing  personalization  needs in the areas of Web  commerce,  Web financial
services,   online  billing,   and  corporate   information   distribution   and
development.

BroadVision Business Strategies

   Our objective is to become the leading  provider of  personalized  e-business
applications  worldwide. In order to achieve that objective, we have adopted the
following key elements of our strategy:

   Extend and Expand our  Leadership  in  Business-to-Consumer  E-Commerce.  The
BroadVision  One-To-One  Retail Commerce and Financial  applications  are widely
used for conducting  retail and financial  commerce on the Web. The  BroadVision
One-To-One Retail Commerce  application enjoys 24% market share (ABN AMRO, 1998)
and is  used by six of the  largest  Fortune  500  U.S.  retailers.  BroadVision
One-To-One  Financial is used by over 50 banks in 25 countries  around the world
to automate and personalize consumer banking and brokerage transactions.

   These  applications   enable  our  customers  to  manage   relationships  and
transactions with consumers over the Web and wireless devices. We have witnessed
the growth of  one-to-one  relationship  management  that allows  businesses  to
capitalize  more fully on the Web and  wireless  devices as business  venues for
interacting  and transacting  with consumers.  We believe that we offer the most
complete solution  available today for one-to-one  relationship  management in a
business-to-consumer environment.

   We intend to maintain  our strong  position  and become the standard by which
other   business-to-consumer   e-commerce  applications  are  measured  by:

     o continuing to enhance our technology through heavy investment in research
       and development activities;

     o incorporating industry-leading components into our products;

                                       6
<PAGE>

     o partnering with leading technology and platform providers;

     o influencing  technology directions via membership on key standard-setting
       committees; and

     o employing  our  technology  and human  resources  as a source of  ongoing
       technological advantage.

   Become a Recognized Leader in Business-to-Business E-Commerce. We have nearly
150 customers  who have  deployed the  BroadVision  One-To-One  applications  to
manage relationships between their companies and their suppliers.  Some of these
companies in the business-to-business  arena are using our applications to build
"exchanges,"  where many sellers and many buyers come  together at a Web site to
buy and sell goods and  services.  We intend to expand our number of  customers,
partnerships  and  targeted  applications  for the growing  business-to-business
e-commerce market.

   Develop New and Enhance  Existing  Targeted  Application  Solutions.  We were
among the first companies to introduce  packaged Web applications for electronic
commerce,  financial services and knowledge management. We are now extending our
"best of breed"  applications  with new offerings we have  developed  ourselves,
co-developed with partners or licensed third parties to develop. These offerings
include BroadVision One-To-One Billing,  developed by BroadVision;  a one-to-one
business portal application co-funded and co-developed with Hewlett-Packard that
is  shipping  in year  2000;  and a new  family  of  vertical  applications  for
industries  ranging from automotive to travel that will ship in year 2000. These
vertical applications are developed in conjunction with large system integration
firms  partnered  with  technology  vendors;  together,  we possess the industry
domain knowledge necessary for the creation of these specialized applications.

   We will  continue  to  enhance  the core  BroadVision  One-To-One  Enterprise
relationship management system that underlies each of our application solutions.
We intend to apply the  experience  gained  from  each  customer  engagement  to
enhance our  applications  and services.  Our plan is to host ongoing  Technical
Advisory  Councils  with leading  customers  and partners to  incorporate  their
feedback  into  product  planning.  We will  continue to utilize  our  expanding
libraries of reusable application objects and templates.

   Enhance our Service and Support  Infrastructure.  Our Worldwide  Professional
Services  Organization  provides a broad range of consulting services in support
of  all  of  our  products.  This  organization  provides  business  application
expertise,  technical  know-how and product knowledge to complement our products
and to provide solutions that meet customer business requirements.  By using our
services,  customers  are able to build a  customized  application  solution  to
maximize the benefits of one-to-one relationship management.

   We are  committed  to  extending  the  service  offerings  and the  resources
available  to our  customers  and have  implemented  programs  such as an online
BroadVision University, train-the-trainer and third-party educational centers to
extend the breadth and depth of our services offerings.  We have also tiered our
technical  support  offerings to offer  standard,  enterprise  and  personalized
support programs for our customers.

   Expand and Leverage Alliances with Key Business  Partners.  To accelerate the
acceptance of our products,  we have developed the BroadVision  Partner Program.
The Partner Program is a  comprehensively  structured  partnership  relationship
designed to drive  effective  partner  alliances and ensure the success of these
relationships by jointly identifying and pursuing specific business  objectives.
The Partner Program operates within a framework of proactive  business planning,
revenue  targeting   initiatives,   structured  sales  enablement  and  enhanced
BroadVision  training  and sales  engineering  support.  The Partner  Program is
intended to help our  partners  successfully  develop,  promote,  and sell their
services and solutions in close  coordination with our newly expanded network of
sales engineering,  marketing and professional  consulting services. The Partner
Program assists our partners in growing their business by incorporating our core
competency,  personalizing  interactions and  transactions  with a wide range of
constituencies, into a focused execution matrix.

   We partner with leading systems integrators, Web technology vendors, creative
agencies,   application   solution   providers/ASPs,    value-added   resellers,
distributors  and  consultants.  These alliances  provide  additional  sales and
marketing  channels  for our  products,  enable us to more  rapidly  incorporate
additional  functions  and  platforms  into  our  products  and  facilitate  the
successful deployment of customer applications.

                                       7
<PAGE>

    We will continue to place an emphasis on establishing  additional  alliances
as new technologies and standards emerge, although we may be unable to establish
or maintain certain alliances.

   Support  Diverse  Customer   Business  Models.  We  intend  to  continue  our
commitment to flexibility  by offering our customers  choices for the deployment
of our applications. Customers can choose to deploy our applications using their
own in-house technical  resources or can engage with our Worldwide  Professional
Services  Organization to assist with implementation.  Customers can also choose
to work with a  BroadVision-trained  systems integrator or distribution partner,
or with a combination of our resources and a partner's.  Another option is for a
customer  to utilize  an ASP who hosts the  customer's  BroadVision  application
deployment at a remote  facility and is responsible  for its ongoing service and
support.

   Grow Our International Presence. To capitalize on the emergence of the Web as
a  global  network,  we  have  established,   and  continue  to  add,  worldwide
distribution  capabilities  with direct or  distributor  sales  personnel  in 35
cities   and  23   countries   worldwide.   Our   reseller   relationship   with
Hewlett-Packard  has made our suite of products available in over 120 countries.
We intend to continue to certify  providers  of  professional  services  for our
products in countries where there is customer demand.

   Our partners include multinational  systems integrators,  as well as partners
with a single-country scope of operations.  Our product architecture is designed
to support  multiple  languages,  multiple  currencies  and remote,  distributed
publishing. We currently have available for shipping versions of our BroadVision
One-To-One  Enterprise product that support the display of content and interface
in Arabic, Chinese, Hebrew,  Japanese,  Korean, Slovakian and Turkish as well as
most Western European languages.

   Our strategies  involve  substantial risks. We may be unable to implement our
strategies and our strategies,  even if implemented,  may not lead to successful
achievement  of our  objectives.  If we are unable to implement  our  strategies
effectively, our business may be harmed.

<TABLE>
BroadVision Products

   We  offer  a  suite  of  personalized   e-business  applications  focused  on
empowering  business-to-business  and  business-to-consumer  companies  to build
relationships and sell online.

<CAPTION>
     Product Category and Name                            Description
     -------------------------                            -----------
<S>                                                     <C>
    Application Foundation:

      BroadVision One-To-One Enterprise                 The core product.  BroadVision One-To-One Enterprise provides the foundation
                                                        for rapid development and real-time  operation of large-scale,  personalized
                                                        e-business  applications.   Each  of  the  following  targeted  applications
                                                        includes  and  leverages  the   functionality   of  BroadVision   One-To-One
                                                        Enterprise.

    Targeted Applications:

      BroadVision One-To-One Retail Commerce            Packaged application for consumer e-commerce and merchandising.

      BroadVision One-To-One Business Commerce          Packaged application for  business-to-business  relationship  management and
                                                        channel automation.

      BroadVision One-To-One Financial                  Packaged  application for rapid creation of personalized  consumer financial
                                                        services sites.

      BroadVision  One-To-One   Knowledge               Packaged  application  for  intranet and  extranet  information  sharing and
                                                        collaboration.

      BroadVision  One-To-One  Billing                  Packaged application for online bill presentment and payment.

                                                                 8
<PAGE>

   Product Name                                        Product Description
   ------------                                        -------------------

 BroadVision One-To-One Business Tools:

    BroadVision  One-To-One  Design Center              An  authoring  tool that allows Web  designers  to quickly and easily  build
                                                        dynamic Web page templates.

    BroadVision  One-To-One  Command Center             A  point-and-click  tool that allows users to quickly write rules that match
                                                        users with content whether they are anonymous or registered.

    BroadVision  One-To-One Publishing Center           A powerful tool for setting content  publishing  rights,  creating  approval
                                                        workflow and empowering distributed publishing.

    BroadVision One-To-One Instant Publisher            An intuitive tool that allows casual content  developers to publish  content
                                                        using a Web browser.
</TABLE>

BroadVision One-To-One Packaged Applications

   We  offer a suite of five  integrated  applications,  BroadVision  One-To-One
Retail  Commerce,   BroadVision   One-To-One   Business  Commerce,   BroadVision
One-To-One Financial,  BroadVision One-To-One Billing and BroadVision One-To-One
Knowledge,  which are built on top of  BroadVision  One-To-One  Enterprise,  the
application  system  that  serves  as  the  functional  core  of  each  targeted
application. These applications are designed to integrate the e-business channel
with a company's existing business  infrastructure,  providing a consistent view
of the customer and delivering an experience optimized for that customer.

   BroadVision One-To-One Enterprise.  As the application system on top of which
BroadVision One-To-One  applications are built, One-To-One Enterprise provides a
secure and flexible,  standards-based  architecture  that supports  large volume
transactions,  large scale catalogs, distributed content management,  enterprise
system  integration and dynamic  personalization.  It is based on open standards
such as CORBA, Java, XML and Javascript.

   BroadVision  One-To-One  Retail  Commerce.  One-To-One  Retail  Commerce is a
highly scalable,  retail-focused  application used by Fortune 500 retailers such
as Sears  Roebuck  and The Home  Depot and by "dot  coms"  such as  Mercata  and
Pets.com.  It has  strong  and  comprehensive  packaged  functionality  such  as
shopping cart, shopping list, search, custom pricing,  incentives,  advertising,
communities,   targeted  marketing  through  Web,  email  and  wireless  content
distribution,  tax calculation,  payment integration and more. It allows dot com
and  traditional  retailers  to target  anonymous  users on their first visit to
increase the ratio of those who visit a site to those who purchase  from a site,
and it enables targeted promotions designed to increase "share" of customer.

   BroadVision  One-To-One  Business  Commerce.   One-To-One  Business  Commerce
facilitates  online trade between business  partners whether they are merchants,
resellers,  distributors  or  manufacturers.  Features  such as quotes,  search,
persistent requisition,  contract pricing,  purchasing list and contract pricing
allow  businesses to automate their channel  relationships,  reducing order time
and errors.  Large-scale  business-to-business  sellers  such as W.W.  Grainger,
General  Electric and Toshiba use BroadVision  One-To-One  Business  Commerce to
create e-businesses that integrate with structured back-end business system.

   BroadVision One-To-One Financial. This financial services application enables
banks,  brokerages,  mutual fund companies and other  financial  institutions to
enable their online  customers to perform a complete set of secure  transactions
within and between accounts. BroadVision One-To-One Financial provides financial
institutions with the ability to deploy quickly  customer-centric Web sites that
offer  customized  interactions,  thereby  enabling a financial  institution  to
differentiate itself by enhancing the customer relationship.



                                        9
<PAGE>

   BroadVision  One-To-One  Knowledge.  One-To-One Knowledge is an intranet- and
extranet-focused application that allows employees and partners to easily access
and share information no matter where they are. A strong,  secure infrastructure
allows  users to see only the content  that they are  entitled to see. It allows
administrators  to finely tune publishing  rights on a group or individual basis
so that specific  users can be restricted to publishing in specific areas of the
site.  Comprehensive  workflow allows  administrators to see changes before they
are actually published.

   BroadVision  One-To-One  Billing.  One-To-One  Billing brings electronic bill
payment and delivery  capabilities  to e-commerce  and  marketing Web sites.  It
enables  companies that want to personalize  interactions  with customers during
their ongoing  billing  cycles to streamline  routine  billing  practices  while
gaining knowledge of their customers' needs, preferences,  and buying activities
using the Web.  The  application  is  designed  for use by direct and  aggregate
billers.

Key Capabilities of Our Applications

   We  designed  all of  the  BroadVision  One-To-One  applications  for  use in
mission-critical,  high-performance  environments  by companies  with  demanding
architecture,   deployment  and  maintenance  requirements.   Some  of  the  key
capabilities of the applications include:

      Ease of use -- tools  designed with  graphical  user  interfaces  allowing
    non-technical business managers to modify business rules and content in real
    time.

      Scalability -- robust embedded  application  server  functionality  allows
    BroadVision  One-To-One  applications to support large numbers of concurrent
    customers and transactions.

      Flexible  integration -- a  comprehensive  set of APIs allows  integration
    with a variety of legacy business  systems such as SAP and  Peoplesoft,  and
    custom mainframe systems

      Open  standards-based  architecture --  object-oriented  application  code
    written in C++, Java and JavaScript allows developers and system integrators
    to use,  integrate,  modify,  adapt or extend the applications  with minimal
    impact  on other  areas to  create a rapidly  customized  product  that meet
    specific  business   requirements.   Support  for  the  CORBA  standard  for
    object-oriented  computing  permits  distribution of the application  across
    multiple processors.  This design enables high-volume performance,  flexible
    application deployment and easy integration with other third-party or legacy
    applications.

      Secure  transaction  processing  --  secure  handling  of a wide  range of
    commerce and  financial  services  transactions  includes  order pricing and
    discount/incentive handling, tax computation, shipping and handling charges,
    payment  authorization,  credit card  processing,  order tracking,  news and
    stock feeds through a combination of built-in  functionality and integration
    with other products.

      Multi- platform availability -- BroadVision  One-To-One Enterprise and its
    associated  applications  are available on a variety of platforms  including
    Sun Solaris,  Microsoft Windows NT and  Hewlett-Packard's  HP-UX.  Supported
    databases include Oracle, Sybase, Informix and Microsoft SQL Server.

      Multi-Lingual/Multi-Currency   --  availability  of  content  display  and
    interface in Arabic, Chinese, Hebrew, Japanese,  Korean, Slovakian,  Turkish
    and  most  Western  European  languages  and  support  for a wide  range  of
    currencies, including the Euro, enable worldwide use of our applications.

BroadVision One-To-One Business Tools

   Our  applications  are  customized  and managed using tools that are licensed
separately  from  the  applications.   Inherent  to  the  functionality  of  our
applications is a set of building blocks  comprised of customizable  components,



                                       10
<PAGE>

application  templates and business rules implemented and managed by these tools
that  are  instrumental  to  rapidly  build  and  easily  maintain   BroadVision
One-To-One applications. A description of our tools products is as follows:

   BroadVision   One-To-One   Design  Center.   Based  on  the   Macromedia(R)'s
Dreamweaver  2 Web  authoring  tool,  the  One-To-One  Design  Center allows Web
authors and Web application  developers  faster time to market by shortening the
development  cycle.  This  tool  gives Web  authors  direct  access to  powerful
personalization  and  functional  components  through  a series  of  Dreamweaver
wizards.  These wizards generate  server-side  JavaScript,  which is the primary
programming  language for our  applications.  By making  simple  point-and-click
choices,  the Web author can visually construct a complete,  dynamic application
without having to write HTML or JavaScript.

   BroadVision  One-To-One  Command  Center.  One-To-One  Command  Center allows
business  users to change  the way users are  matched  with  content  through an
intuitive  point-and-click  interface.  With this tool,  business  managers  can
create rules based on profile information, transaction history, session behavior
and  other  data.  They can also  develop  business  rules  that  evaluate  user
information gathered during previous  interactions and use it to target products
and services during  subsequent  interactions.  Rules allow business managers to
target users whether they are anonymous or  registered,  allowing  businesses to
increase their browse-to-buy ratio.

   BroadVision One-To-One Publishing Center. One-To-One Publishing Center allows
a distributed  and remote team of  non-technical  content experts to manage most
aspects of site content collaboratively,  including creating,  editing, staging,
producing and archiving.  This tool provides  personal and shared  in-boxes that
enable  teams of content  creators  to  collaborate  in  developing  content.  A
programming calendar facilitates staging, scheduling and coordination of content
publishing.  This  tool  provides  the  ability  to  preview  content  prior  to
publishing,   to  control   access  to   publishing   and  to  capture   content
classification  information.  It supports  content  created  with HTML  editors,
Microsoft Office products and Lotus Domino.

   BroadVision  One-To-One  Instant  Publisher.   One-To-One  Instant  Publisher
provides simple,  personalized  publishing  forms, so that employees can publish
content through a Web-based point-and-click interface. Because publishing rights
are tied to their login name and password,  publisher  profiles  remain the same
regardless of where users are physically located.

Other Products

    In addition to our products,  we have entered into agreements that enable us
to  resell  third-party  software  products  from  Bluegill,   Interwoven,  IONA
Technologies,  Interleaf,  Macromedia,  and Verity. These are sublicensed to end
users and either  incorporated  in or sold as options to our  products.  License
revenue from these  third-party  products was insignificant and constituted less
than 1% of total software  product license  revenues for each of the years ended
December 31, 1997 and 1998, and approximately 7% for the year ended December 31,
1999.

Product Development

   We believe  that our future  success will depend in large part on our ability
to enhance the BroadVision One-To-One  applications suite, develop new products,
maintain  technological  leadership  and satisfy an  evolving  range of customer
requirements  for  large-scale   interactive  online   relationship   management
applications.

   Our product development organization is responsible for product architecture,
core  technology,  product testing and quality  assurance,  writing product user
documentation  and expanding the ability of BroadVision  One-To-One  products to
operate  with  the  leading  hardware  platforms,  operating  systems,  database
management systems and key electronic commerce transaction processing standards.

   Since inception,  we have made substantial investments in product development
and related activities.  Certain  technologies have been acquired and integrated
into BroadVision One-To-One products through licensing arrangements.



                                       11
<PAGE>

   As of December 31, 1999, there were 119 employees in our product  development
organization.  Our research and  development  expenses  were $7.4 million in the
year ended  December 31, 1997,  $9.2 million in the year ended December 31, 1998
and $14.6 million in the year ended December 31, 1999.

   To date, we have not capitalized any software  development  costs as products
are  made  available  for  general  release  relatively  concurrently  with  the
establishment  of  technological  feasibility.  We expect to  continue to devote
substantial resources to our product development activities.

BroadVision Worldwide Professional Services

   Our Worldwide  Professional  Services  Organization provides a broad range of
consulting  services  in  support  of  all of our  products.  This  organization
provides  business  application   expertise,   technical  know-how  and  product
knowledge to complement our products and to provide solutions that meet customer
business  requirements.  By using our  services,  customers  are able to build a
customized   application   solution  to  maximize  the  benefits  of  one-to-one
relationship  management. A summary of the professional services that we provide
is as follows:

   Strategic  Services.  We provide business strategy and process  consulting to
assist customers in defining and planning  profitable online  businesses,  while
optimally utilizing the functionality of our products. Services include in-depth
needs  analysis,   customer   segmentation,   one-to-one   marketing  expertise,
storyboarding  and  business  organizational  planning  to  achieve  timely  and
successful   implementation  of  our  software   products.   Strategic  Services
consulting is generally offered on a time and materials basis.

   Interactive  Services.  We provide  technical  services  for  development  of
customized  BroadVision  One-To-One   applications,   custom  interfaces,   data
conversions  and system  integration.  These  consultants  participate in a wide
range of activities,  including requirements  definition and application design,
development  and   implementation.   These  consultants  also  provide  advanced
technology  services  focused on application  development for custom objects and
templates  and  database   administration  and  tuning.   Interactive   Services
consulting is generally offered on a time and materials basis.

   Content and Creative Services.  This group specializes in content management,
sourcing,  workflow processes and user-interface design. The group is made up of
BroadVision  One-To- One product  design experts and a variety of leading design
houses. This team combines extensive interactive design and marketing experience
to build effective user interfaces.  Content and Creative Services consulting is
generally offered on a time and materials basis.

   Technical  Support  Services.  We have tiered our support  programs to better
serve  the needs of our  worldwide  customer  base.  Standard  Support  provides
technical  assistance  during  regular  business  hours;  Enterprise  Support is
designed for customers with mission-critical  environments,  providing customers
with  access to  support  experts  24 hours a day,  7 days a week;  Personalized
Support assigns a specific  individual to an account.  We have technical support
centers  in North  America,  Europe  and Asia.  Under our  standard  maintenance
agreement,  we provide  telephone  support and upgrade  rights to new  releases,
including  patch  releases as necessary,  and product  enhancements.  The annual
maintenance   fee  for  these  services  is  based  upon  a  percentage  of  the
then-current  list price for the  licensed  software  fee,  payable  annually in
advance.

   Education  Services.  These  services are offered to customers  either at our
education  facilities  or at the  customers'  locations,  as either  standard or
customized classes. These classes are priced at either fixed daily rates or on a
per-class  basis. We expect our course  offerings to grow from six to 20 classes
in 2000.

   BroadVision  University.  To  provide  comprehensive,  high-quality  training
solutions  for  our  customers,   partners  and  employees  worldwide,  we  have
established BroadVision University.  Courses are delivered through various means
and methods,  including  traditional  instructor-led  courses as well as various
Web-based training mechanisms to facilitate distance learning.



                                       12
<PAGE>

   Our  goal is to  transfer  knowledge  in  "Web  time"  to a  large  worldwide
audience. Technical facilities will be located worldwide, including Redwood City
and Chicago in the United States,  the United Kingdom in Europe and Hong Kong in
Asia.

   We also  enroll our  employees  in  BroadVision  University,  to ensure  high
quality and consistent  training of our own personnel.  This extensive  training
program provides a series of foundation  courses that are general in content for
all  audiences,  which is followed by a specific  series of courses based on the
employee's role in our Worldwide Professional Services Organization.

Strategic Alliances

   A  significant  element  of our sales  strategy  is to  engage  in  strategic
business  alliances to assist us in marketing,  selling and developing  customer
applications.

   As of December 31, 1999, we had developed  key strategic  business  alliances
with  over 200  systems  integration,  design,  consulting  and  other  services
organizations  throughout the world,  including  Andersen  Consulting,  Deloitte
Consulting,   Hewlett-Packard,   Itochu   Techno-Sciences   Corp.,   NTT   Data,
PricewaterhouseCoopers, Security First Technologies and Sema Group.

   In April  1999,  we  announced  a strategic  alliance  with  Hewlett-Packard.
Hewlett-Packard  has  agreed to  resell  and  support  the  current  BroadVision
One-To-One  product  suite  and  to  co-develop,  sell  and  support  integrated
business-portal  solutions  that will act as the  interface  to next  generation
e-services for enterprise customers.

   Hewlett-Packard  is leveraging  its  approximately  5,000 person global sales
force to resell and support the current  BroadVision  One-To-One  product suite.
The new co-developed  products are being developed to run on multiple  platforms
and to enable  enterprise  customers  to deploy  quickly  and easily a series of
advanced,   personalized   business-portal  solutions  that  provide  integrated
commerce,  marketing  and  customer-relationship  management  across  Web sites,
e-mail,  call  centers,   PCs,  kiosks,   mobile  phones  and  personal  digital
assistants.

   Additionally, we have developed key technology partnerships with leading Web-
and wireless-focused  companies in areas complementary to our solutions, such as
data analysis and reporting, enterprise application integration,  enterprise Web
management,  call center  management,  voice  recognition,  payment  processing,
auctioning and XML.

   These  technology  partnerships  enhance our ability to base our  products on
industry  standards and to take advantage of current and emerging  technologies.
These alliances include companies such as Broadbase, E.Piphany, Interwoven, IONA
Technologies, Macromedia, Moai Technologies, Security First and STC.

   Our technology  partnerships  support our strategy of integrating  throughout
the  extended  enterprise,  from  multiple  touchpoints  such as Nuance's  voice
recognition/voice   response   technology,   to  integration   with   enterprise
applications using technology such as STC.

Customers and Markets

   As of December  31,  1999,  we had licensed our products to over 400 end-user
customers  and  100  partners.  As of  December  31,  1999,  our  products  were
commercially deployed in over 200 live Web sites.

   We have  targeted  a number  of  markets  that we  believe  to be  especially
conducive to one-to-one  relationship  management applications such as financial
services,  travel  and  leisure,  retail and  distribution,  telecommunications,
chemicals,  computer  hardware and software,  energy and  utilities,  industrial
equipment and automotive.



                                       13
<PAGE>

   Our primary target  customers are Global 2000  organizations  that are at the
forefront  of building  innovative  Web  applications  to increase  revenues and
reduce operational costs. We also target pure-play Web companies that have built
or are building their core businesses on the Web.

   During the year ended  December 31, 1997,  approximately  11% of our revenues
were attributable to one customer. During the years ended December 31, 1998, and
December  31,  1999,  no  customer  accounted  for more  than  10% of our  total
revenues.

<TABLE>
   The  following  table  sets  forth a  representative  list  of our  customers
organized by industry segment.

<CAPTION>
   Target Industry                                  Sample Applications                          Sample Customers
   ---------------                                  -------------------                          ----------------
<S>                                                 <C>                                          <C>
   Financial services                               Home banking                                 CCF France
                                                    Online brokerage                             Citigroup
                                                    Obtaining information on and                 Credit Suisse
                                                    selecting:
                                                    -Loans                                       Liberty Financial
                                                    -Mutual funds                                USAA
                                                    -Insurance
                                                    Knowledge management (intranets)

   Retail                                           Online shopping                              Circuit City
                                                    Interactive catalogues
                                                                                                 The Home Depot
                                                                                                 Office Max
                                                                                                 Rand McNally
                                                                                                 Sears Roebuck

   Telecommunications                               Commerce: Business to-business and           British Telecom
                                                    business-to-consumer
                                                    Online services
                                                    Customer self-service                        Nortel Networks
                                                                                                 Telia
                                                                                                 TELUS
                                                                                                 Vodafone

   Travel and leisure                               Reservations                                 Air Miles
                                                    Travel planning
                                                    Brand  projection, loyalty programs and      American Airlines
                                                    affinity marketing                           Budget Rental Cars
                                                                                                 Carlson Companies
                                                                                                 TAM Airlines

   Industrial manufacturing                         Knowledge management                         General Electric
                                                    Business-to-business                         Hewlett-Packard
                                                    purchasing                                   Hilti
                                                    Business-to-consumer purchasing              Philips PC Peripherals
                                                                                                 Xerox



                                       14
<PAGE>
   Target Industry                                  Sample Applications                          Sample Customers
   ---------------                                  -------------------                          ----------------

   Dot com's                                        Electronic storefronts                       Chipshot.com
                                                    Exchanges/market makers                      e-Greenbiz.com

                                                                                                 Mercata
                                                                                                 Pets.com
                                                                                                 Zones.com
</TABLE>

Sales and Marketing

   We market our products  primarily  through a direct sales  organization  with
operations in North America, Europe, Australia and Asia/Pacific. On December 31,
1999, our direct sales organization included 164 sales representatives, managers
and sales support.

   We have a sales office at our  headquarters  in Redwood City,  California and
have North American  sales offices in Atlanta,  Georgia;  Bellevue,  Washington;
Burlington,  Massachusetts; Dallas, Texas; Denver, Colorado; Irvine, California;
Minneapolis,  Minnesota;  New York,  New  York;  Portland,  Oregon;  Schaumberg,
Illinois; and Vancouver, British Columbia. We have a sales and service office in
McLean, Virginia for the U.S. Federal Government.

   We have international sales offices in Melbourne,  Australia;  Wanchai,  Hong
Kong; Hare Hatch, England;  Coorbevoie,  France; Munich,  Germany; Milan, Italy;
Tokyo,  Japan;  Seoul,  Korea;  Amersfoot,  The  Netherlands;   Wheelock  Place,
Singapore;  Madrid, Spain; Stockholm,  Sweden; Basel,  Switzerland;  and Taipei,
Taiwan.

   A component  of our  strategy is  continued  expansion  of our  international
activities.  We intend to  broaden  our  presence  in  international  markets by
expanding  our  international  sales  force  and  by  entering  into  additional
distribution   agreements.   We  also  contract  with   third-party   resellers,
distributors and systems  integrators in North America,  South America,  Europe,
Australia and Asia. We intend to increase our use of this distribution channel.

   Initial sales  activities  typically  include a demonstration  of BroadVision
One-To-One product suite capabilities at the prospect's site, followed by one or
more detailed technical reviews, often presented at our headquarters.  The sales
process usually involves collaboration with the prospective customer in order to
specify the scope of the  application.  Our professional  services  organization
typically  plays a key role in helping  customers to design,  and then  develop,
their applications.

   As of December 31, 1999, 68 employees  were engaged in a variety of marketing
activities,   including  preparing  marketing  research,  product  planning  and
collateral  marketing  materials,  managing  press  coverage  and  other  public
relations,  identifying potential customers, attending trade shows, seminars and
conferences,  establishing and maintaining close  relationships  with recognized
industry analysts and maintaining our Web site.

   Our marketing  efforts are targeted at:

     o product strategy development and product management;

     o building market awareness through press and analysts;

     o creating brand awareness and visibility;

     o producing and maintaining marketing information and sales tools;

     o generating and developing customer leads; and

     o sourcing and managing relationships with systems integrators, value-added
       resellers,  creative  design  and  advertising  agencies  and  technology
       partners.

                                       15
<PAGE>

Competition

   The market for personalized  e-business  one-to-one  relationship  management
applications  is  rapidly   evolving  and  intensely   competitive.   We  expect
competition to persist and intensify in the future.

   Our primary competition currently includes the following:

     o in-house  development efforts by prospective  customers or partners using
       application development tools;

     o other  vendors  of  application   software  or  application   development
       platforms and tools directed at content management,  interactive commerce
       and financial services, like InterWorld, Open Market and Vignette;

     o Web content  developers  that develop custom  software or integrate other
       application software into custom solutions;

     o International Business Machines; and

     o Microsoft.

   The principal competitive factors affecting the market for our products are:

     o depth and breadth of functionality offered;

     o ease of application development;

     o availability of knowledgeable developers;

     o time required for application development;

     o reliance on industry standards;

     o product reliability;

     o proven track record;

     o scalability;

     o maintainability;

     o personalization and other features;

     o product quality;

     o price; and

     o customer support.

   We believe that we presently  compete favorably with respect to each of these
factors.  However, our market is still evolving, and we may be unable to compete
successfully with current or future competitors.

Technology

   The technical  demands of  interactive,  personalized  one-to-one  e-business
applications,  deployable  on the  Web,  extranets  and  intranets,  require  an
architectural design that is standards-based,  open, interoperable and flexible.
Our  applications  are based on a  modular,  component-based  architecture  that
provides  for  robust,  scalable  and  extensible  e-business  applications.  By
emphasizing reusable code,  separation of application logic,  business rules and
data,  and  adherence  to open  standards  such as  Java,  XML  and  CORBA,  our
applications  provide an efficient  architecture  for  customers and partners to
deploy,  modify,  and control  applications,  as well as to integrate  them with
external business  systems.  This architecture also provides a robust foundation
upon which we can rapidly develop new products.

   Our  advanced  technology  enables  the  delivery  of  robust,  scalable  and
innovative  e-business solutions into the market faster and at a lower cost than
alternatives. Our technology consists of the following key elements:

Adherence to Industry Standards

   Industry standards protect a customer's investment by providing compatibility
with existing applications, enabling ease of modification, and reducing the need
for software to be rewritten.  Our architecture  complies with CORBA, a



                                       16
<PAGE>

standard for applications  software design and development widely adopted in the
commercial software industry. Applications that are CORBA-compliant can:

     o run on either  single  computers  with one or more  processors  or across
       large networks;

     o allow  replication  and  relocation of object  servers to improve  system
       performance;

     o are platform independent; and

     o have strongly defined application  programming interfaces through the use
       of the Interface Definition Language specified by CORBA.

   Java. We are strongly  committed to Java and Java-based  technologies such as
Enterprise  Java  Beans  (EJB).  Our  application  templates,  which  define the
front-end  look-and-feel  of pages on the web site,  are written in  JavaScript.
Most  of  our  backend   programs  are  written  in  C++  and  Java,  which  are
widely-accepted  standard programming languages for developing Web applications.
Our  commitment  to industry  standards  such as Java and C++,  along with open,
published programming  interfaces into the applications,  delivers an e-business
solution  that is open  and  extensible.  Customers  benefit  by  needing  fewer
resources to modify the application,  and by having simplified integrations with
other applications, such as ERP systems.

   XML. Our  applications  fully support XML, which is an emerging  standard for
managing and  exchanging  data between  systems.  In addition,  XML  facilitates
re-purposing  information so that it can be sent to non-browser  interfaces such
as those used by wireless devices including mobile telephones, pagers and PDA's.
Our  adoption  and support of XML for content  management  allows  customers  to
publish  information in a structured  manner,  which can then be directed toward
either a browser or communication devices such as email or mobile telephones.

   In  addition  to Java,  XML,  C++ and  CORBA,  we use other  widely  accepted
standards in developing our products,  including  Structured  Query Language for
accessing  relational database management systems;  Common Gateway Interface and
Hypertext  Transfer Protocol for Web access;  Netscape  Application  Programming
Interface for access to Netscape's  Web servers;  Secure Socket Layer for secure
transmissions over networks;  and the RC2 and MD5 encryption algorithms supplied
by RSA. Our applications can be operated in conjunction with relational database
management systems provided by Informix, Microsoft, Oracle and Sybase.

   N-Tier Architecture. Our applications use a modular, N-tier architecture that
logically separates application  presentation,  business rules and data. Between
each  of  these  tiers  are  session   managers  and  adapters  that  facilitate
integration with external  business systems  interface  technologies,  described
below, that establish seamless  interoperability between application components.
This architecture partitions applications across:

     o a front-end tier that manages the application  presentation and interface
       to Web site visitors;

     o application  engine  tiers that  manage  application  activities  such as
       community,  profiling, targeting and transactions, and the business rules
       that define the interactive  characteristics  and behavior of one-to-one,
       personalized  applications.  This layer utilizes a lightweight  component
       model,  which can be  distributed  across  multiple  logical and physical
       processors, thus enabling the N-tier design of the application; and

     o a back-end tier that integrates  underlying  database  management systems
       with  external  business  systems,  such as ERP and CRM  solutions,  that
       perform specialized relationship management functions.

   Interaction  Manager.  Our "session manager" technology is designed to manage
the high volume of dynamic  interactions  that occur in online sessions  between
many  concurrent  Web site visitors and an e-business  application.  The session
manager,  called  the  BroadVision   Interaction  Manager,   enables  three  key
activities:

     o maintaining user profile  information  between visitors and sites so that
       each current and future interaction can trigger a response appropriate to
       the objectives of both visitor and site provider;

     o interpreting   application   objects  and  templates  in  real  time  and
       retrieving  profile data and business rules to dynamically  generate HTML
       code that tailors  content,  Web pages and  interactions to the needs and
       interests of individual Web site visitors; and

     o enabling  application  scalability  by allowing Web site providers to add
       additional software processes or hardware processors to their Web systems
       to  support  more   concurrent  Web  site  visitors   without   incurring
       performance   degradation   or   additional   overhead   in   application
       maintenance.



                                       17
<PAGE>

   Components and  Applications.  We believe the costs and time  associated with
Web application  development and maintenance can be  substantially  reduced with
our  technology.   Our  applications  are  comprised  of  reusable   application
components and presentation templates.  Application components, such as customer
account information for a business-to-business  transaction,  are designed to be
open and  customizable.  Used in  combination  with our  structured  development
methodology,  these  technologies  are designed to help  customers  and partners
create reusable program components that increase  application quality and reduce
cost  and  time-to-market  of  new  and  maintained  applications.   Application
templates,  written  in  JavaScript,  enable  business  managers  to define  and
implement business rules through the BroadVision  One-To-One Command Center on a
real-time basis. Our customers, partners and consultants use these templates and
JavaScript to develop e-business application  solutions.  Our Education Services
Group offers training classes to customers and partners on the use of components
and application templates.

   Content Management.  Key to successful e-business applications is the ability
to deliver relevant, current and accurate information to the application's users
such  as  customers,   employees  and  business  partners.  Our  personalization
capabilities  enable  business  managers  to define  rules to deliver  the right
information to the right user at the right time. Content  management  discipline
ensures  that  this  information  is kept  current  and  accurate.  Our  content
management system, which is based on XML standards,  provides a rich environment
for users to create and  publish  information  to the web and to other  formats,
such as wireless. In addition,  XML enables automatic data feeds and syndication
of information to other systems and business  partners.  For example, a vendor's
catalog information can be automatically and easily included in a e-business Web
site.

Intellectual Property and Other Proprietary Rights

   Our success and ability to compete are dependent to a  significant  degree on
our  proprietary  technology.  We rely on a  combination  of patent,  copyright,
trademark,  service  mark,  trade secret laws and  contractual  restrictions  to
protect our proprietary rights in products and services. We hold a patent issued
to us on  January  20,  1998,  covering  certain  elements  of  our  BroadVision
One-To-One  Enterprise product.  Our success and competitive position depends on
our  ability  to  protect  our  proprietary   technology.   We  have  registered
"BroadVision"  and "BroadVision  One-To-One" as trademarks in the United States.
However,  the  steps  taken  by us  may  not  prevent  misappropriation  of  our
technology and agreements  entered into for that purpose may not be enforceable.
In  addition,  litigation  like the  lawsuit  against  ATG,  which was  recently
settled,  may be  necessary in the future to enforce our  intellectual  property
rights, to protect our trade secrets, to determine the validity and scope of the
proprietary  rights of others,  or to defend against claims of  infringement  or
invalidity.  We cannot  guarantee that  infringement or other claims will not be
asserted  or  prosecuted  against us in the future  whether  resulting  from our
intellectual  property or licenses  from third  parties.  Claims or  litigation,
whether  successful  or  unsuccessful,  could  result in  substantial  costs and
diversions of resources,  either of which could harm our business.  We rely upon
certain  software  that we license  from  third  parties,  including  relational
database  management  systems  from Oracle and  Sybase,  object  request  broker
software from IONA  Technologies,  database  access  technology  from Rogue Wave
Software  and  other  software  that is  integrated  with  internally  developed
software and used in our software to perform key functions.  In this regard, all
of our  services  incorporate  data  encryption  and  authentication  technology
licensed from RSA. Our  third-party  technology  licenses may not continue to be
available  to us on  commercially  reasonable  terms,  if at all. The loss of or
inability to maintain any of these technology licenses could result in delays in
introduction  of our products  and  services  until  equivalent  technology,  if
available,  is  identified,  licensed  and  integrated,  which  could  harm  our
business.

Employees

   As of December 31, 1999, we employed a total of 652 full-time  employees,  of
whom 507 are based in the United  States,  96 in Europe and 49 in Asia. Of these
full-time  employees,  232  are in  sales  and  marketing,  119  are in  product
development,  246 are in professional services and client support, and 55 are in
finance,  administration  and  operations.  As of December 31, 1998 and 1997, we
employed 271 and 188 full-time employees, respectively.



                                       18
<PAGE>

   We believe that our future success depends on attracting and retaining highly
skilled personnel. Competition for personnel is intense, and we may be unable to
attract and retain high-caliber employees.  Our employees are not represented by
any collective  bargaining  unit. We have never  experienced a work stoppage and
consider our employee relations to be good.

<TABLE>

Executive Officers

   The  following  table sets forth  certain  information  regarding our current
executive officers.
<CAPTION>

       Name                                        Age          Position
       ----                                        ---          --------
<S>                                                 <C>         <C>
       Pehong Chen...............................   42          Chairman  of  the  Board,   Chief  Executive  Officer  and
                                                                President
       Randall C. Bolten.........................   47          Chief  Financial  Officer and  Executive  Vice  President,
                                                                Operations

       Clark W. Catelain.........................   52          Executive Vice President, Engineering

       James W. Thanos...........................   51          Executive  Vice President and General  Manager,  Worldwide
                                                                Field Organization

       Nancy Mills-Turner........................   47          Executive  Vice President and General  Manager,  Worldwide
                                                                Professional Services

       Rani Merritt..............................   35          Executive  Vice President and General  Manager,  Worldwide
                                                                Marketing Organization
</TABLE>

    Pehong Chen has served as our Chairman of the Board, Chief Executive Officer
and President since our  incorporation  in May 1993. From 1992 to 1993, Dr. Chen
served as the Vice President of Multimedia  Technology at Sybase,  a supplier of
client-server software products. Dr. Chen founded and, from 1989 to 1992, served
as  President  of  Gain  Technology,   a  provider  of  multimedia  applications
development  systems,  which was  acquired  by Sybase.  He  received  a B.S.  in
Computer  Science from National Taiwan  University,  an M.S. in Computer Science
from Indiana  University and a Ph.D. in Computer  Science from the University of
California at Berkeley.

    Randall C. Bolten has served as our Chief Financial  Officer since September
1995 and as Chief  Financial  Officer and Executive Vice  President,  Operations
from  January  2000.  From  1994 to  1995,  Mr.  Bolten  served  as a  financial
consultant to various entrepreneurial enterprises. From 1992 to 1994, Mr. Bolten
served as Chief  Financial  Officer of BioCad  Corporation,  a supplier  of drug
discovery  software  products.  From 1990 to 1992,  Mr.  Bolten  served as Chief
Financial Officer, Business Development Unit and then Vice President, Finance of
Teknekron,  a company  engaged  in the  management  of various  high  technology
companies.  He received an A.B. in Economics  from  Princeton  University and an
M.B.A. from Stanford University.

    Clark W. Catelain has served as our Vice President,  Engineering, since June
1995 and as our Executive Vice President,  Engineering  since January 2000. From
1989 to May 1995, Mr. Catelain served as the Senior Vice President,  Engineering
of Gupta, a supplier of client-server database products. Mr. Catelain received a
B.S. in Mathematics and Computer Science from Purdue University.

    James W.  Thanos  has  served as our Vice  President  and  General  Manager,
Americas  since  January 1998 and as our  Executive  Vice  President and General
Manager, Worldwide Field Organization, since January  2000. From January 1995 to
January 1998, Mr. Thanos served as Vice  President of North American  Operations
of Aurum Software,  a sales force automation  company.  From May 1994 to January
1995,  Mr.  Thanos  served  as Vice  President  of  Sales of  Digital  Equipment
Corporation.  From  January 1993 to December  1994,  Mr.  Thanos  served as Vice
President  of  Sales of  Harvest  Software,  an  optical  character  recognition
software company.  From December 1988 to January 1993, Mr. Thanos served as Vice
President of Sales Operations of Metaphor,  a decision support software company.
Mr.  Thanos  holds  a  B.A.  in  International   Relations  from  Johns  Hopkins
University.

    Nancy Mills-Turner joined BroadVision in September 1999 as Vice President of
Worldwide  Professional  Services and in January 2000, was named  Executive Vice
President  and  General  Manager,  Worldwide  Professional  Services.  Prior  to
BroadVision,  she worked for Oracle  managing the  professional  services groups
including Consulting and Education. Before joining Oracle in 1995, she served as
director   of   Federal,    State   and   Local    practice



                                       19
<PAGE>

consultants at PricewaterhouseCoopers  LLP. Prior to PricewaterhouseCoopers LLP,
she was  Vice  President,  Software  at BIS  Computer  Solutions  directing  the
activities of product  development  divisions  specializing  in  commercial  and
criminal justice  applications  and  implementations  services. Ms. Mills-Turner
received a B.A./B.S.  in Business  Administration  and Biochemistry from Arizona
State  University  and  a  Master's  degree  in  Business   Administration   and
Information Management Sciences from University of Southern California.

    Rani Merritt has served as Executive  Vice  President  and General  Manager,
Worldwide  Marketing  Organization  since  January 2000.  In 1997,  Ms.  Merritt
co-founded  Icarian,   Inc.,  a  provider  of   business-to-business   workforce
eServices,  and served as Icarian's Vice  President of Marketing  until December
1999.  From  September  1995 to August 1997,  Ms.  Merritt was Vice President of
Strategic Services at BroadVision.  From June 1994 to August 1995, she served as
Director of Online Product  Development/Director of Operations at U.S. West. Ms.
Merritt  received a B.A. and an M.S. in  Industrial  Engineering  from  Stanford
University.

ITEM 2.    PROPERTIES

   Our principal  administration,  research and development,  sales, consulting,
training and support facilities are located in Redwood City,  California,  where
we occupy approximately  115,000 square feet pursuant to leases expiring through
2007.  We  recently  entered  into a lease for a new  building  currently  under
construction  that will  provide us with  approximately  400,000  square feet in
Redwood City, California. The building is expected to be available for occupancy
during June 2001.

   Our European  headquarters were recently relocated to Green Park, Reading, in
the United Kingdom where we lease approximately 19,000 square feet. We also rent
space in various  cities to support our sales and field support  activities.  We
have North American  sales offices in Atlanta,  Georgia;  Bellevue,  Washington;
Burlington,  Massachusetts; Dallas, Texas; Denver, Colorado; Irvine, California;
Minneapolis,  Minnesota;  New York,  New  York;  Portland,  Oregon;  Schaumberg,
Illinois; and Vancouver, British Columbia. We have a sales and service office in
McClean,  Virginia for the U.S. Federal Government.  We have international sales
offices in  Melbourne,  Australia;  Wanchai,  Hong Kong;  Hare  Hatch,  England;
Coorbevoie,  France; Munich,  Germany; Milan, Italy; Tokyo, Japan; Seoul, Korea;
Amersfoot, The Netherlands; Wheelock Place, Singapore; Madrid, Spain; Stockholm,
Sweden; Basel, Switzerland; and Taipei, Taiwan.

ITEM 3.    LEGAL PROCEEDINGS

   On February 22, 2000,  we reached a settlement  agreement  and entered into a
license  agreement with Art  Technology  Group,  or ATG, in connection  with the
lawsuit we filed on December 11, 1998 against ATG alleging  infringement  of our
U.S.  Patent  No.  5,710,887.  In  accordance  with the terms of the  settlement
agreement, we granted ATG a nonexclusive,  nontransferable, worldwide, perpetual
license  and we  were  paid  by ATG $8  million  at the  effective  date  of the
settlement  and will  receive  an  additional  $7 million  payable in  quarterly
installments  commencing  February  24,  2000 in the  form  of four  consecutive
quarterly  payments of  $750,000  during  2000 and eight  consecutive  quarterly
payments of $500,000 during 2001 and 2002.

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

         Not applicable.


                                       20
<PAGE>

                                     PART II


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

   Our common  stock is quoted on the Nasdaq  National  Market  under the symbol
"BVSN."  The  following  table  shows high and low sale  prices per share of the
common stock as reported on the Nasdaq National Market:

                                                        High               Low
                                                        ----               ---

          Fiscal Year 1997
          First Quarter..........................     $   1.15          $   0.83
          Second Quarter.........................         1.01              0.49
          Third Quarter..........................         0.82              0.56
          Fourth Quarter.........................         0.97              0.65

          Fiscal Year 1998
          First Quarter..........................     $   2.11          $   0.67
          Second Quarter.........................         2.79              1.64
          Third Quarter..........................         3.28              1.12
          Fourth Quarter.........................         4.92              1.03

          Fiscal Year 1999
          First Quarter..........................     $   8.04          $   3.01
          Second Quarter.........................         8.19              4.35
          Third Quarter..........................        15.54              6.82
          Fourth Quarter.........................        59.67             14.10

         We have never declared or paid cash dividends on our common stock,  and
it is our present  intention to retain  earnings to finance the expansion of our
business.  In addition,  our credit facility with our commercial lender contains
certain covenants that may limit our ability to pay cash dividends.


                                       21
<PAGE>


ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

<TABLE>
         The selected consolidated financial data set forth below should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," the Consolidated Financial Statements of the Company
and Notes thereto, and other financial  information included elsewhere herein of
this Form 10-K.  Historical  results are not  necessarily  indicative of results
that may be expected for future periods.

<CAPTION>

                                                                      Years Ended December 31,
                                                 -------------------------------------------------------------
                                                     1995          1996         1997         1998       1999
                                                  ----------    ----------   ----------   ----------   -------
                                                               (in thousands, except per share data)
<S>                                                <C>           <C>          <C>          <C>          <C>

    Consolidated Statement of Operations Data:

    Revenues:
      Software licenses......................      $     --      $  7,464     $ 18,973     $ 36,067     $ 75,383
      Services...............................           540         3,418        8,132       14,844       40,131
                                                   --------      --------     --------     --------     --------
            Total revenues...................           540        10,882       27,105       50,911      115,514
    Cost of revenues:
      Cost of software licenses..............            --           330        1,664        1,001        3,703
      Cost of services.......................           249         2,164        4,284        8,704       25,108
                                                   --------      --------     --------     --------     --------
            Total cost of revenues...........           249         2,494        5,948        9,705       28,811
                                                   --------      --------     --------     --------     --------
    Gross profit.............................           291         8,388       21,157       41,206       86,703
    Operating expenses:
      Research and development...............         2,575         4,985        7,392        9,227       14,568
      Sales and marketing....................         1,348        12,066       18,413       26,269       48,903
      General and administrative.............           846         2,034        2,990        3,786        7,970
                                                   --------      --------     --------     --------     --------
            Total operating expenses.........         4,769        19,085       28,795       39,282       71,441
                                                   --------      --------     --------     --------     --------
      Operating income (loss)................        (4,478)      (10,697)      (7,638)       1,924       15,262
      Other..................................           160           552          265        2,115        3,547
                                                   --------      --------     --------     --------     --------
      Net income (loss)......................      $ (4,318)     $(10,145)    $ (7,373)    $  4,039     $ 18,809
                                                   ========      ========     ========     ========     ========

    Net income (loss) per share:

    Basic earnings (loss) per share..........      $  (0.04)     $   (0.06)   $  (0.04)    $   0.02     $   0.08
                                                   ========      =========    ========     ========     ========
    Shares used in computation-- basic earnings
    (loss) per share.........................       107,784       169,335      181,872      210,114      229,128
                                                   ========      ========     ========     ========     ========

    Diluted earnings (loss) per share........      $  (0.04)     $   (0.06)   $  (0.04)    $   0.02     $   0.07
                                                   ========      =========    ========     ========     ========
    Shares used in computation-- diluted
    earnings (loss) per share................       107,784       169,335      181,872      230,877      260,712
                                                   ========      ========     ========     ========     ========

                                                                          As of December 31,
                                                   --------------------------------------------------------------
                                                      1995         1996         1997         1998         1999
                                                   ----------   ----------   ----------   ----------   ----------
                                                                            (in thousands)

      Consolidated Balance Sheet Data:

      Cash and cash equivalents..................    $ 4,311     $ 17,608     $  8,277     $ 61,878     $279,823
      Working capital............................      3,916       18,258       11,485       63,620      342,024
      Total assets...............................      5,857       26,714       26,539      101,562      406,128
      Debt and capital leases, less current
        portion..................................        516          495        3,005        3,194        4,875
      Accumulated deficit........................     (6,124)     (16,269)     (23,642)     (19,603)        (794)
      Total stockholders' equity.................      4,254       21,016       15,121       81,809      346,238

</TABLE>

                                       22
<PAGE>


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

Except for historical information contained or incorporated by reference herein,
the following discussion contains forward-looking  statements that involve risks
and uncertainties.  The Company's actual results could differ significantly from
those  discussed  herein.  Factors  that  could  cause  or  contribute  to  such
differences  include,  but are not limited to, those  discussed  below under the
caption  "Risk  Factors"  and  elsewhere  herein  of this  Form  10-K.  Any such
forward-looking statements speak only as of the date such statements are made.

Overview

   We develop, market and support fully integrated scalable application software
solutions  specifically designed for one-to-one  relationship  management across
the extended  enterprise.  These total end-to-end solutions enable businesses to
use the Internet as a unique platform to conduct  electronic  commerce,  provide
online financial services,  offer online interactive customer self-service,  and
deliver  targeted  information to all  constituents of the extended  enterprise.
These  constituents  include  but  are  not  limited  to  customers,  suppliers,
distributors,  partners, and employees. The BroadVision One-To-One product suite
allows  businesses  to tailor  their Web site  content to the special  needs and
interests of individual users by  personalizing  each  constituent's  visit on a
real-time  interactive basis. Our applications  accomplish this by capturing Web
site visitor profile information and targeting an enterprise's organized content
to each  visitor  based on easily  constructed  business  rules.  We believe the
benefits  of  these  applications  include  greater  customer  satisfaction  and
loyalty,  increased business volume, enhanced brand awareness,  reduced costs to
service  customers  and  execute  transactions,   as  well  as  higher  employee
productivity.

   We sell our products  and services  worldwide  through  direct sales  forces,
independent  distributors,  resellers  and  system  integrators.  We also have a
global network of strategic  business  relationships  with key industry platform
and Web developer  partners.  We also engage in strategic  business alliances to
assist  us in  marketing,  selling  and  developing  customer  applications.  In
addition,  we place a strategic emphasis on technology  alliances to ensure that
our products are based on industry  standards and that we are positioned to take
advantage of current and emerging  technologies.  The benefits of this  approach
include  enabling us to focus on our core  competencies  while  reducing time to
market and simplifying the task of designing and developing  applications for us
and our customers.

Proposed Business Acquisition - Interleaf

   On January 26, 2000,  we  announced a definitive  agreement to acquire all of
the  outstanding  stock of  Interleaf,  subject to  stockholder  and  regulatory
approval  and other  conditions.  Under the  terms of the  agreement,  Interleaf
shareholders will receive 1.0395 shares of BroadVision  common stock in exchange
for each share of Interleaf common stock; or estimated purchase consideration of
approximately   $802  million,   inclusive  of  approximately   $18  million  of
acquisition  and severance  costs. We expect to account for the acquisition as a
purchase.

STATEMENT OF OPERATIONS AS A PERCENT OF TOTAL REVENUES

    The following table sets forth certain items  reflected in our  consolidated
statements  of  operations  expressed  as a percent  of total  revenues  for the
periods indicated.

                                                    Years Ended December 31,
                                               ---------------------------------
                                                  1997         1998         1999
                                               ---------    ---------    -------
  Revenues:
    Software licenses........................      70%          71%          65%
    Services.................................      30           29           35
                                                  ---          ---          ---
            Total revenues...................     100          100          100
                                                  ---          ---          ---
  Cost of revenues:
    Cost of license revenues.................       6            2            3
    Cost of services revenues................      16           17           22
                                                  ---          ---          ---
       Total cost of revenues................      22           19           25
                                                  ---          ---          ---
            Gross profit.....................      78           81           75
                                                  ---          ---          ---
  Operating expenses:
    Research and development.................      27           18           13
    Sales and marketing......................      68           52           42
    General and administrative...............      11            7            7
                                                  ---          ---          ---
       Total operating expenses..............     106           77           62
                                                  ---          ---          ---
            Operating income (loss)..........     (28)           4           13
       Other.................................       1            4            4
                                                  ---          ---          ---
            Income (loss) before income taxes     (27)           8           17
       Income tax provision..................      --           --            1
                                                  ---          ---          ---
            Net income (loss)................     (27)%          8%          16%
                                                  ===          ===          ===

                                       23
<PAGE>

RESULTS OF OPERATIONS

                                    Revenues

<TABLE>
   Our  revenues  are derived  from  software  licensing  arrangements  and fees
charged for  services.  Our  software  licensing  arrangements  include fees for
software  application  products and fees for profiled users  associated with the
deployment of purchased applications.  In general,  revenues related to software
licensing arrangements are recognized upon the consummation of a sale. A sale is
considered consummated when a non-cancelable license agreement has been executed
and the customer  acknowledges an unconditional  obligation to pay, the software
product  has been  delivered,  there are no  uncertainties  surrounding  product
acceptance,  the fees are fixed and  determinable  and  collection is considered
probable.  Our  professional  services are delivered by our  Strategic  Services
Group,   Interactive  Services  Group,  Content  and  Creative  Services  Group,
Education  Services Group and Technical  Support Group.  Revenues for consulting
related  services are  typically  recognized  when the  services are  performed.
Maintenance  fees for  technical  support  and  software  product  upgrades  are
recognized  ratably over the  contracted  period.  A summary of our software and
services revenues by geographic region for the periods indicated is as follows:

<CAPTION>
                                                   Software      %    Services      %       Total      %
                                                   --------      -    --------      -       -----      -
                                                                    (dollars in thousands)
<S>                                                 <C>         <C>   <C>          <C>    <C>         <C>
                 Year Ended December 31, 1997:

                   Americas.....................    $ 8,584      45%  $  4,288      53%   $12,872      48%
                   Europe.......................      8,835      47      2,015      25     10,850      40
                   Asia/Pacific.................      1,554       8      1,829      22      3,383      12
                                                    -------     ---   --------     ---    -------     ---
                 Total..........................    $18,973     100%  $  8,132     100%   $27,105     100%
                                                    =======     ===   ========     ===    =======     ===

                 Year Ended December 31, 1998:

                   Americas.....................    $19,301      54%  $ 10,029      67%   $29,330      58%
                   Europe.......................     13,879      38      3,065      21     16,944      33
                   Asia/Pacific.................      2,887       8      1,750      12      4,637       9
                                                    -------     ---   --------     ---    -------     ---
                 Total..........................    $36,067     100%  $ 14,844     100%   $50,911     100%
                                                    =======     ===   ========     ===    =======     ===

                 Year Ended December 31, 1999:

                   Americas.....................    $48,822      65%  $ 30,501      76%   $79,323      69%
                   Europe.......................     18,918      25      7,293      18     26,211      22
                   Asia/Pacific.................      7,643      10      2,337       6      9,980       9
                                                    -------     ---   --------     ---    -------     ---
                 Total..........................    $75,383     100%  $ 40,131     100%   $115,514    100%
                                                    =======     ===   ========     ===    ========    ===
</TABLE>

1999 versus 1998

   Total revenues for the year ended  December 31, 1999 increased  $64.6 million
or 127% on a  year-over-year  basis,  and  consisted  of an increase in software
license  revenue  of $39.3  million  or 109%  and an  increase  in  professional
services revenue of $25.3 million or 170%.

   The 109%  increase in  software  license  revenues  is a result of  continued
strong  demand  for our  expanding  product  line  and  core  competencies;  our
strategic positioning within a high momentum market for business to business and
business to consumer personalization focused software application solutions; and
the ability to achieve greater penetration into our existing customer base while
continuing to add significant numbers of new quality customers. During the year,
we continued to expand the functionality and  personalization  attributes of our
application  products  that  contributed  to a  broadened  customer  base and an
increased level of repeat  business.  In addition,  our deployment  related user
profile  based  licensing  revenues  continued to  accelerate  as a result of an
increasingly larger number of live sites.  Software product license revenues for
our  targeted web enabling  applications  increased to $25.9  million in 1999 as
compared to $10.2  million in 1998.  Deployment  related  user  profile  license
revenues  increased  to $31.2  million in 1999 as compared  to $14.8  million in
1998. During the year ended December 31, 1999, we licensed approximately 217 new
end-user  customers and 47 new partners which compares with approximately 94 new
end-user  customers and 27 new partners for the year ended December 31, 1998. As
of December 31, 1999, we had a



                                       24
<PAGE>

total  installed  license base of over 410 end-user  customers and 120 partners,
which  compares with over 195 end-user  customers and 75 partners as of December
31, 1998.

   The 170%  increase  in  professional  services  revenue is a result of higher
levels of consulting related services associated with increased business volumes
and higher customer support  revenues  derived from a larger installed  customer
base.  Maintenance  related fees for technical support and product upgrades were
$13.4  million in 1999 which  compares to $5.1 million in 1998.  During the year
ended  December  31, 1999,  we continued to expand and enhance our  professional
services  group and,  during  August  1999,  we completed  our greatly  expanded
corporate  training facility located in Redwood City,  California.  We have also
added additional  training and  professional  consulting  related  facilities in
Europe and Asia as of December 31, 1999.

   To date we have  achieved  good market  acceptance  for our products and have
experienced continued revenue growth. We anticipate that international  revenues
will continue to account for a significant amount of total revenues,  and expect
to  continue  to  commit  significant  time  and  financial   resources  to  the
maintenance and ongoing  development of direct and indirect  international sales
and support channels. Our Asia/Pacific  operations have experienced lower growth
rates  over the  previous  years  as a result  of the  generally  weak  economic
conditions of that region. As a result, we expect that any significant growth in
international revenues will most likely come from European operations.  However,
we may be unable to maintain or continue to increase  international  or domestic
market acceptance for our family of products.

1998 versus 1997

   Total revenues for the year ended  December 31, 1998 increased  $23.8 million
or 88% on a  year-over-year  basis,  and consisted of software  license  revenue
increases of $17.1 million or 90% and professional services revenue increases of
$6.7 million or 83%.

   The 90% increase in software license  revenues was primarily  attributable to
the expanding  sales  volumes of our three  complementary  packaged  application
products,  higher  deployment  license revenues and to a lesser extent,  product
pricing   increases   that  were   effective   October  1,   1998.   Application
license-related revenues for our three complementary products increased to $10.2
million in 1998 as compared to $2.4 million in 1997.  Deployment-related license
revenues increased to $14.8 million in 1998 as compared to $8.1 million in 1997.
During the year ended  December  31,  1998,  we  licensed  approximately  94 new
end-user customers and 27 new partners, which compares with approximately 70 new
end-user  customers and 34 new partners for the year ended December 31, 1997. As
of December 31, 1998, we had a total installed license base of over 195 end-user
customers and 75 partners,  which compares with over 105 end-user  customers and
48 partners as of December 31, 1997.

    The 83%  increase in  professional  services  revenue  results from a higher
level of consulting related services  associated with increased business volumes
and higher levels of customer  support  revenues derived from a larger installed
customer  base.  Maintenance  revenues  were $5.1 million in 1998 as compared to
$2.1 million in 1997.

Cost of Revenues

<TABLE>
    Cost of license  revenues  includes  royalties  payable to third parties for
software  that is either  embedded in, or bundled and sold with,  our  products;
commissioned  agent fees paid to  distributors;  and the costs of product media,
duplication,  packaging  and  other  associated  manufacturing  costs.  Cost  of
services consists primarily of employee-related  costs,  third-party  consultant
fees  incurred  on  consulting  projects,  post-contract  customer  support  and
instructional training services.

<CAPTION>
                                                         Years Ended December 31,
                                          ----------------------------------------------------
                                            1997       %      1998       %       1999       %
                                          -------  -------  -------  -------   -------  -----
                                                         (dollars in thousands)
<S>                                        <C>        <C>    <C>        <C>     <C>        <C>
Cost of license revenues [1]..........     $1,664      9%    $1,001      3%     $3,703      5%
Cost of services revenues [2].........      4,284     53      8,704     59      25,108     63
                                           ------            ------             ------
Total cost of revenues [3]............     $5,948     22%    $9,705     19%     $28,811    25%
                                           ======            ======             =======

<FN>
[1]  -- Percentage is calculated  based on total software  license  revenues for
        the period indicated

[2]  -- Percentage is calculated based on total services revenues for the period
        indicated

[3]  --  Percentage  is  calculated  based  on  total  revenues  for the  period
         indicated
</FN>
</TABLE>

                                       25
<PAGE>

1999 versus 1998

   For the year ended December 31, 1999, cost of license revenues increased $2.7
million  or 270% on a  year-over-year  basis.  Cost of  software  licenses  as a
percent of license  revenues  was 5% in 1999 as compared to 3% in 1998.  Cost of
services   revenues   during  1999   increased   $16.4  million  or  188%  on  a
year-over-year basis. Cost of services as a percent of services revenues was 63%
in 1999 as compared to 59% in 1998.

   The  increase  in cost of  license  revenues,  in both  absolute  dollar  and
relative  percentage  terms, was principally a result of the higher mix of third
party  software  bundled and sold with our products and the related  third party
royalty fees  payable on those  sales.  Third party  royalty  costs  relative to
license   revenues  have  been  offset  to  some  extent  as  a  result  of  our
renegotiating  previously existing  percentage-based  royalty  arrangements into
prepaid fixed fee royalties for periods extending through 2004.

   The  increase in cost of services  revenues in absolute  dollar  terms during
1999 as compared to 1998 is a result of higher business  volumes as evidenced by
increased services revenues. Overall costs increased as a result of additions to
our  professional  services staff and the  employment of outside  consultants to
meet  short-term  consulting  demands.  The  increase  in cost of  services as a
percentage  of  services  revenues  is a  result  of  the  assimilation  of  new
professional  consultants  added to the group  during the year and higher use of
outside  consultants in relation to the extent  previously used during the prior
year period.

1998 versus 1997

   For the year ended  December 31,  1998,  cost of license  revenues  decreased
$663,000  or 40% on a  year-over-year  basis.  Cost of  software  licenses  as a
percent of license  revenues  was 3% in 1998 as compared to 9% in 1997.  Cost of
services revenues during 1998 increased $4.4 million or 103% on a year-over-year
basis.  Cost of services as a percent of  services  revenues  was 59% in 1998 as
compared to 53% in 1997.

   The  decrease  in cost of  license  revenues,  in both  absolute  dollar  and
relative  percentage terms, was principally a result of lower commissioned agent
fees and third party royalty  rates.  We continued to expand our in-house  sales
force  capabilities  and during 1998 direct  sales were higher and  commissioned
agent sales were lower relative to 1997. In addition,  royalty costs relative to
total license revenues  decreased as a result of our  renegotiating a previously
existing  percentage based royalty  arrangement into a prepaid fixed fee royalty
for a period through 2001.

   The  increase in cost of services  revenues in absolute  dollar  terms during
1998 as compared to 1997 is a result of expanded  business  volumes as evidenced
by increased services revenues. Overall costs increased as a result of additions
to our professional  services staff and the employment of outside consultants to
meet  short-term  consulting  demands.  The  increase  in cost of  services as a
percentage of services revenues is a result of higher use of outside consultants
in relation to the extent previously used during the prior year period.

                    Operating Expenses and Other Income, net

   Research   and   development   expenses   consist   primarily   of  salaries,
employee-related  benefit costs and consulting fees incurred in association with
the development of our products.

   Costs incurred for the research and development of new software  products are
expensed as incurred until the time that technological feasibility,  in the form
of a working model, is  established,  at which point these costs are capitalized
subject  to  recoverability.  The  costs  we  have  incurred  subsequent  to the
establishment  of a working  model but prior to  general  release  have not been
significant. To date, we have not capitalized any software development costs.



                                       26
<PAGE>

   Sales and marketing expenses consist primarily of salaries,  employee-related
benefit  costs,  commissions  and  other  incentive  compensation,   travel  and
entertainment and  marketing-related  expenditures such as collateral materials,
trade shows, public relations and creative services.

   General  and   administrative   expenses   consist   primarily  of  salaries,
employee-related benefit costs and professional service fees.

<TABLE>
   A summary of  operating  expenses is set forth in the  following  table.  The
percentage of expenses is calculated based on total revenues.
<CAPTION>

                                                               Years Ended December 31,
                                              ------------------------------------------------------
                                                1997        %       1998        %       1999       %
                                              --------  --------  --------  --------  -------- -----
                                                               (dollars in thousands)
<S>                                            <C>         <C>     <C>         <C>     <C>        <C>
Research and development..................     $ 7,392      27%    $ 9,227     18%     $14,568    13%
Sales and marketing.......................      18,413      68      26,269     52      48,903     42
General and administrative................       2,990      11       3,786      7       7,970      7
                                               -------     ---     -------             ------
Total operating expenses..................     $28,795     106%    $39,282     77%     $71,441    62%
                                               =======     ===     =======     ==      =======    ==
Other income, net.........................     $   265       1%    $ 2,036      4%     $4,543      4%
                                               =======     ===     =======     ==      ======     ==
</TABLE>

1999 versus 1998

   Research and development  expenses for the year were $14.6 million in 1999 as
compared  to  $9.2  million  in  1998  which   represents  an  increase  of  58%
year-over-year.  Sales and marketing expenses for the year were $48.9 million in
1999 as compared to $26.3  million in 1998 which  represents  an increase of 86%
year-over-year.  General  and  administrative  expenses  for the year  were $8.0
million in 1999 as compared to $3.8 million in 1998 which represents an increase
of 111%  year-over-year.  Net other income for the year was $4.5 million in 1999
as  compared  to $2.0  million  in 1998  that  represents  an  increase  of 123%
year-over-year.

   The increase in research and development  expenses is primarily  attributable
to personnel costs for added headcount within those  operations  involved in the
enhancement of existing  applications and the development of our next generation
of products.  The increases in sales and marketing expenses reflects the cost of
hiring additional sales and marketing  personnel,  the continued  development of
sales  distribution  channels and the expansion of  promotional  activities  and
marketing-related  programs.  In addition,  commission  rates were higher during
1999 as result of sales people  exceeding  their sales  quotas.  The increase in
general and administrative expenses is attributable to additional administrative
and management personnel, higher professional fees and additional infrastructure
to support the expansion of our operations.  The increase in net other income is
attributable to a higher level of investment  income during the year as a result
of earnings on proceeds  received  from a  follow-on  public  stock  offering in
November 1999.

1998 versus 1997

   Research and  development  expenses for the year were $9.2 million in 1998 as
compared  to  $7.4  million  in  1997  which   represents  an  increase  of  25%
year-over-year.  Sales and marketing expenses for the year were $26.3 million in
1998 as compared to $18.4  million in 1997 which  represents  an increase of 43%
year-over-year.  General  and  administrative  expenses  for the year  were $3.8
million in 1998 as compared to $3.0 million in 1997 which represents an increase
of 27% year-over-year. Net other income for the year was $2.0 million in 1998 as
compared to $265,000 in 1997 that represents an increase of 668% year-over-year.

   The increase in research and development  expenses is primarily  attributable
to personnel costs for added headcount within those  operations  involved in the
enhancement of existing  applications and the development of our next generation
of products.  The increases in sales and marketing expenses reflects the cost of
hiring additional sales and marketing  personnel,  the continued  development of
sales  distribution  channels and the expansion of  promotional  activities  and
marketing-related  programs.  In addition,  commission  rates were higher during
1998 as result of sales people  exceeding  their sales  quotas.  The increase in
general and administrative  expenses in absolute dollar terms is attributable to
additional administrative and management personnel, higher professional fees and


                                       27
<PAGE>

additional  infrastructure  to support  the  expansion  of our  operations.  The
increase in net other income is  attributable  to a higher  level of  investment
income  during the year as a result of  earnings  on  proceeds  received  from a
follow-on public stock offering in March 1998.

                                  Income Taxes

   For the year ended  December 31, 1999, we recorded an income tax provision of
$996,000  consisting  solely of current expense  relating to federal and foreign
income taxes. For the year ended December 31, 1998, we recorded a net income tax
benefit of $79,000,  comprised of a deferred tax benefit of $700,000 and current
tax expense of $621,000.  We recorded  current tax expense during 1998 primarily
related to foreign  withholding and alternative  minimum taxes.  During 1997, we
generated pre-tax losses of $7.4 million.

   As of December 31, 1999, the Company has provided a valuation allowance for a
significant  portion of its deferred tax assets.  The total valuation  allowance
increased   $15.4   million  from  December  31,  1998  to  December  31,  1999.
Approximately $15.1 million of the valuation  allowance,  relating to income tax
benefits arising from the exercise of stock options,  will be credited  directly
to  stockholders'  equity and will not be  available  to benefit  the income tax
provision in any future periods.  In 1998, as a result of the intraperiod income
tax allocation provisions of SFAS No. 109, the deferred tax liability related to
the unrealized gain on marketable  securities  decreased the valuation allowance
for  the  deferred  tax  assets  and  was  not  charged  to  accumulated   other
comprehensive income in stockholders' equity for that period.

   As of December 31, 1999, the Company had federal and state net operating loss
carryforwards  of approximately  $47.2 million and $17.0 million,  respectively,
available to offset future regular and alternative  minimum  taxable income.  In
addition,  the Company had federal and state  research  and  development  credit
carryforwards  of  approximately  $3.0 million and $1.2  million,  respectively,
available to offset future tax liabilities.  The Company's federal net operating
loss and tax credit  carryforwards expire in the years 2010 through 2019, if not
utilized.  The state net operating loss  carryforwards  expire in the years 2000
through 2019. The state research and development  credits can be carried forward
indefinitely.  As of December 31, 1999, the Company's  foreign  subsidiaries had
net operating loss carryforwards in foreign  jurisdictions of approximately $4.2
million  that can be used to offset  future  foreign  income.  Of these  losses,
approximately $1.7 million expires in the years 2000 through 2003. Approximately
$2.5 million of these losses can be carried  forward  indefinitely.  Federal and
state tax laws  limit the use of net  operating  loss  carryforwards  in certain
situations where changes occur in the stock ownership of a company.  The Company
believes  such  an  ownership  change,  as  defined,   may  have  occurred  and,
accordingly,  certain of the  Company's  federal  and state net  operating  loss
carryforwards may be limited in their annual usage.

                         Liquidity and Capital Resources

                                                       December 31,
                                           -----------------------------------
      (dollars in thousands)                   1997        1998        1999
                                           ----------- ----------- ------------
      Cash, cash equivalents and
      short-term Investments...........      $10,473     $61,878     $348,581
      Working capital..................      $11,485     $64,320     $340,774
      Working capital ratio............          2.4         4.9          9.6

   As of  December  31,  1999,  cash,  cash  equivalents  and liquid  short-term
investments  totaled  $348.6  million,  which  represents  an increase of $286.7
million as compared to December  31,  1998.  We  currently  have no  significant
capital  commitments other than obligations under equipment and operating leases
and $5.9 million of  outstanding  term debt under our existing  credit  facility
with our commercial bank.

   We have funded our operations by cash  generated  from  operations and public
offerings of our common stock.  Public stock offerings  during June 1996,  March
1998, and November 1999 netted for us proceeds of $20.7  million,  $53.7 million
and $210.4  million,  respectively.  Cash provided by operating  activities  was
$33.3 million for the year ended December 31, 1999 and $1.2 million for the year
ended December 31, 1998. Cash used for operating activities was $8.7 million for
the year ended December 31, 1997.  Cash used for investing  activities was $38.6

                                       28
<PAGE>

million for the year ended  December 31,  1999,  $6.4 million for the year ended
December  31,  1998,  and $3.6  million for the year ended  December  31,  1997.
Investing  activities  consisted  primarily  of  capital  expenditures  and  the
acquisition of strategic investments.  Cash provided by financing activities was
$223.2 million for the year ended December 31, 1999,  $58.8 million for the year
ended  December 31, 1998 and $2.9 million for the year ended  December 31, 1997.
Financing  activities consisted primarily of proceeds from the issuance of stock
and, to a lesser extent, proceeds from borrowings.


                                       29
<PAGE>


Quarterly Results of Operations

   The following tables set forth certain  unaudited  consolidated  statement of
operations  data for the eight quarters ended December 31, 1999, as well as that
data expressed as a percentage of our total revenues for the periods indicated.

   This data has been derived from unaudited  consolidated  financial statements
that, in the opinion of management,  include all adjustments  consisting only of
normal  recurring  adjustments,  necessary  for  a  fair  presentation  of  such
information when read in conjunction with the Consolidated  Financial Statements
and Notes thereto.

<TABLE>

   The unaudited  quarterly  information  should be read in conjunction with the
Consolidated Financial Statements and Notes thereto included elsewhere herein on
this Form 10-K. We believe that  period-to-period  comparisons  of our financial
results  are not  necessarily  meaningful  and should  not be relied  upon as an
indication of future performance.
<CAPTION>

                                                                  Three Months Ended
                              --------------------------------------------------------------------------------------------
                              Mar. 31,    June 30,    Sep. 30,    Dec. 31,   Mar. 31,    June 30,   Sep. 30,    Dec. 31,
                                1998        1998        1998        1998       1999        1999       1999        1999
                              --------    --------    --------    --------   --------    --------   --------    --------
                                                               (dollars in thousands)
<S>                          <C>         <C>         <C>         <C>        <C>         <C>        <C>         <C>
Statement of Operations Data:
Revenues:
  Software licenses..........$  7,279    $  8,018    $  9,158    $ 11,612   $ 12,783    $ 15,484   $ 18,954    $ 28,161
  Services...................   2,800       3,367       4,273       4,404      5,681       7,992     10,877      15,582
                             --------    --------    --------    --------   --------    --------   --------    --------
        Total revenues.......  10,079      11,385      13,431      16,016     18,464      23,476     29,831      43,743
Cost of revenues:
  Cost of software licenses..     187         213         237         364        747       1,037        676       1,243
  Cost of services...........   1,620       2,092       2,553       2,439      3,321       4,624      7,241       9,994
                             --------    --------    --------    --------   --------    --------   --------    --------
        Total cost of
          revenues...........   1,807       2,305       2,790       2,803      4,068       5,661      7,917      11,237
Gross profit.................   8,272       9,080      10,641      13,213     14,396      17,815     21,914      32,506
Operating expenses:
  Research and development...   2,033       2,049       2,394       2,751      2,901       3,268      3,816       4,582
  Sales and marketing........   5,861       6,243       6,285       7,880      7,665      10,019     12,136      19,012
  General and administrative.     824         760         977       1,225      1,271       1,611      2,119       2,969
                             --------    --------    --------    --------   --------    --------   --------    --------
        Total operating
          expenses...........   8,718       9,052       9,656      11,856     11,837      14,898     18,071      26,563
                             --------    --------    --------    --------   --------    --------   --------    --------
Operating income (loss)......    (446)         28         985       1,357      2,559       2,917      3,843       5,943
Other, net...................     (53)        665         769         734        378         398        651       2,120
                             --------    --------    --------    --------   --------    --------   --------    --------
Net income (loss)............$   (499)   $    693    $  1,754    $  2,091   $  2,937    $  3,315   $  4,494    $  8,063
                             ========    ========    ========    ========   ========    ========   ========    ========

As a Percentage of Revenues:
Revenues:
  Software licenses..........      72%         70%         68%         73%        69%         66%        63%         64%
  Services...................      28          30          32          27         31          34         37          36
                             --------    --------    --------    --------   --------    --------   --------    --------
        Total revenues.......     100         100         100         100        100         100        100         100
Cost of revenues:
  Cost of software licenses..       2           2           2           2          4           4          2           3
  Cost of services...........      16          18          19          16         18          20         24          23
                             --------    --------    --------    --------   --------    --------   --------    --------
        Total cost of
          revenues...........      18          20          21          18         22          24         26          26
Gross profit.................      82          80          79          82         78          76         74          74
Operating expenses:
  Research and development...      20          18          18          17         16          14         13          10
  Sales and marketing........      58          55          47          49         41          43         41          44
  General and administrative.       8           7           7           8          7           7          7           7
                             --------    --------    --------    --------   --------    --------   --------    --------
        Total operating
          expenses..........       86          80          72          74         64          64         61          61
                             --------    --------    --------    --------   --------    --------   --------    --------
Operating income (loss)......      (4)         --           7           8         14          12         13          14
Other, net...................      (1)          6           6           5          2           2          2           5
                             --------    --------    --------    --------   --------    --------   --------    --------
Net income (loss)............      (5)%         6%         13%         13%        16%         14%        15%         19%
                             ========    ========    ========    ========   ========    ========   ========    ========
</TABLE>

   Our quarterly operating results have fluctuated in the past and may fluctuate
significantly  in the future as a result of a variety of factors,  many of which
are outside of our control.  It is likely that our  operating  results in one or
more future quarters may be below the  expectations  of securities  analysts and
investors.  In that event,  the trading price of the common stock of BroadVision
almost certainly would decline.

                                       30
<PAGE>

   Factors  that  may  affect  our  quarterly   operating  results  include  the
following:

    o  the timing of  introductions or enhancements of our products and services
       or our competitors;

    o  timing of receipt and fulfillment of significant orders;

    o  market acceptance of new products;

    o  the mix of products sold by us;

    o  changes in our pricing policies or our competitors;

    o  changes in our sales incentive plans;

    o  the budgeting cycles of our customers;

    o  customer order  deferrals in anticipation of new products or enhancements
       by us or our competitors;

    o  nonrenewal of our service agreements (which generally automatically renew
       for one-year terms unless earlier terminated by either party upon 90-days
       notice);

    o  product life cycles;

    o  changes in strategy;

    o  seasonal trends;

    o  the mix of distribution channels through which our products are sold;

    o  the mix of international and domestic sales;

    o  the rate at which new sales people become productive; and

    o  changes in the level of operating expenses to support projected growth.

   In  addition,  we  intend,  in the near term to  increase  significantly  our
personnel,  including  our domestic and  international  direct sales force.  The
timing  of this  expansion  and the  rate  at  which  new  sales  people  become
productive could also cause our quarterly operating results to fluctuate. Due to
these and other factors, it is difficult for us to accurately forecast quarterly
revenues and operating results. We believe that period-to-period  comparisons of
the company's  operating  results may not be meaningful  and you should not rely
upon them as any indication of our future performance.

RECENT ACCOUNTING PRONOUNCEMENTS

   In June 1998,  the Financial  Accounting  Standards  Board,  or FASB,  issued
Statement of Financial  Accounting  Standard,  or SFAS, No. 133,  Accounting for
Derivative  Instruments  and  Hedging  Activities,  as amended by SFAS No.  137,
effective for all fiscal quarters of fiscal years beginning after June 15, 2000.
Accordingly,  we will adopt SFAS No. 133, as  amended,  beginning  on January 1,
2001.  SFAS No. 133  establishes  standards for the  accounting and reporting of
derivative  instruments and hedging  activities,  including  certain  derivative
instruments  embedded  in other  contracts.  Under SFAS No.  133,  entities  are
required  to carry all  derivative  instruments  at fair value on their  balance
sheets.  The accounting for changes in the fair value (i.e., gains or losses) of
a derivative  instrument depends on whether it has been designated and qualifies
as part of a  hedging  activity  and the  underlying  purpose  for it. We do not
believe that the adoption of SFAS No. 133 will have a significant  impact on our
consolidated financial statements or related disclosures.

   In December 1998, the Accounting  Standards  Executive Committee of the AICPA
issued  SOP  98-9  Software  Revenue   Recognition,   With  Respect  to  Certain
Transactions,  which requires recognition of revenue using the "residual method"
in a multiple-element arrangement when fair value does not exist for one or more
of the delivered elements in the arrangement.  Under the "residual method",  the
total  fair value of the  undelivered  elements  is  deferred  and  subsequently
recognized  in  accordance  with SOP 97-2.  There was no material  change to our
revenue accounting as a result of the provisions of SOP 98-9.

   In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting  Bulletin  No. 101 ("SAB  101"),   Revenue  Recognition  in Financial
Statements,   which  provides  guidance  on  the  recognition, presentation, and
disclosure  of  revenue  in  financial  statements  filed  with the SEC. SAB 101
outlines the basic  criteria that must be met to recognize  revenue and provides
guidance for disclosure related to revenue recognition  policies.



                                       31
<PAGE>

We will adopt SAB 101 effective April 1, 2000, as required. We do not expect the
adoption of SAB 101 to have any  material  effect on our  financial  position or
results of operations.

RISK FACTORS

   The risks and uncertainties  described below are not the only ones facing us.
Additional  risks  and  uncertainties  not  presently  known  to us or  that  we
currently deem immaterial also may impair our business operations. If any of the
following risks actually occur, our business could be harmed. In that event, the
trading price of our common stock could decline.

Risks related to our business

   Fluctuations  in  BroadVision's   quarterly   operating   results  may  cause
BroadVision's  stock price to decline and make it difficult for  BroadVision  to
forecast quarterly revenue and operating results.

    Our quarterly  operating  results have in the past fluctuated and may in the
future  fluctuate  significantly  as a result of a variety of  factors,  many of
which are outside of our control. It is likely that our operating results in one
or more future quarters may be below the expectations of securities analysts and
investors.  In that event,  the trading price of the common stock of BroadVision
almost certainly would decline.

   Factors that may affect our quarterly operating results include the
following:

    o  the timing of  introductions or enhancements of our products and services
       or our competitors;

    o  timing of receipt and fulfillment of significant orders;

    o  market acceptance of new products;

    o  the mix of products sold by us;

    o  changes in pricing policies by us or our competitors;

    o  changes in our sales incentive plans;

    o  the budgeting cycles of our customers;

    o  customer order  deferrals in anticipation of new products or enhancements
       by us or our competitors;

    o  nonrenewal  of   BroadVision's   service   agreements   (which  generally
       automatically  renew for one-year  terms  unless  earlier  terminated  by
       either party upon 90-days notice);

    o  product life cycles;

    o  changes in strategy;

    o  seasonal trends;

    o  the mix of distribution channels through which our products are sold;

    o  the mix of international and domestic sales;

    o  the rate at which new sales people become productive; and

    o  changes in the level of operating expenses to support projected growth.

    Due to these and other factors,  it is difficult to accurately  forecast our
quarterly  revenues and  operating  results.  We believe  that  period-to-period
comparisons  of our operating  results may not be meaningful  and you should not
rely upon them as any indication of our future performance.

   Our  success is  substantially  dependent  on revenues  from our  BroadVision
One-to-One Enterprise product suite and related services.

   To date,  substantially all of our revenues have been attributable to license
sales of the  BroadVision  One-To-One  Enterprise  product and related  packaged
application products and associated services. We currently expect these products
and services to account for most of our future  revenues.  The  inability of our
customers  to  successfully  develop  and  deploy  an online  marketplace  using
BroadVision  One-To-One  application  products  could damage our  reputation


                                       32
<PAGE>

and cause a loss of customers.  In addition,  factors  negatively  affecting the
pricing of or demand for the BroadVision One-To-One  application products,  such
as increased competition or rapid technological change, could cause our revenues
to decline.

   Our future  financial  performance  is largely  dependent  on the  successful
upgrading of our current products and introduction of new products.

   Our future  financial  performance will depend,  in significant  part, on the
successful  development and sale of new and enhanced versions of our BroadVision
One-To-One  application  products  and other new  products.  We may be unable to
upgrade and continue to market the BroadVision  One-To-One application products.
We may be unable to  successfully  develop new products and new products may not
achieve market acceptance.

   Our lengthy  sales and product  implementation  cycles  could cause delays in
revenue  recognition  and make it difficult to predict the  company's  quarterly
results.

   Our sales and product  implementation cycles are subject to delays over which
we have  little or no  control.  These  delays  can affect the timing of revenue
recognition  and make it difficult to predict our quarterly  results.  Licensing
the  BroadVision  One-to-One  application  products is often an  enterprise-wide
decision by prospective customers. The importance of this decision requires that
we engage in a lengthy sales cycle with prospective customers.  During the sales
process,  we provide a  significant  level of education  regarding  the uses and
benefits of our  products.  Once the  decision  has been made to  implement  our
products,  our customers or our  Worldwide  Professional  Services  Organization
consultants  then must commit  significant  resources over an extended period of
time. Delays in license transactions due to unusually lengthy sales cycles could
cause our operating results to vary significantly from quarter to quarter.

   The  market  for  our  products  and  services  is in  its  early  stages  of
development and may fail to mature into a sustainable market.

   Our products and services  facilitate online commerce and communication  over
public and private  networks.  The market for these  products and services is in
its early stages of  development  and is rapidly  evolving.  A viable market may
fail to emerge or be sustainable.  We cannot predict the level of demand for and
market acceptance of our products and services,  especially because  acquisition
of our  products  and  services  requires a large  capital or other  significant
resource  commitment.  If the  market for our  products  and  services  does not
continue to mature, we will be unable to execute successfully our business plan.

   Adoption of electronic  commerce and knowledge  management,  particularly  by
those individuals and companies that have  historically  relied upon traditional
means of commerce and communication,  will require a broad acceptance of new and
different methods of conducting business and exchanging information.  Our future
revenues and profits will  substantially  depend on the Internet  being accepted
and widely used for commerce and  communication.  If Internet  commerce does not
continue to grow or grows more slowly than  expected,  our future  revenues  and
profits may not meet our  expectations  or those of  analysts.  In the  emerging
marketplace  of Internet  commerce,  our  products  and  services  involve a new
approach to the conduct of online business. As a result, intensive marketing and
sales efforts may be necessary to educate  prospective  customers  regarding the
uses and benefits of our  products  and  services,  thereby  generating  demand.
Companies that have already invested  substantial  resources in other methods of
conducting  business may be reluctant to adopt a new approach  that may replace,
limit or  compete  with  their  existing  systems.  Similarly,  purchasers  with
established patterns of commerce may be reluctant to alter those patterns or may
otherwise  resist  providing the personal data necessary to support our consumer
profiling capability. In addition, the security and privacy concerns of existing
and  potential  online  purchasers  may  inhibit  the growth of online  business
generally  and  the  market's   acceptance  of  our  products  and  services  in
particular.  Accordingly,  a viable market for our products and services may not
emerge or be sustainable.

   A breach of the encryption technology that we use could expose the company to
liability and harm our reputation, causing a loss of customers.



                                       33
<PAGE>

   If any breach of the security  technology  embedded in our  products  were to
occur,  we would be exposed to  liability  and our  reputation  could be harmed,
which could cause us to lose customers. A significant barrier to online commerce
and   communication   is  the  secure  exchange  of  valuable  and  confidential
information  over public  networks.  We rely on  encryption  and  authentication
technology,  including  public key  cryptography  technology  licensed  from RSA
Security  Inc., to provide the security and  authentication  necessary to effect
the  secure   exchange  of  confidential   information.   Advances  in  computer
capabilities,  new  discoveries in the field of  cryptography or other events or
developments  could cause a breach of the RSA or other algorithms that we use to
protect customer transaction data.

   Our products are especially  susceptible to product  defects because they are
complex.

   Sophisticated  software  products,   like  those  sold  by  us,  may  contain
undetected  errors that will not become  apparent  until after the  products are
introduced or when the volume of provided services increases.

   It is possible that,  despite  testing by us and our  prospective  customers,
errors will be found in our products. Product defects could result in all or any
of the following consequences to our business:

    o  loss of revenues;

    o  delay in market acceptance;

    o  diversion of development resources;

    o  damage to our reputation; or

    o  increased service and warranty costs.

   We are  continuing to  substantially  expand our business and  operations and
will need to manage and  support  this  expansion  effectively  in order for our
business plan to succeed.

   We  have  substantially  expanded  our  business  and  operations  since  its
inception in 1993. We expect to continue to experience  periods of rapid change.
If we are  unable to support  this  growth  effectively,  we will have to divert
additional  resources away from executing our business plan and toward  internal
administration.  Our past  expansion  has placed,  and any future  expansion  is
expected  to place,  significant  demands  on our  administrative,  operational,
financial and other resources.  We expect operating expenses and staffing levels
to increase  substantially in the future.  In particular,  we intend to continue
hiring a  significant  number  of  additional  personnel  this year and in later
years. We also expect to expend  resources on expanding  accounting and internal
management systems and implementing a variety of new systems and procedures.  If
our  revenues do not  increase in  proportion  to our  operating  expenses,  our
management  systems do not expand to meet  increasing  demands or the  company's
management  otherwise fails to support its expansion  effectively,  our business
plan may not succeed.

   We are  dependent  on direct sales  personnel  and  third-party  distribution
channels to achieve revenue growth.

   To date, we have sold our products  primarily through our direct sales force.
Our ability to achieve  significant  revenue  growth in the future  largely will
depend on our  success  in  recruiting  and  training  sufficient  direct  sales
personnel and  establishing  and maintaining  relationships  with  distributors,
resellers  and  systems  integrators.   Our  products  and  services  require  a
sophisticated  sales effort targeted at the senior management of our prospective
customers.  New hires as well as employees of our  distributors,  resellers  and
systems integrators require training and take time to achieve full productivity.
Our recent hires may not become as productive as necessary, and we may be unable
to hire  sufficient  numbers of  qualified  individuals  in the future.  We have
entered  into   strategic   alliance   agreements   with   partners,   including
Hewlett-Packard Company, Sema Group and Security First Network Bank, under which
these  partners  have  agreed to resell  and  support  our  current  BroadVision
One-to-One  product suite.  These  contracts are generally  terminable by either
party upon 30 days' notice of an uncured  material  breach.  Termination  of the
Hewlett-Packard,  Sema, Security First or other similar alliances could harm our
expected revenues.  We may be unable to expand our other distribution  channels,
and any expansion may not result in revenue increases.  If we fail to expand our
direct sales force or other distribution  channels, our revenues may not grow or
they may decline.

   Our customers may rely on third-party  systems integrators for the success of
online marketplaces.

                                       34
<PAGE>

   Our  current  and  prospective  customers  may  rely on  third-party  systems
integrators to develop, deploy and manage online marketplaces.  If we are unable
to adequately train these systems  integrators  who, as a result,  ineffectively
assist  customers with their online  marketplaces,  our reputation may be harmed
and it may lose  customers.  In  addition,  if for any reason a large  number of
these  integrators  adopt a  different  product  or  technology  instead  of the
BroadVision  One-To-One  application  products,  sales of these products may not
grow or they may decline.

   We  are  susceptible  to  numerous  risks   associated   with   international
operations.

   Our international  activities expose us to numerous  additional risks. In the
year ended  December 31, 1999,  approximately  31% of our revenues  were derived
from sales outside of North America.  We have ten offices in Europe and Asia and
one office in Australia.  A key component of our business  strategy is to expand
our  international  activities.  Reflecting  our  commitment  to  a  significant
international  presence, we listed our shares of common stock on the Neuer Markt
segment of the Frankfurt Stock Exchange beginning on November 3, 1999.

   As We continue to expand internationally,  we will be increasingly subject to
risks of doing business internationally, including:

    o  unexpected changes in regulatory requirements;

    o  export  controls  relating  to  encryption  technology  and other  export
       restrictions;

    o  tariffs and other trade barriers;

    o  difficulties in staffing and managing foreign operations;

    o  political and economic instability;

    o  fluctuations in currency exchange rates;

    o  reduced protection for intellectual property rights in some countries;

    o  cultural barriers;

    o  seasonal  reductions  in business  activity  during the summer  months in
       Europe and certain other parts of the world; and

    o  potentially adverse tax consequences.

   Our international  sales growth will be limited if we are unable to establish
additional foreign operations, expand international sales channel management and
support,  hire additional  personnel,  customize  products for local markets and
develop  relationships  with international  service providers,  distributors and
system integrators. Even if we are able to successfully expand our international
operations,  we may not succeed in maintaining or expanding international market
demand for our products.

         Our  success  and  competitive  position  will depend on our ability to
protect our proprietary technology.

   It will be  essential  to the  success  of our  business  that we  adequately
protect our proprietary  technology.  Although we hold a U.S. patent,  issued in
January 1998, on elements of the BroadVision One-To-One Enterprise product, this
patent may not provide an adequate level of intellectual property protection. We
also  rely  on  copyright,  trade  secret  and  trademark  laws to  protect  our
technology.  We have registered  "BroadVision"  and "BroadVision  One-To-One" as
trademarks in the United  States.  It is possible that our  competitors or other
companies  will adopt product names  similar to these  trademarks,  impeding our
ability to build brand identity and possibly confusing customers. We provide our
products to end users generally  under  nonexclusive,  nontransferable  licenses
during the term of the relevant  agreement,  which is usually in perpetuity.  We
make the source code available for some portions of our products. We protect the
source  code  for our  proprietary  software  both as a  trade  secret  and as a
copyrighted  work.  However,   disclosing  the  source  code  may  increase  the
likelihood of third-party misappropriation.

   As a matter of company policy, We enter into  confidentiality  and assignment
agreements with our employees,  consultants and vendors.  We also control access
to  and   distribution  of  our  software,   documents  and  other   proprietary
information.  Notwithstanding  these  precautions,  it  may be  possible  for an
unauthorized  third party to copy or  otherwise  obtain and use our  software or
other  proprietary  information or to develop  similar  software  independently.
Policing  unauthorized  use of our  products  will  be  difficult,  particularly
because the global  nature of the  Internet  makes it  difficult  to control the
ultimate  destination  or security of software and other  transmitted  data. The
laws of other  countries may afford us little or no effective  protection of our
intellectual  property.  The steps we have taken to prevent



                                       35
<PAGE>

misappropriation of our technology,  including entering into agreements for that
purpose,  may be insufficient.  In addition,  litigation may be necessary in the
future to  enforce  our  intellectual  property  rights,  to  protect  our trade
secrets, to determine the validity and scope of the proprietary rights of others
or to defend against claims of infringement or invalidity. Litigation like this,
whether  successful  or  unsuccessful,  could  result in  substantial  costs and
diversions of our management resources, either of which could harm our business.

   We will be subject to claims of  intellectual  property  infringement,  which
could divert management resources, cause product delays or require that we enter
into licensing or royalty agreements.

    Third  parties may claim that we have  infringed  their  patent,  trademark,
copyright or other  proprietary  rights. It is also possible that claims will be
made  for  indemnification  resulting  from  allegations  of  infringement.   In
addition,  intellectual  property infringement claims may be asserted against us
as a result  of the use by us,  our  customers  or other  third  parties  of our
products for the  transmission,  dissemination  or display of information on the
Internet.  Any claims,  with or without merit, could be time consuming,  costly,
cause product shipment delays or require that we enter into royalty or licensing
agreements.  These  licenses might not be available on reasonable  terms,  or at
all.

   The loss or malfunction of technology licensed from third parties could delay
the introduction of our products and services.

   We rely in part on technology  that we license from third parties,  including
relational  database  management  systems from  Sybase,  object  request  broker
software from IONA  Technologies PLC, database access technology from Rogue Wave
Software Inc. and other  software.  We integrate or sublicenses  this technology
with internally  developed software to perform key functions.  For example,  our
products and services incorporate data encryption and authentication  technology
licensed  from RSA.  Third-party  technology  licenses  might not continue to be
available to us on  commercially  reasonable  terms,  or at all.  Moreover,  the
licensed technology may contain defects that we cannot control.  The loss of any
of these  technology  licenses could cause delays in introducing our products or
services until equivalent technology, if available, is identified,  licensed and
integrated.  Delays in  introducing  our products  and  services  could harm our
business.

   Our  executive  officers,  key  employees  and highly  skilled  technical and
managerial personnel are critical to our business,  and they may not remain with
us in the future.

   Our performance will substantially depend on the performance of our executive
officers  and key  employees.  We also will rely on our  ability  to retain  and
motivate  qualified  personnel,  especially  our  management  and highly skilled
development  teams. The loss of the services of any of our executive officers or
key employees,  particularly our founder and Chief Executive Officer, Dr. Pehong
Chen,  could cause us to incur  increased  operating  expenses and divert senior
management  resources in searching for replacements.  The loss of their services
also could harm our reputation if our customers were to become  concerned  about
our future  operations.  We do not carry "key person" life insurance policies on
any of our employees.  Our future success also depends on our continuing ability
to  identify,  hire,  train and retain  other  highly  qualified  technical  and
managerial personnel.  Competition for these personnel is intense, especially in
the Internet  industry.  We have in the past  experienced  and will  continue to
experience  difficulty  in hiring  and  retaining  sufficient  numbers of highly
skilled employees.

   Current and potential  competitors  could make it difficult for us to acquire
and retain customers now and in the future.

   If we fail to compete successfully with current or future competitors, we may
lose market share.  The market for e-business  solutions is rapidly evolving and
intensely competitive.  Our customers' requirements and the technology available
to satisfy those requirements will continually  change. We expect competition in
this market to persist  and  increase  in the  future.  Our primary  competition
currently includes:

    o  in-house development efforts by prospective customers or partners;

                                       36
<PAGE>


    o  other  vendors  of  application   software  or  application   development
       platforms  and tools  directed  at  interactive  commerce  and  financial
       services, such as Art Technology Group Inc., InterWorld Corporation, Open
       Market, Inc. and Vignette Corporation;

    o  Web content  developers  that develop custom  software or integrate other
       application software into custom solutions;

    o  International Business Machines Corporation; and

    o  Microsoft Corporation.

   Compared to us, many of these and other current and future  competitors  have
longer  operating  histories and  significantly  greater  financial,  technical,
marketing and other resources than those of us. As a result, they may be able to
respond more quickly to new or changing opportunities, technologies and customer
requirements.   Many  of  these  companies  also  can  use  their  greater  name
recognition  and  more  extensive  customer  base to gain  market  share  at our
expense.  Competitors  may be  able  to  undertake  more  extensive  promotional
activities,  adopt more  aggressive  pricing  policies and offer more attractive
terms to purchasers. Current and potential competitors may bundle their products
to discourage users from purchasing our products. In addition,  competitors have
established or may establish cooperative  relationships among themselves or with
third parties to enhance their  products.  Accordingly,  it is possible that new
competitors  or  alliances  among  competitors  may emerge and  rapidly  acquire
significant market share.  Competitive pressures may make it difficult for us to
acquire  and  retain  customers  and may  require  us to reduce the price of our
products.  We  may  be  unable  to  compete  successfully  with  current  or new
competitors.

   Limitations on the online collection of profile  information could impair the
effectiveness of our products.

   Online users' resistance to providing  personal data and laws and regulations
prohibiting  use of personal data gathered  online  without  express  consent or
requiring  businesses  to  notify  their  Web  site  visitors  of  the  possible
dissemination  of their  personal  data  could  limit the  effectiveness  of our
products.

   One of the  principal  features  of the  BroadVision  One-To-One  application
products  is the  ability to develop and  maintain  profiles of online  users to
assist business managers in determining the nature of the content to be provided
to  these  online  users.  Typically,   profile  information  is  captured  when
consumers,  business  customers  and  employees  visit a Web site and  volunteer
information  in  response  to survey  questions  concerning  their  backgrounds,
interests  and  preferences.  Profiles  can be  augmented  over time through the
subsequent collection of usage data.

   Although   BroadVision   One-To-One  products  are  designed  to  enable  the
development  of  applications  that  permit Web site  visitors  to  prevent  the
distribution  of any of their  personal  data  beyond  that  specific  Web site,
privacy  concerns  may  nevertheless  cause  visitors  to resist  providing  the
personal  data  necessary  to  support  this  profiling  capability.   The  mere
perception  by  prospective  customers  that  substantial  security  and privacy
concerns exist among online users,  whether or not valid, may indirectly inhibit
market acceptance of our products.  In addition,  new laws and regulations could
heighten privacy concerns by requiring  businesses to notify Web site users that
the data  captured  from them while online may be used by marketing  entities to
direct product messages to them.

   While we are not  aware of any laws or  regulations  like this  currently  in
effect or in  development in the United  States,  other  countries and political
entities, including the European Union and our member states, have adopted legal
requirements  imposing  restrictions  on the  collection,  use and processing of
personal data. It is possible that similar legal  requirements  could be adopted
in the United  States.  If the privacy  concerns of consumers are not adequately
addressed,  the effectiveness of the BroadVision One-to-One application products
could be impaired.

   If we are unable to meet the rapid  technological  changes in online commerce
and communication, our products and services may fail to be competitive.

   Our products and services may fail to be competitive if we do not maintain or
exceed  the  pace  of  technological   developments  in  Internet  commerce  and
communication.  The information services, software and communications industries
are   characterized  by  rapid   technological   change,   changes  in  customer
requirements,  frequent new product and service  introductions  and enhancements
and evolving industry standards and practices.  The introduction of



                                       37
<PAGE>

products  and  services  embodying  new  technologies  and the  emergence of new
industry  standards  and  practices  can render  existing  products and services
obsolete. Our future success will depend, in part, on our ability to:

    o  develop leading technologies;

    o  enhance our existing products and services;

    o  develop  new  products  and  services   that  address  the   increasingly
       sophisticated and varied needs of our prospective customers; and

    o  respond to  technological  advances and emerging  industry  standards and
       practices on a timely and cost-effective basis.

   Internet commerce technology is complex and new products and enhancements can
require long development  periods. If we are unable to develop and introduce new
products and services or enhancements in a timely manner in response to changing
market conditions or customer  requirements,  or if new products and services do
not achieve market acceptance, our business may fail to be competitive.

   New and  existing  laws  could  either  directly  restrict  our  business  or
indirectly affect our business by limiting the growth of Internet commerce.

   The adoption of any laws or  regulations  that  restrict our methods of doing
business  or limit the  growth of the  Internet  could  decrease  demand for our
products and services and increase our cost of doing business.  Today, there are
relatively few laws specifically directed towards online services.

   However,  due to the  increasing  popularity  of the Internet  generally  and
Internet  commerce  specifically,  we  expect  that  federal,  state or  foreign
agencies will enact laws and regulations with respect to the Internet. These new
laws and regulations would be likely to address issues like online user privacy,
pricing,  content and quality of products and services.  If enacted,  these laws
and regulations could limit the market for our products and services.

   For example,  because our products  involve the solicitation of personal data
regarding individual consumers, our business could be limited by laws regulating
the solicitation,  collection or processing of this data. The Telecommunications
Act of 1996 prohibits the  transmission of some types of information and content
over the Internet.  The prohibition's scope and the liability  associated with a
Telecommunications  Act violation are currently unsettled.  Legislation imposing
potential liability upon us for information  carried on or disseminated  through
our products  would likely  cause the company to  implement  costly  measures to
reduce our exposure to this liability or to discontinue some of our services.

   Our business could be harmed by the expense involved in reacting to actual or
potential  liability  associated  with  the   Telecommunications  Act  or  other
Internet-related  laws and  regulations.  In addition,  the increased  attention
focused upon liability  issues as a result of the  Telecommunications  Act could
limit the growth of  Internet  commerce,  which  could  decrease  demand for our
products.

   The United States government  regulates the export of encryption  technology,
which our products incorporate. Export regulations, either in their current form
or as may be  subsequently  enacted,  may limit our  ability to  distribute  our
software outside the United States. Any revocation or modification of our export
authority  or  adoption  of new laws or  regulations  relating  to the export of
software and encryption technology could limit our international operations. The
unlawful export of our software could also harm our reputation. Although we take
precautions against unlawful export of their software,  the global nature of the
Internet makes it difficult to effectively control the distribution of software.

   The  imposition  of sales and other taxes on products  sold by our  customers
over the  Internet  could have a negative  effect on online  commerce  and, as a
result, on demand for our products.

   The imposition of new sales or other taxes could limit the growth of Internet
commerce generally and, as a result, the demand for our products. Recent federal
legislation  limits the imposition of state and local taxes on  Internet-related
sales.  In 1998,  Congress  passed the Internet Tax Freedom Act,  which places a
three-year moratorium on state and local taxes on:



                                       38
<PAGE>

    o  Internet  access,  unless the tax was already imposed prior to October 1,
       1998; and

    o  discriminatory taxes on electronic commerce.

   There is a possibility  that Congress may not renew this legislation in 2001.
If Congress chooses not to renew this  legislation,  state and local governments
would be free to impose taxes on electronically purchased goods.

   We  believes  that,  in  accordance  with  current  industry  practice,  most
companies that sell products over the Internet do not currently collect sales or
other taxes on  shipments  of their  products  into states or foreign  countries
where they are not physically  present.  However,  one or more states or foreign
countries  may seek to  impose  sales  or other  tax  collection  obligation  on
out-of-jurisdiction companies that engage in electronic commerce.

   A  successful  assertion  by one or more  states or  foreign  countries  that
companies engaged in electronic  commerce should collect sales or other taxes on
the sale of their products over the Internet, even though not physically present
in the  state  or  foreign  country,  could  indirectly  reduce  demand  for our
products.

Our stock price has been and is likely to continue to be highly volatile.

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

    o  quarterly variations in operating results;

    o  announcements of technological innovations;

    o  announcements of new software or services by us or our competitors;

    o  changes in financial estimates by securities analysts; or

    o  other events or factors that are beyond our control.

   In addition,  the stock market has experienced  significant  price and volume
fluctuations  that  have  particularly  affected  the  trading  prices of equity
securities of many high technology companies. These fluctuations have often been
unrelated or disproportionate to the operating performance of these companies.

   Any negative  change in the public's  perception of the prospects of Internet
or electronic commerce companies could depress our stock price regardless of our
results.  Other broad market  fluctuations may decrease the trading price of our
common stock. In the past, following declines in the market price of a company's
securities, securities class action litigation has often been instituted against
that company.  Litigation  could result in substantial  costs and a diversion of
management's attention and resources.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         Our  exposure  to market risk for  changes in  interest  rates  relates
primarily  to  our  investment   portfolio.   We  had  no  derivative  financial
instruments  as of  December  31,  1998 and 1999.  We place our  investments  in
instruments  that meet high credit  quality  standards  and the amount of credit
exposure to any one issue,  issuer and type of instrument is limited.  We do not
expect any material loss with respect to our investment portfolio.

         Our financial instrument holdings as of December 31, 1999 were analyzed
to determine  their  sensitivity  to interest rate changes.  In our  sensitivity
analysis, we assumed an adverse change in interest rates of 500 basis points and
the expected effect on net income was insignificant.

                                       39
<PAGE>


ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                        REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and Stockholders of BroadVision, Inc.:

   We have audited the accompanying  consolidated  balance sheet of BroadVision,
Inc. (a Delaware  corporation) and subsidiaries as of December 31, 1999, and the
related consolidated  statements of operations,  stockholders'  equity, and cash
flows for the year then ended. 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 audit.

   We  conducted  our audit in  accordance  with  auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audit provides 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 BroadVision,
Inc.  and  subsidiaries  as of  December  31,  1999,  and the  results  of their
operations  and their  cash  flows for the year then  ended in  conformity  with
accounting principles generally accepted in the United States.

                                            Arthur Andersen LLP

San Jose, California

January 24,  2000,  except with  respect
 to the matter  discussed in the section
 entitled "Stock Splits" in Note 1,
 as to which the date is March 13, 2000.


                                       40
<PAGE>



                        REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and Stockholders of BroadVision, Inc.:

   We have audited the accompanying  consolidated  balance sheet of BroadVision,
Inc. and  subsidiaries  as of December 31,  1998,  and the related  consolidated
statements of operations,  stockholders'  equity, and cash flows for each of the
years in the  two-year  period  ended  December  31,  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  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

   In our  opinion,  the  consolidated  financial  statements  referred to above
present fairly, in all material respects, the financial position of BroadVision,
Inc.  and  subsidiaries  as of  December  31,  1998,  and the  results  of their
operations  and their  cash flows for each of the years in the  two-year  period
ended  December 31, 1998,  in  conformity  with  generally  accepted  accounting
principles.

                                              KPMG LLP

Mountain View, California
January 26, 1999,  except as to the section of Note 1
 entitled  "Stock  Splits," which is as of March 13, 2000


                                       41
<PAGE>


<TABLE>
                                                BROADVISION, INC. AND SUBSIDIARIES
                                                    CONSOLIDATED BALANCE SHEETS
                                             (in thousands, except per share amounts)
<CAPTION>

                                                                                                              December 31,
                                                                                                      ---------------------------
                                                                                                        1998               1999
                                                                                                      ---------         ---------
<S>                                                                                                   <C>               <C>
ASSETS
Current assets:
  Cash and cash equivalents                                                                           $  61,878         $ 279,823
  Short-term investments                                                                                   --              68,758
  Accounts receivable, less allowance for doubtful accounts of $788 and $1,446
   as of December 31, 1998 and 1999, respectively                                                        15,361            26,540
  Prepaids and other                                                                                      2,889             5,085
                                                                                                      ---------         ---------
          Total current assets                                                                           80,128           380,206
Property and equipment, net                                                                               8,034            16,751
Long-term investments                                                                                    11,546             4,414
Deferred tax assets                                                                                         700              --
Other assets                                                                                              1,154             4,757
                                                                                                      ---------         ---------
          Total assets                                                                                $ 101,562         $ 406,128
                                                                                                      =========         =========

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:

  Accounts payable                                                                                    $   2,243         $   5,754
  Accrued expenses                                                                                        4,933            13,307
  Unearned revenue                                                                                        1,918             3,896
  Deferred maintenance                                                                                    6,157            15,228
  Current portion of capital lease obligations                                                              709               270
  Current portion of long-term debt                                                                         548               977
                                                                                                      ---------         ---------
          Total current liabilities                                                                      16,508            39,432
Capital lease obligations, net of current portion                                                           270              --
Long-term debt, net of current portion                                                                    2,924             4,875
Deferred tax liabilities                                                                                   --              16,618
Other liabilities                                                                                            51                15
                                                                                                      ---------         ---------
          Total liabilities                                                                              19,753            60,940
                                                                                                      ---------         ---------

Commitments (Note 7)

Stockholders' equity:
  Convertible preferred stock, $0.0001 par value;
     10,000 shares authorized; none issued and outstanding                                                 --                --
  Common stock, $0.0001 par value; 500,000 shares
   authorized; 223,164 and 244,812 shares issued and
   outstanding as of December 31, 1998 and 1999, respectively                                                21                24
  Additional paid-in capital                                                                             98,748           320,259
  Deferred compensation                                                                                    (555)             (226)
  Accumulated other comprehensive income                                                                  3,198            25,925
  Accumulated deficit                                                                                   (19,603)             (794)
                                                                                                      ---------         ---------
          Total stockholders' equity                                                                     81,809           345,188
                                                                                                      ---------         ---------
          Total liabilities and stockholders' equity                                                  $ 101,562         $ 406,128
                                                                                                      =========         =========
<FN>

                      The accompanying notes are an integral part of these consolidated financial statements
</FN>
</TABLE>


                                       42
<PAGE>


                       BROADVISION, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)

                                                   Years Ended December 31,
                                             -----------------------------------
                                                1997         1998         1999
                                             ---------    ---------    ---------

Revenues:
  Software licenses                          $  18,973    $  36,067    $  75,383
  Services                                       8,132       14,844       40,131
                                             ---------    ---------    ---------
          Total revenues                        27,105       50,911      115,514

Cost of revenues:
  Cost of license revenues                       1,664        1,001        3,703
  Cost of services revenues                      4,284        8,704       25,108
                                             ---------    ---------    ---------
      Total cost of revenues                     5,948        9,705       28,811
                                             ---------    ---------    ---------
          Gross profit                          21,157       41,206       86,703
Operating expenses:
  Research and development                       7,392        9,227       14,568
  Sales and marketing                           18,413       26,269       48,903
  General and administrative                     2,990        3,786        7,970
                                             ---------    ---------    ---------
      Total operating expenses                  28,795       39,282       71,441
                                             ---------    ---------    ---------
         Operating income (loss)                (7,638)       1,924       15,262
Other income, net                                  265        2,036        4,543
                                             ---------    ---------    ---------
          Income (loss) before income taxes     (7,373)       3,960       19,805
Income tax provision (benefit)                    --            (79)         996
                                             ---------    ---------    ---------
          Net income (loss)                  $  (7,373)   $   4,039    $  18,809
                                             =========    =========    =========


Basic earnings (loss) per share              $   (0.04)   $    0.02    $    0.08
                                             =========    =========    =========
Diluted earnings (loss) per share            $   (0.04)   $    0.02    $    0.07
                                             =========    =========    =========

Shares used in computing basic
  earnings (loss) per share                    181,872      210,114      229,128
                                             =========    =========    =========
Shares used in computing diluted
  earnings (loss) per share                    181,872      230,877      260,712
                                             =========    =========    =========



        The accompanying notes are an integral part of these consolidated
                              financial statements


                                       43
<PAGE>

<TABLE>



                                               BROADVISION, INC. AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                            (in thousands, except per share amounts)


                                                      Convertible                                                       Accumulated
                                                    Preferred Stock          Common Stock     Additional                    Other
                                               ---------------------  ---------------------    Paid-in     Deferred   Comprehensive
                                              Shares      Amount      Shares       Amount      Capital   Compensation     Income
                                              ------      ------      ------       ------      -------   ------------     ------
<S>                                           <C>         <C>        <C>        <C>           <C>          <C>           <C>
Balances as of December 31, 1996                  --          --     179,172          18        39,300      (2,033)            --
Net loss and comprehensive loss                   --          --          --          --            --          --             --

Issuance of common stock under employee
  stock purchase plan                             --          --       2,178          --           979          --             --
Issuance of common stock from exercise of
  options                                         --          --       2,295          --            81          --             --
Common stock repurchased                          --          --        (558)         --           (10)         --             --
Amortization of deferred compensation             --          --          --          --            --         428             --
                                              ------     -------      ------    --------      --------     -------       --------
Balances as of December 31, 1997                  --          --     183,087          18        40,350      (1,605)            --
Comprehensive income:
 Net income
 Unrealized gain on equity securities                                                                                       3,198

       Total comprehensive income

Issuance of common stock from public
offering, net of costs                            --          --      31,104           3        53,742          --             --
Issuance of common stock for long-term
  investments                                     --          --       1,107          --         1,322          --             --
Issuance of common stock from exercise of
  warrants                                        --          --         261          --            --          --             --
Issuance of common stock under employee
  stock purchase plan                             --          --       2,052          --         1,599          --             --
Issuance of common stock from exercise of
  options                                         --          --       5,697          --         2,190          --             --

Common stock repurchased                          --          --        (144)         --            (2)         --             --
Deferred compensation forfeited due to
  voluntary termination                           --          --          --          --          (693)        693             --

Deferred compensation on stock options            --          --          --          --           240        (240)            --
Amortization of deferred compensation             --          --          --          --            --         597             --
                                              ------     -------      ------    --------      --------     -------       --------
Balances as of December 31, 1998                  --          --     223,164          21        98,748        (555)         3,198
Comprehensive income:
 Net income
 Unrealized gain on equity securities, net
  of $17,318 tax                                                                                                           22,727

       Total comprehensive income

Issuance of common stock under employee
  stock purchase plan                             --          --       1,833          --         3,928          --             --

Issuance of common stock from exercise of
  options                                         --          --      10,038          --         7,201          --             --

Issuance of common stock from public
 offering, net of costs of $2,285                 --          --       9,315           3       210,376          --             --

Issuance of common stock from exercise of
  warrant                                         --          --         462          --             6          --             --

Amortization of deferred compensation             --          --          --          --            --         329             --
                                              ------     -------     -------    --------      --------     -------       --------
Balances as of December 31, 1999                  --          --     244,812    $     24      $320,259     $  (226)      $ 25,925
                                              ======      ======   =========    ========      ========     =======       ========

</TABLE>

<TABLE>
<CAPTION>


                                                                                 Total
                                                Accumulated Comprehensive   Stockholders'
                                                  Deficit    Income (loss)     Equity
                                                  -------    -------------     ------
<S>                                                <C>         <C>              <C>

Balances as of December 31, 1996                  (16,269)                      21,016
Net loss and comprehensive loss                    (7,373)     $ (7,373)        (7,373)
                                                               ========
Issuance of common stock under employee
  stock purchase plan                                  --                          979
Issuance of common stock from exercise of
  options                                              --                           81
Common stock repurchased                               --                          (10)
Amortization of deferred compensation                  --                          428
                                                 --------                     --------
Balances as of December 31, 1997                  (23,642)                      15,121
Comprehensive income:
 Net income                                         4,039      $  4,039          4,039
 Unrealized gain on equity securities                             3,198          3,198
                                                               --------
       Total comprehensive income                              $  7,237
                                                               ========
Issuance of common stock from public
offering, net of costs                                 --                       53,745
Issuance of common stock for long-term
  investments                                          --                        1,322
Issuance of common stock from exercise of
  warrants                                             --                           --
Issuance of common stock under employee
  stock purchase plan                                  --                        1,599

Issuance of common stock from exercise of
  options                                              --                        2,190

Common stock repurchased                               --                           (2)
Deferred compensation forfeited due to
voluntary termination                                  --                           --

Deferred compensation on stock options                 --                           --
Amortization of deferred compensation                  --                          597
                                                 --------                     --------
Balances as of December 31, 1998                  (19,603)                      81,809
Comprehensive income:
 Net income                                        18,809      $ 18,809         18,809
 Unrealized gain on equity securities, net                       22,727         22,727
  of $17,318 tax                                               --------

       Total comprehensive income                              $ 41,536
                                                               ========
Issuance of common stock under employee
  stock purchase plan                                  --                        3,928

Issuance of common stock from exercise of
  options                                              --                        7,201

Issuance of common stock from public
 offering, net of costs of $2,285                      --                      210,379

Issuance of common stock from exercise of              --                            6
warrant

Amortization of deferred compensation                  --                          329
                                                 --------                     --------
Balances as of December 31, 1999                 $   (794)                    $347,288
                                                 ========                     ========

<FN>
                     The accompanying notes are an integral part of these consolidated financial statements

</FN>
</TABLE>



                                       44
<PAGE>


<TABLE>

                       BROADVISION, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

                                                                 Years Ended December 31,
                                                          -----------------------------------
                                                             1997         1998         1999
                                                          ---------    ---------    ---------

<S>                                                       <C>          <C>          <C>
Cash flows from operating activities:
  Net income (loss)                                       $  (7,373)   $   4,039    $  18,809
  Adjustments to reconcile net income (loss) to net
     cash  provided by (used for) operating activities:
  Depreciation and amortization                               1,613        2,947        4,739
  Amortization of deferred compensation                         428          597          329
  Provision for doubtful accounts                               515          458          758
  Revenue resulting from non-monetary transactions             --         (2,917)        --
  Amortization of prepaid royalties                            --            250          333
  Amortization of prepaid compensation                         --           --            182
  Changes in operating assets and liabilities, net
     of effects  from acquired business:
    Accounts receivable                                      (5,966)      (7,036)     (11,368)
    Prepaid expenses and other                                 (194)      (2,716)        (403)
    Accounts payable and accrued expenses                       547        3,145       11,602
    Unearned revenue and deferred maintenance                 1,751        2,633       10,930
  Increase in other noncurrent assets                          --           (237)      (2,565)
                                                          ---------    ---------    ---------
        Net cash provided by (used for) operating
          activities                                         (8,679)       1,163       33,346
                                                          ---------    ---------    ---------
Cash flows from investing activities:
  Purchase of property and equipment                         (4,878)      (4,198)     (13,291)
  Purchase of long-term investments                            --         (3,000)      (1,414)
  Payment for business acquisition, net of cash                --           --         (3,765)
     acquired
  Purchase of short-term investments                           (796)        --        (72,783)
  Maturity of short-term investments                          2,112          796       52,667
                                                          ---------    ---------    ---------
        Net cash used for investing activities               (3,562)      (6,402)     (38,586)
                                                          ---------    ---------    ---------
Cash flows from financing activities:
  Proceeds from sale/leaseback                                  987         --           --
  Net change in restricted cash                              (1,400)       1,400         --
  Proceeds from borrowings                                    2,651        1,424        3,000
  Repayments of borrowings                                     --           (603)        (620)
  Payments on capital lease obligations                        (378)        (913)        (709)
  Proceeds from issuance of common stock, net                 1,050       57,532      221,514
                                                          ---------    ---------    ---------
        Net cash provided by financing activities             2,910       58,840      223,185
                                                          ---------    ---------    ---------
Net increase (decrease) in cash and cash equivalents         (9,331)      53,601      217,945
Cash and cash equivalents, beginning of period               17,608        8,277       61,878
                                                          ---------    ---------    ---------
Cash and cash equivalents, end of period                  $   8,277    $  61,878    $ 279,823
                                                          =========    =========    =========


Supplemental cash flow disclosures:
  Cash paid for interest                                  $     108    $     394    $     404
  Cash paid for income taxes                                    156          428          538
  Long-term investments reclassified as current                --           --         48,642
  Prepaids and other assets acquired through
     non-monetary transactions                                 --          1,250         --
  Investments acquired through non-monetary
    transactions                                               --          4,025         --
  Unearned revenue and deferred maintenance from non-
    monetary transactions                                      --          2,358         --
  Equipment acquired under capital leases                     1,165          316         --
  Long-term investment acquired in exchange for
     common stock                                              --          1,322         --
  Deferred compensation on stock options                       --            240         --
  Deferred compensation forfeited due to voluntary
    terminations                                               --            693         --
  Net unrealized gain on equity investments                    --          3,198       22,727


<FN>

   The accompanying notes are an integral part of these consolidated financial statements
</FN>
</TABLE>

                                       45
<PAGE>


                       BROADVISION, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                December 31, 1999

Note 1 -- Organization and Summary of Significant Accounting Policies

Nature of Business

   BroadVision,  Inc.  (collectively  with its subsidiaries,  the "Company") was
incorporated  in the state of Delaware on May 13,  1993.  The Company  develops,
markets and supports  application software solutions  specifically  designed for
one-to-one  relationship   management  across  an  extended  enterprise.   These
solutions  enable  businesses  to use the  Internet  as a  platform  to  conduct
electronic  commerce,  provide online customer  self-service,  deliver  targeted
information to constituents and provide online financial services. Each of these
capabilities  can  be  made  available  to  all  constituents  of  the  extended
enterprise,   including:   customers,   suppliers,  partners,  distributors  and
employees.  The  BroadVision  One-To-One  product suite  empowers  businesses to
uniquely tailor Web site content to the needs and interests of individual  users
by personalizing each constituent's visit on a real-time  interactive basis. The
Company's  applications  accomplish  this by  interactively  capturing  Web site
visitor profile  information and targeting organized content of an enterprise to
each visitor based on easily constructed business rules.

Basis of Presentation and Use of Estimates

   The accompanying  consolidated  financial  statements include the accounts of
the Company and its  wholly-owned  subsidiaries.  All  significant  intercompany
accounts and transactions have been eliminated in consolidation. The preparation
of consolidated  financial  statements in conformity with accounting  principles
generally  accepted in the United  States  requires  management  to make certain
assumptions and estimates that affect reported amounts of assets and liabilities
as of the date of the financial  statements and the reported amounts of revenues
and expenses  during the  reporting  period.  Actual  results  could differ from
estimates.

Revenue Recognition

   The Company's revenue  recognition  policies are in accordance with Statement
of Position ("SOP") 97-2, Software Revenue Recognition,  as amended. In general,
software license revenues are recognized when a non-cancelable license agreement
has been signed and the customer  acknowledges  an  unconditional  obligation to
pay,  the  software  product  has been  delivered,  there  are no  uncertainties
surrounding  product  acceptance,  the  fees are  fixed  and  determinable,  and
collection is considered probable; professional services revenues are recognized
as such services are performed;  and maintenance  revenues,  including  revenues
bundled  with  software  agreements  which  entitle the  customers  to technical
support and future  unspecified  enhancements  to the  Company's  products,  are
deferred and  recognized  ratably over the related  contract  period,  generally
twelve months.  Revenues recognized from multiple-element  software arrangements
are allocated to each element of the arrangement based on the fair values of the
elements,  such as software  products,  upgrades,  enhancements,  post  contract
customer support,  installation, or training. The determination of fair value is
based on objective evidence which is specific to the Company.

   The Company records unearned revenue for software  arrangements when cash has
been received from the customer and the arrangement does not qualify for revenue
recognition under the Company's revenue  recognition policy. The Company records
accounts receivable for software arrangements when the arrangement qualifies for
revenue  recognition and cash or other  consideration has not been received from
the customer.

   In December 1998,  AcSEC issued SOP 98-9 Software Revenue  Recognition,  With
Respect to Certain Transactions, which requires recognition of revenue using the
"residual  method" in a  multiple-element  arrangement  when fair value does not
exist for one or more of the delivered  elements in the  arrangement.  Under the
"residual method",  the total fair value of the undelivered elements is deferred
and  subsequently  recognized in accordance with SOP 97-2. There was no material
change to the Company's accounting for revenues as a result of the provisions of
SOP 98-9.



                                       46
<PAGE>

Research and Development and Software Development Costs

   Under the criteria set forth in Statement of Financial  Accounting  Standards
("SFAS")  No. 86,   Accounting  for the Cost of  Computer  Software  to be Sold,
leased or Otherwise  Marketed,   development  costs incurred in the research and
development   of  new  software   products   are  expensed  as  incurred   until
technological feasibility in the form of a working model has been established at
which time such costs are capitalized,  subject to recoverability.  Products are
made  available  for  limited  release,   concurrent  with  the  achievement  of
technological  feasibility.  Accordingly,  software  development  costs incurred
subsequent  to the  establishment  of  technological  feasibility  have not been
significant,  and the Company has not capitalized any software development costs
to date.

Prepaid Royalties

   Prepaid royalties  relating to purchased software to be incorporated and sold
with the Company's  software  products are amortized as a cost of revenue either
on a straight-line  basis over the remaining term of the royalty agreement or on
the  basis  of  projected  product   revenues,   whichever  results  in  greater
amortization.

Cash and Cash Equivalents

   The Company considers all debt securities with remaining  maturities of three
months or less at the date of purchase  to be cash  equivalents.  The  Company's
cash equivalents consisted of the following (in thousands):

                                                       December 31,
                                                  ---------------------
                                                    1998         1999
                                                  --------     --------
           Cash                                   $  1,978     $ 16,945
           Money market funds..............         48,900      125,807
           Commercial paper................         11,000      137,071
                                                  --------     --------
                                                  $ 61,878     $279,823
                                                  ========     ========

Short-term Investments

   The Company's  short-term  investments  consist of marketable equity and debt
securities that are classified as  available-for-sale.  The Company's investment
in marketable equity securities is carried at fair value with related unrealized
gains or  losses  reported  as other  comprehensive  income,  net of tax.  As of
December 31, 1999, the Company's  investment in marketable equity securities had
a fair value of $48,642,000  and a cost basis of $5,348,000.  The Company's debt
securities are carried at amortized cost which  approximates  fair value.  As of
December 31, 1999,  debt  security  investments  consisted  of  $9,700,000  with
maturities of approximately one year and $10,416,000 of mutual bond funds.

Concentrations of Credit Risk

   Financial  assets  that  potentially   subject  the  Company  to  significant
concentrations  of credit risk consist  principally of cash,  cash  equivalents,
short-term investments,  and trade accounts receivable.  The Company markets and
sells its products  throughout the world and performs ongoing credit evaluations
of its customers.  The Company generally does not require collateral on accounts
receivable  as  the  majority  of  its  customers  are  large,  well-established
companies.  The Company  maintains  reserves  for  potential  credit  losses but
historically  has not experienced  any significant  losses related to individual
customers or groups of customers in any particular industry or geographic area.

Fair Value of Financial Instruments

   The Company's financial  instruments consist of cash equivalents,  short-term
investments,  accounts  receivable,  accounts payable and debt. The Company does
not have any derivative financial instruments. The Company believes the reported
carrying amounts of its financial  instruments  approximates  fair value,  based
upon the short



                                       47
<PAGE>

maturity of cash equivalents,  short-term  investments,  accounts receivable and
payable, and based on the current rates available to the Company on similar debt
issues.

Property and Equipment

   Property and equipment are stated at cost and  depreciated on a straight-line
basis  over  their  estimated  useful  lives  (two  to  five  years).  Leasehold
improvements are amortized over the corresponding  lease term or their estimated
useful lives, whichever is shorter.

   The Company evaluates long-lived assets and certain identifiable  intangibles
for impairment  whenever  events or changes in  circumstances  indicate that the
carrying amount of an asset may not be recoverable.  Recoverability of assets is
measured by a comparison  of the carrying  amount of an asset to future net cash
flows expected to be generated by the asset. 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 property and equipment exceeds its fair market value.

Long-term Investments

   As of December  31, 1999,  long-term  investments  consist of  non-marketable
equity securities.  As of December 31, 1998,  long-term  investments  consist of
non-marketable  equity securities and a marketable equity securities  investment
(carrying value of $8,546,000).

   The Company accounts for its non-marketable equity security investments based
on the cost  method as the Company  does not have the  ability to  significantly
influence the operating and financial policies of its investees.  Any decline in
value,  which is other than a temporary  decline,  is charged to earnings during
the period in which the impairment occurs. The Company classifies its marketable
equity  security  investments  as available  for sale.  Accordingly,  marketable
equity security  investments are recorded at fair value with related  unrealized
gains or losses reported as other comprehensive income.

   As of December  31, 1998,  the  Company's  investment  in  marketable  equity
securities had a fair value of $8,546,000 and a cost basis of $5,348,000.  As of
December  31,  1999,  this  investment  has  been  classified  as  a  short-term
investment.

Deferred Tax Assets and Deferred Tax Liabilities

   The Company  utilizes the asset and liability method of accounting for income
taxes. Under the asset and liability method, deferred tax assets and liabilities
are  established  to  recognize  the future  tax  consequences  attributable  to
differences  between the financial statement carrying amounts of existing assets
and  liabilities  and their  respective  tax  bases.  Deferred  tax  assets  and
liabilities  are measured using enacted tax rates expected to apply in the years
in which  temporary  differences  are expected to be  recovered or settled.  The
effects  on  deferred  tax assets  and  liabilities  of a change in tax rates is
recognized in income in the period that includes the enactment date.

Employee Stock Option and Purchase Plans

    The Company accounts for employee  stock-based awards in accordance with the
provisions of Accounting  Principles Board (APB) Opinion No. 25,  Accounting for
Stock Issued to Employees,  and related  interpretations.  As such, compensation
expense is recorded on the date of grant only if the current market price of the
underlying  stock  exceeded  the  exercise  price.  Pursuant  to SFAS  No.  123,
Accounting for  Stock-Based  Compensation,  the Company  discloses the pro forma
effects  of  using  the  fair  value  method  of  accounting   for   stock-based
compensation arrangements.

Stock Splits

   On  September  29,  1999,  the  Company's  Board  of  Directors   declared  a
three-for-one   common  stock  split  in  the  form  of  a  stock  dividend  for
Stockholders  of record as of October 11, 1999. The stock dividend  payment date
was



                                       48
<PAGE>

October 25, 1999 and the  Company's  common  stock traded  ex-dividend  starting
October 26, 1999, reflecting the three-for-one stock split.

   Subsequently,  on February 8, 2000, the Company's Board of Directors declared
an additional  three-for-one  common stock split in the form of a stock dividend
for  Stockholders of record as of February 21, 2000. The stock dividend  payment
date was  March 13,  2000 and the  Company's  common  stock  traded  ex-dividend
starting March 14, 2000, reflecting the additional three-for-one stock split.

   The  accompanying  consolidated  financial  statements and related  financial
information contained herein have been retroactively restated to give effect for
the September 1999 and February 2000 stock splits.

<TABLE>
Per Share Information

   Basic earnings (loss) per share is computed using the weighted-average number
of shares of common  stock  outstanding.  Diluted  earnings  (loss) per share is
computed using the weighted-average number of shares of common stock outstanding
and, when dilutive,  common equivalent shares from outstanding stock options and
warrants  using the treasury  stock method.  The following  table sets forth the
basic and diluted earnings (loss) per share  computational  data for the periods
presented.  Excluded from the computation of diluted  earnings per share for the
year ended December 31, 1997, are options to acquire 33,318,000 shares of common
stock with a  weighted-average  exercise  price of $0.49 and warrants to acquire
843,750 shares of common stock with a  weighted-average  exercise price of $0.68
because their effects would be anti-dilutive.

<CAPTION>
                                                       Years Ended December 31,
                                                 -----------------------------------
                                                     1997        1998        1999
                                                 -----------  ----------  ----------
                                              (in thousands, except per share amounts)
<S>                                              <C>           <C>         <C>
Net income (loss) for basic and
  diluted earnings (loss) per share..........    $ (7,373)     $  4,039    $ 18,809
                                                 ========      ========    ========
Weighted-average common shares
  outstanding utilized for basic
  earnings (loss) per share..................     181,872       210,114     229,128
Weighted-average common equivalent
  shares outstanding:
     Employee common stock options...........          --        20,592      31,365
     Common stock warrant....................          --           171         219
                                                 --------      --------    --------
     Total weighted-average common and
      common equivalent shares outstanding
      utilized for diluted earnings (loss) per
      share..................................     181,872       230,877     260,712
                                                 ========      ========    ========
Basic earnings (loss) per share..............    $   (0.04)    $   0.02    $   0.08
                                                 =========     ========    ========
Diluted earnings (loss) per share............    $   (0.04)    $   0.02    $   0.07
                                                 =========     ========    ========
</TABLE>

Foreign Currency Transactions

   The functional  currency of the Company's  foreign  subsidiaries  is the U.S.
dollar.  Resulting  foreign  exchange  gains  and  losses  are  included  in the
Consolidated Statements of Operations and, to date, have not been significant.

Comprehensive Income (Loss)

   The Company adopted SFAS No. 130,  Reporting  Comprehensive  Income effective
January 1, 1998.  SFAS No.  130  establishes  standards  for the  reporting  and
disclosure  of  comprehensive  income (loss) and its  components.  Comprehensive
income  (loss)  includes  all  changes in equity  during a period  except  those
resulting from investments by or distributions to owners.

   For the year ended  December 31, 1997,  the Company had no other  significant
components of other comprehensive loss. Accordingly,  comprehensive loss and net
loss were the same for this  period.  For the years ended  December 31, 1998 and
1999,  comprehensive income was $7,237,000 and $ 41,536,000,  respectively.  The
components  of other  comprehensive  income for these  periods  relate solely to
unrealized gains and losses on available-for-sale investments.

                                       49
<PAGE>

Reclassifications

   Certain  prior  period  balances  have been  reclassified  to  conform to the
current period presentation.

Recent Accounting Pronouncements

   In June  1998,  the FASB  issued  SFAS No.  133,  Accounting  for  Derivative
Instruments and Hedging  Activities,  as amended by SFAS No. 137,  effective for
all fiscal quarters of fiscal years beginning after June 15, 2000.  Accordingly,
the Company will adopt SFAS No. 133 beginning on January 1, 2001.  SFAS No. 133,
as amended, establishes standards for the accounting and reporting of derivative
instruments and hedging  activities,  including certain  derivative  instruments
embedded in other contracts.

   Under SFAS No. 133, entities are required to carry all derivative instruments
at fair value on their balance  sheets.  The  accounting for changes in the fair
value (i.e.,  gains or losses) of a derivative  instrument depends on whether it
has  been  designated  and  qualifies  as part  of a  hedging  activity  and the
underlying  purpose for it. The Company  does not believe  that the  adoption of
SFAS No.  133 will  have a  significant  impact  on the  Company's  consolidated
financial statements or related disclosures.

    In December  1999, the  Securities  and Exchange  Commission  ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"),  Revenue Recognition in Financial
Statements,  which  provides  guidance  on the  recognition,  presentation,  and
disclosure  of  revenue in  financial  statements  filed  with the SEC.  SAB 101
outlines the basic  criteria that must be met to recognize  revenue and provides
guidance for disclosure  related to revenue  recognition  policies.  The Company
will adopt SAB 101  effective  April 1, 2000, as required.  Management  does not
expect the  adoption  of SAB 101 to have any  material  effect on the  financial
position or results of the operations of the Company.

Note 2 -- Acquired Business:

   On November 24, 1999, the Company  acquired all of the  registered  shares of
Fidutec  Information  Technology SA for a cash payment of 6,000,000 Swiss Francs
(equivalent  U.S. dollar value of $3,765,000,  net of cash  acquired);  of which
1,200,000  Swiss  Francs  are held in  escrow,  subject  to  employee  retention
conditions lasting 12 to 24 months depending on named employees. The acquisition
was accounted for as a purchase.  The acquired  assets and assumed  liabilities,
and  the  related  results  of  operations,  are  included  in the  consolidated
financial  statements of the Company from the date of  acquisition.  The name of
the acquired business has been subsequently changed to BroadVision  Professional
Services.  The purchase price was allocated  based on fair values as follows (in
thousands):

         Purchase price, net of cash acquired                        $  3,765
         Add: fair value of liabilities assumed                           399
                                                                     --------
           Total purchase consideration                                 4,164
         Less: fair value allocated to acquired assets                    798
                                                                     --------
           Excess of purchase consideration over acquired

             assets and assumed liabilities                             3,366
         Excess allocated to:

           Prepaid compensation                                         2,749
                                                                     --------
           Goodwill                                                  $    617
                                                                     ========

                                       50

<PAGE>


Note 3 -- Property and Equipment (in thousands):

                                                     December 31,
                                                 -------------------
                                                   1998       1999
                                                 --------   --------
             Furniture and fixtures              $  1,001   $  2,323
             Computer and software                  8,662     17,618
             Leasehold improvements                 3,725      6,903
                                                 --------   --------
                                                   13,388     26,844
             Less accumulated depreciation and
               amortization                        (5,354)   (10,093)
                                                 --------   --------
                                                 $  8,034   $ 16,751
                                                 ========   ========

   Leased equipment totaled approximately $2,572,000 as of December 31, 1998 and
1999.  Accumulated  amortization  for  leased  equipment  totaled  approximately
$1,750,000, and $2,319,000 as of December 31,1998 and 1999, respectively.

Note 4 -- Accrued Expenses (in thousands):

                                                      December 31,
                                                   -------------------
                                                    1998      1999

                Employee benefits                  $   678   $ 1,340
                Commissions and bonuses              2,013     6,747
                Taxes payable                          785     1,273
                Other                                1,457     3,947
                                                   -------   -------
                                                   $ 4,933   $13,307
                                                   =======   =======


Note 5 -- Long-term Debt

   The Company has various  credit  facilities  with a  commercial  lender which
include  term debt in the form of notes  payable and a revolving  line of credit
that provides for up to $5,000,000 of additional  borrowings  (based on eligible
accounts  receivable).  As of December 31, 1998 and 1999,  outstanding term debt
borrowings  were  $3,472,000  and  $5,852,000,  respectively.   Borrowings  bear
interest at the bank's  prime rate (7.75% and 8.50% as of December  31, 1998 and
1999,  respectively).  Principal  and  interest  is due in  consecutive  monthly
payments through maturity based on the term of the facility.  Principal payments
of $977,000 are due annually from 2000 through 2004, $611,000 due in 2005, and a
final payment of $357,000 due in 2006.

   As of December 31, 1998 and 1999, the Company had no  outstanding  borrowings
under its revolving line of credit. However, commitments totaling $2,196,000 and
$2,820,000,  in the form of standby  letters  of credit  were  issued  under its
revolving line of credit facility as of December 31, 1998 and 1999, respectively
(see Note 7).

   The  commercial  credit  facilities  include  covenants  which impose certain
restrictions  on the payment of dividends and other  distributions  and requires
the Company to maintain monthly financial  covenants,  including a minimum quick
ratio, tangible net worth ratio and debt service coverage ratio.  Borrowings are
collateralized  by a security  interest in  substantially  all of the  Company's
owned assets.  The Company was in compliance with its financial  covenants as of
December 31, 1998 and December 31, 1999.

Note 6 -- Income Taxes

   Income before taxes includes losses from foreign  operations of approximately
$1,567,000  and  $2,906,000  for the years  ended  December  31,  1997 and 1998,
respectively, and income of $1,068,000 for the year ending December 31, 1999.

   The  components  of  income  tax  provision  (benefit)  are  as  follows  (in
thousands):

                                          Years Ended December 31,
                                     --------------------------------
                                        1997        1998        1999
                                     ----------  ----------  -------
 Current:
   Federal                              $ --       $  192      $  458
   State                                  --           13           2
   Foreign                                --          416         536
                                        ----       ------      ------
           Total current                $ --       $  621      $  996

                                       51

<PAGE>


 Deferred:
   Federal                                --         (600)        --
   State                                  --         (100)        --
                                        ----       ------       ----
           Total deferred               $ --       $ (700)      $ --
                                        ----       ------       ----
                                        $ --       $  (79)     $  996
                                        ====       ======      ======


<TABLE>

   The differences  between the income tax provision  (benefit)  computed at the
federal  statutory  rate of 35% and the  Company's  actual  income tax provision
(benefit) for the periods presented are as follows (in thousands):

<CAPTION>
                                                            Years Ended December 31,
                                                       ---------------------------------
                                                          1997        1998       1999
                                                       ----------  ---------- ----------
<S>                                                      <C>         <C>        <C>
Expected income tax provision                            $(2,507)    $ 1,346    $ 6,930
Expected  state  income  taxes,  net of  federal  tax         --         (58)       853
benefit
Foreign taxes                                                 --         416     (1,009)
Alternative minimum tax                                       --          97         --
Utilization of net operating loss carryforwards               --      (2,471)    (4,124)
Change in valuation allowance                                 --        (600)        --
Foreign losses not benefitted                                 --         988         --
Net operating losses not benefited                         2,507          --         --
R&D tax credits                                               --          --     (1,492)
Other                                                         --         203       (162)
                                                         -------     -------    --------
Income tax provision (benefit)                           $    --     $   (79)   $   996
                                                         =======     =======    =======
</TABLE>

   The  individual   components  of  the  Company's   deferred  tax  assets  and
liabilities are as follows (in thousands):

                                                              December 31,
                                                           ------------------
                                                             1998       1999
                                                           -------    -------
      Deferred tax assets:
        Depreciation and amortization                      $   766    $   895
        Accrued liabilities                                    723      1,058
        Capitalized research and development                   721        158
        Net operating losses                                 6,737     18,935
        Tax credits                                          2,180      4,190
                                                           -------    -------
             Total deferred tax assets                      11,127     25,236
        Less valuation allowance                            (9,153)   (24,536)
                                                           -------    -------
                                                             1,974        700

        Deferred tax liabilities -- unrealized gain on

           Marketable securities                            (1,274)   (17,318)
                                                           -------    -------
             Net deferred tax asset (liability)            $   700    $(16,618)
                                                           =======    =========

   The Company has provided a valuation  allowance for a significant  portion of
its deferred tax assets as of December 31, 1999. The total  valuation  allowance
increased $15,383,000 from December 31, 1998 to December 31, 1999. Approximately
$15,075,000 of the valuation  allowance  relating to income tax benefits arising
from the exercise of stock  options will be credited  directly to  stockholders'
equity and will not be  available  to benefit  the income tax  provision  in any
future periods.  In 1998, as a result of the  intraperiod  income tax allocation
provisions of SFAS No. 109, the deferred tax liability related to the unrealized
gain on marketable securities decreased the valuation allowance for the deferred
tax assets and was not  charged to  accumulated  other  comprehensive  income in
stockholders' equity for that period.

   As of December 31, 1999, the Company had federal and state net operating loss
carryforwards  of  approximately  $47,241,000  and  $16,952,000,   respectively,
available to offset future regular and alternative  minimum  taxable income.  In
addition,  the Company had federal and state  research  and  development  credit
carryforwards   of  approximately   $2,983,000  and  $1,207,000,   respectively,
available to offset future tax liabilities.  The Company's federal net operating
loss and tax credit  carryforwards expire in the years 2010 through 2019, if not
utilized.  The state net operating loss  carryforwards  expire in the years 2000
through 2019. The state research and development  credits can be carried forward
indefinitely.  As of December 31, 1999, the Company's  foreign  subsidiaries had
net operating  loss  carryforwards  in foreign  jurisdictions  of  approximately
$4,228,000  that can be used to offset future foreign  income.  Of these losses,
approximately $1,690,000 expires in the years 2000 through 2003.

Approximately $2,538,000 of these losses can be carried forward indefinitely.

   Federal and state tax laws limit the use of net operating loss  carryforwards
in certain  situations  where changes occur in the stock ownership of a company.
The Company  believes such an ownership  change,  as defined,  may have



                                       52
<PAGE>

occurred  and,  accordingly,  certain  of the  Company's  federal  and state net
operating loss carryforwards may be limited in their annual usage.

Note 7 -- Commitments

Leases

   The Company leases its  headquarters  facility and its other facilities under
noncancelable  operating lease agreements  expiring through the year 2007. Under
the terms of the  agreements,  the Company is required  to pay  property  taxes,
insurance  and  normal  maintenance  costs.  The  Company  also  leases  certain
equipment under capital leases expiring through the year 2000.

   A summary of future minimum lease payments is as follows (in thousands):

                                                            Capital   Operating
Year Ended December 31,                                     leases     leases
-----------------------                                    --------  --------
2000                                                       $   316    $  3,425
2001                                                                     3,476
2002                                                            --       3,470
2003                                                            --       3,357
2004                                                            --       3,351
  Thereafter                                                    --      10,556
                                                           -------    --------
Total minimum lease payments                                          $ 27,635
                                                                      ========
Less amount representing imputed interest                      (46)
                                                           --------
Present value of net minimum capital lease payments            270
Less current portion                                          (270)
                                                           -------
Capital leases, excluding current portion                  $    --
                                                           =======

   Rental expense  relating to operating  leases was  approximately  $1,161,000,
$1,101,000 and $2,716,000 for the years ended December 31, 1997,  1998 and 1999,
respectively. Total minimum sublease payments to be received in the future under
noncancelable subleases total $717,000 through May 2000.

Standby Letter of Credit Commitments

   As of December 31, 1999, the Company had various  outstanding  commitments in
the form of  standby  letters of credit,  $1,400,000  in favor of the  Company's
equipment  leasing  financier and  $1,420,000 in favor of the Company's  various
landlords to secure obligations under the Company's facility leases.

Note 8 -- Stockholders' Equity

Convertible Preferred Stock

   During September 1999, the Board of Directors and the  stockholders  approved
an  increase  in  the  authorized  shares  of  convertible  preferred  stock  to
10,000,000 shares.

Warrants

   As of December 31, 1999,  there were warrants  outstanding  to acquire 42,723
shares of common stock at $0.94 per share related to a facilities  lease. At the
date these  warrants  were  granted,  the fair value of these  warrants  was not
significant.

                                       53
<PAGE>

Common Stock

   During September 1999, the Board of Directors and the  stockholders  approved
an increase in the authorized  shares of common stock to 500,000,000  shares. In
addition,  the Board of Directors  increased the  aggregate  number of shares of
common stock  available to be issued  under the  Company's  Stock Option Plan by
9,000,000 shares.

   During November 1999, the Company completed a follow on common stock offering
and issued 9.3 million  shares for net proceeds to the Company of  approximately
$210.4  million.  In connection  with the stock  offering,  the Company has been
listed on the Neuer Markt  segment of the  Frankfurt  Stock  Exchange  under the
symbol "BDN".

   The Company  applies APB  Opinion  No. 25 and  related  interpretations  when
accounting for its stock option and stock purchase plans.  During the year ended
December  31,  1998,  the Company  recorded  deferred  compensation  of $240,000
representing  the  difference  between  exercise  price and fair  value of stock
options granted.  Deferred  compensation is amortized to expense over the period
benefited  which has been  determined to be the vesting period of the individual
options  (generally  five  years).  As of  December  31,  1999,  the Company had
reserved  70,875,000  shares  of  common  stock for  issuance  under its  Equity
Incentive  Plan.  Under this plan, the Board of Directors may grant incentive or
nonqualified stock options at prices not less than 100% or 85%, respectively, of
the fair market value of the Company's  common stock, as determined by the Board
of Directors,  at the date of grant. The vesting of individual  options may vary
but in each case at least 20% of the total  number of shares  subject to options
will become exercisable per year. These options generally expire ten years after
the grant  date.  When an employee  option is  exercised  prior to vesting,  any
unvested  shares so purchased  are subject to  repurchase  by the Company at the
original  purchase  price of the  stock  upon  termination  of  employment.  The
Company's right to repurchase lapses at a minimum rate of 20% per year over five
years from the date the option was  granted or, for new  employees,  the date of
hire.  Such right is exercisable  only within 90 days  following  termination of
employment. Approximately 57,303 unvested shares were repurchased by the Company
during the year ended  December  31, 1999.  As of December  31, 1999,  1,505,700
shares were subject to repurchase at a weighted-average price of $0.29.

   The Company's  President and Chief Executive  Officer has options to purchase
4,500,000  shares of common stock at an exercise  price of $0.44 per share.  The
options were  granted on April 1, 1995 and vest  ratably over a 60-month  period
commencing  on grant whereas the first year is subject to cliff  vesting.  As of
December 31, 1999,  4,200,000 of the 4,500,000  options were vested. On June 23,
1999, the Company's President and Chief Executive Officer was granted additional
options to purchase  4,500,000  shares of common  stock at an exercise  price of
$6.67 per share.  The options vest ratably over a 60-month period  commencing on
grant  whereas the first year is subject to cliff  vesting.  As of December  31,
1999, none of the 4,500,000 additional options were vested.

<TABLE>
   Activity in the Company's stock option plan is as follows:

<CAPTION>
                                                           Years ended December 31,
                                      ------------------------------------------------------------------
                                              1997                    1998                  1999
                                      --------------------   --------------------- ----------------------
                                                  Weighted-              Weighted-             Weighted-
                                                   Average                Average               Average
                                        Options   Exercise     Options   Exercise    Options   Exercise
Fixed Options                           (000's)     Price      (000's)     Price     (000's)     Price
-------------                         --------------------   --------------------  -------------------

<S>                                     <C>        <C>         <C>        <C>        <C>        <C>
Outstanding at beginning of period      21,537     $ 0.31      26,163     $ 0.50     31,482     $ 0.96
Granted                                 12,114       0.74      14,292       1.52     20,565      11.42
Exercised                               (2,295)      0.03      (5,193)      0.40     (9,759)      0.71
Forfeited                               (5,193)      0.47      (3,780)      0.64     (2,310)      1.67
                                        ------                 ------                ------
Outstanding at end of period            26,163     $ 0.50      31,482     $ 0.96      39,978    $ 6.36
                                        ======                 ======              =========
Options vested at end of period          5,769     $ 0.29       7,227     $ 0.48      6,195     $ 0.82
                                        ======                 ======                ======
Weighted-average   fair   value   of
options  Granted during the period                 $ 0.74                 $ 0.99                $ 9.36
                                                   ======                 ======                ======

</TABLE>


<TABLE>
    The following table summarizes stock options  outstanding  under the plan as
of December 31, 1999:

                                          Outstanding
                          -------------------------------------------------
                                         Weighted-Avg.                              Vested
                                           Remaining                        ------------------------
Range of                  Options      Contractual Life    Weighted-Avg.    Options     Weighted-Avg.
Exercise Prices           (000's)          In Years       Exercise Price    (000's)    Exercise Price
---------------           -------          --------       --------------    -------    --------------
<S>                       <C>               <C>              <C>            <C>           <C>
$0.01 -- $ 0.78           7,974             6.81             $ 0.53         3,585         $ 0.49

  0.79--   1.71           8,514             8.00               1.14         2,079           0.97
  1.72--   4.42           7,485             8.85               3.05           528           2.38
  4.75--   6.67           9,036             9.44               5.78             0           0.00
 13.55--  52.83           6,969             9.83              23.72             3          19.03
                          -----                                             -----
$0.01-- $ 52.83          39,978             8.57             $ 6.36         6,195         $ 0.82
                         ======                                             =====

</TABLE>

                                       54
<PAGE>

<TABLE>

   The Company  grants options  outside of the Company's  stock option plan. The
terms of these  options  are  generally  identical  to those  granted  under the
Company's plan. A summary of options outside of the plan is presented below:
<CAPTION>

                                                                                      Years ended December 31,
                                                           -------------------------------------------------------------------------
                                                                     1997                   1998                     1999
                                                           ----------------------  ----------------------    -----------------------
                                                                        Weighted-                Weighted-                Weighted-
                                                                        Average                  Average                  Average
                                                          Options       Exercise    Options      Exercise     Options     Exercise
                   Fixed Options                          (000's)        Price     (000's)        Price       (000's)      Price
                   -------------                          -------        -----     -------        -----       -------      -----
<S>                                                       <C>         <C>           <C>         <C>           <C>         <C>
Outstanding at the beginning of period                    6,399       $   0.39      7,155       $   0.45      6,651       $   0.47
              Granted                                      1,386           0.61       --          --          9,405           9.84
              Exercised                                     --          --           (504)          0.21       (333)          0.74
              Forfeited                                     (630)          0.09       --          --            (66)          7.49
                                                           -----                     -----                  --------
Outstanding at the end of period                           7,155       $   0.45      6,651       $   0.47     15,657       $  6.06
                                                           =====                     =====                  ========
Options vested at the end of period                        3,555       $   0.40      4,473       $   0.45      5,433       $  0.45
                                                           =====                     =====                  ========
Weighted-average fair value of options granted
     during the period                                                 $   0.61                  $   --                    $  8.06
                                                                       ========                  =======                   =======
</TABLE>

<TABLE>
   The following table summarizes  stock options  outstanding as of December 31,
1999:

                                          Outstanding
                          -------------------------------------------------
                                         Weighted-Avg.                              Vested
                                           Remaining                        --------------------------
Range of                  Options      Contractual Life    Weighted-Avg.    Options     Weighted-Avg.
Exercise Prices           (000's)          In Years       Exercise Price    (000's)    Exercise Price
---------------           -------          --------       --------------    -------    --------------
<S>                        <C>               <C>             <C>            <C>           <C>
$0.09 --  $0.44            4,950             6.16            $ 0.41         4,650         $ 0.41

  0.61--   6.33            2,406             3.14              2.19           771           0.61
  6.67--   8.00            2,544             9.57              7.31             9           7.33
  8.06--  11.76            2,805             9.67             10.92             3           9.70
 12.97--  13.48            2,952             9.72             12.99             0           0.00
                           -----                                            -----
$0.09--$13.48             15,657            7.55             $ 6.06         5,433        $ 0.45
                          ======                                            =====
</TABLE>

Employee Stock Purchase Plan

   As of  December  31,  1999,  the Company had  reserved  9,900,000  shares for
issuance under the Company's Employee Stock Purchase Plan (the "Purchase Plan").
The Purchase Plan permits eligible employees to purchase common stock equivalent
to a percentage of the employee's earnings,  not to exceed 15%, at a price equal
to 85% of the fair market  value of the common  stock at dates  specified by the
Board of Directors as provided in the Plan. Under the Purchase Plan, the Company
issued 2,178,000, 2,052,000 and 1,833,000 shares to employees in the years ended
December 31, 1997, 1998 and 1999, respectively. Under SFAS No. 123, compensation
cost is recognized for the fair value of the employees'  purchase rights,  which
was  estimated  using the  Black-Scholes  option  pricing model with no expected
dividends,  an expected  life of 7 months,  and the  following  weighted-average
assumptions:

                                             Years ended December 31,
                                      --------------------------------------
                                          1997         1998         1999
                                      -----------  -----------  -----------

Risk-free interest rate                   5.05%        4.48%        6.00%
Volatility                                  67%         112%          97%

   The  weighted-average  fair value of the purchase rights granted in the years
ended  December  31,  1997,   1998,  and  1999  was  $0.24,   $0.46  and  $3.24,
respectively.

Pro Forma Disclosure

   The fair value of each option  grant is  estimated on the date of grant using
the  Black-Scholes  option-pricing  model  with no  expected  dividends  and the
following weighted-average assumptions:

                                                Years ended December 31,
                                        ----------------------------------------
                                            1997          1998         1999
                                        ------------  ------------ -------------
Expected life                             2.8 years     3.0 years     4.1 years
Risk-free interest rate                       5.91%         4.70%         6.55%
Volatility                                      67%          112%          97%

                                       55
<PAGE>

   Had compensation  cost for the Company's stock option plan and stock purchase
plan been determined  consistent  with SFAS No. 123, the Company's  reported net
income  (loss) and net income  (loss) per share  would have been  changed to the
amounts indicated below (in thousands except per share data):

                                          Years ended December 31,
                                     ----------------------------------
                                        1997        1998         1999
                                    ----------- -----------  -----------
Net income (loss):
  As reported                         $(7,373)    $ 4,039      $18,809
  Pro forma                           $(9,551)    $(1,885)     $(25,015)
Basic net income (loss) per share:
  As reported                         $  (0.04)   $   0.02     $   0.08
  Pro forma                           $  (0.05)   $  (0.01)    $  (0.11)
Diluted net income (loss) per share:

  As reported                         $  (0.04)   $   0.02     $   0.07
  Pro forma                           $  (0.05)   $  (0.01)    $  (0.10)

Note 9 -- Employee Benefit Plan

   The Company provides for a defined  contribution  employee retirement plan in
accordance with section 401(k) of the Internal Revenue Code.  Eligible employees
are entitled to  contribute up to 20% of their annual  compensation,  subject to
certain limitations ($10,000 for the year ended December 31, 1999).

   Effective  January  1, 2000,  the  Company  will  provide a 50% match for all
employee  contributions,  up to 6% of the employees' annual compensation subject
to certain  limitations  ($5,100 per  employee  for the year ended  December 31,
2000).  Employees  vest in  Company  matching  contributions  based  on years of
service with the company,  50% upon the employees' first anniversary and 100% on
the second anniversary and thereafter.

Note 10 -- Geographic, Segment and Significant Customer Information

   The Company adopted the provisions of SFAS No. 131, Disclosure about Segments
of an Enterprise and Related Information,  during 1998. SFAS No. 131 establishes
standards for the reporting by public business  enterprises of information about
operating  segments,   products  and  services,   geographic  areas,  and  major
customers. The method for determining what information to report is based on the
way that  management  organizes  the operating  segments  within the Company for
making  operational  decisions and  assessments  of financial  performance.  The
Company's chief operating decision maker is considered to be the Company's Chief
Executive Officer ("CEO"). The CEO reviews financial  information presented on a
consolidated  basis  accompanied by disaggregated  information about revenues by
geographic region and by product for purposes of making operating  decisions and
assessing financial performance.

   The disaggregated  revenue information on a product basis reviewed by the CEO
is as follows. The Company does not track margins on the same basis.

                                        Years Ended December 31,
                                    ------------------------------------
(in thousdands)                        1997         1998         1999
                                    ---------    ---------    ----------

Software licenses:
  One-To-One Enterprise              $ 14,479     $ 17,799     $ 20,538
  One-To-One Packaged Solutions         4,494       18,268       54,845
Services                                5,981        9,739       26,737
Maintenance                             2,151        5,105       13,394
                                     --------     --------     --------
  Total Company                      $ 27,105     $ 50,911     $115,514
                                     ========     ========     ========

   The Company  sells its  products and provides  services  worldwide  through a
direct sales force, independent distributors,  value-added resellers, and system
integrators.  It currently operates in three primary regions, the Americas which
includes  North and South  America,  Europe which  includes  Eastern and Western
Europe and the Middle East, and Asia/Pacific  which includes the Pacific Rim and
the Far East.

                                       56
<PAGE>

   Information  regarding  the business  operations  of our sales regions are as
follows (in thousands):

                                        Years Ended December 31,
                                     -------------------------------
                                       1997       1998      1999
                                    ---------  --------- -------
Revenues:
  Americas                           $ 12,872   $29,330   $ 79,323
  Europe                               10,850    16,944     26,211
  Asia/Pacific                          3,383     4,637      9,980
                                     --------   -------   --------
  Total Company                      $ 27,105   $50,911   $115,514
                                     ========   =======   ========

                                                December 31,
                                           ----------------------
                                              1998       1999
                                           ---------  ---------
Identifiable assets:
  Americas                                 $  99,343  $ 400,858
  Europe                                       1,754      4,122
  Asia/Pacific                                   465      1,148
                                           ---------  ---------
  Total Company                            $ 101,562  $ 406,128
                                           =========  =========

   During the year ended December 31, 1997,  approximately  11% of the Company's
revenues were  attributable to one customer. During the years ended December 31,
1998 and 1999, no customer accounted for 10% or more of the Company's revenues.

Note 11 -- Subsequent events (unaudited)

   On January 26, 2000, the Company announced a definitive  agreement to acquire
all of the outstanding stock of Interleaf, subject to stockholder and regulatory
approval  and other  conditions.  Under the  terms of the  agreement,  Interleaf
shareholders will receive 1.0395 shares of BroadVision  common stock in exchange
for each share of Interleaf common stock; or estimated purchase consideration of
approximately  $802 million,  inclusive of $18 million of estimated  acquisition
and severance  costs.  The Company  expects to account for the  acquisition as a
purchase.

   On February 15,  2000,  the Company  entered  into a lease for  approximately
400,000  square  feet  of  office  space  in  a  new  building  currently  under
construction  in Redwood  City,  California.  The  building  is  expected  to be
available for occupancy during June 2001.

   On February 22, 2000, the Company reached a settlement  agreement and entered
into a license  agreement with Art Technology  Group ("ATG") in connection  with
the  lawsuit  filed by the Company on December  11,  1998  against ATG  alleging
infringement on Our U.S. Patent No.  5,710,887.  In accordance with the terms of
the  agreement,  the  Company  granted  ATG  a  nonexclusive,   nontransferable,
worldwide,  perpetual  license  and was paid $8 million by ATG at the  effective
date of the  settlement  and will  receive  a total  of $7  million  payable  in
quarterly installments  commencing February 24, 2000 (four consecutive quarterly
payments of $750,000  during 2000 and eight  consecutive  quarterly  payments of
$500,000 during 2001 and 2002).

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

             None



                                       57
<PAGE>

                                    PART III

   Certain information required by Part III is incorporated by reference in this
Report from the Company's definitive proxy statement for its 1999 Annual Meeting
of Stockholders to be filed pursuant to Regulation 14A (the "Proxy Statement").

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

   The information  with respect to the Company's  directors and compliance with
Section 16(a) of the  Securities  Exchange Act of 1934,  as amended  required by
this Item is incorporated by reference from the Proxy Statement. The information
for the  Company's  executive  officers  required by this Item appears under the
caption "Executive Officers and Key Personnel" at Item 1 of this report.


ITEM 11.   EXECUTIVE COMPENSATION

   The  information  required by this Item is incorporated by reference from the
Proxy Statement.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   The  information  required by this Item is incorporated by reference from the
Proxy Statement.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   The  information  required by this Item is incorporated by reference from the
Proxy Statement.

                                     PART IV

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

    (a) The following documents are filed as a part of this Report.

        1. Consolidated   Financial  Statements.   The  following   Consolidated
           Financial  Statements of the Company are included at Part II, Item 8,
           of this Annual Report on Form 10-K.

        Independent Auditors' Report

        Consolidated Balance Sheets as of December 31, 1998 and 1999

        Consolidated  Statements  of  Operations  for  each of the  years in the
        three-year  period ended December 31, 1999.  Consolidated  Statements of
        Stockholders'  Equity  for each of the  years in the  three-year  period
        ended December 31,         1999.

        Consolidated  Statements  of Cash  Flows  for  each of the  years in the
        three-year period ended December 31, 1999.

        Notes to Consolidated Financial Statements

        2. Financial Statement Schedule.  Attached to this Annual Report on Form
           10-K.

           Report on Financial  Statement  Schedule  and Consent of  Independent
           Auditors Schedule II -- Valuation and Qualifying Accounts


        3. Exhibits.  The exhibits listed on the accompanying  Index to Exhibits
           immediately  following the consolidated  financial statement schedule
           are filed as part of, or  incorporated by reference into, this Annual
           Report on Form 10-K.


    (b) Reports on Form 8-K. On December 27, 1999, we filed a Current  Report on
        Form 8-K (File No.  0-28252)  as  notice of our  Change in  Registrant's
        Certifying  Accountants  to  engage  Arthur  Andersen  LLP  as  our  new
        independent accountants as of December 20, 1999.

                                       59
<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, in Redwood City, State
of California, on this 30th day of March 2000.

                                            BroadVision, Inc.

                                            By: /s/ Pehong Chen
                                               ----------------
                                                  Pehong Chen
                                            Chairman of the Board and
                                          Chief Executive Officer

                                POWER OF ATTORNEY

   KNOW ALL MEN BY THESE  PRESENTS,  that each person  whose  signature  appears
below   constitutes   and  appoints  Pehong  Chen  and  Randall  C.  Bolten  his
attorney-in-fact,  with  the  power  of  substitution,  for  him in any  and all
capacities,  to sign any amendments to this Report on Form 10-K, and to file the
same, with exhibits  thereto and other documents in connection  therewith,  with
the Securities and Exchange Commission, hereby ratifying and confirming all that
the said attorneys-in-fact, or his substitute or substitutes, may do or cause to
be done by virtue hereof.

<TABLE>
   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 and in the capacities and on the dates indicated.
<CAPTION>

          Signature                                Title                                     Date
          ---------                                -----                                     ----
<S>                                     <C>                                            <C>
        /s/ Pehong Chen                  Chairman of the Board and                      March 30, 2000
        ---------------                   Chief Executive Officer
          Pehong Chen                  (Principal Executive Officer)


     /s/ Randall C. Bolten              Vice President, Operations,                     March 30, 2000
     ---------------------                Chief Financial Officer
       Randall C. Bolten                   (Principal Financial
                                          and Accounting Officer)

     /s/ David L. Anderson                       Director                               March 30, 2000
     ---------------------
       David L. Anderson

      /s/ Yogen K. Dalal                         Director                               March 30, 2000
      ------------------
        Yogen K. Dalal

       /s/ Koh Boon Hwee                         Director                               March 30, 2000
       -----------------
         Koh Boon Hwee

      /s/ Carl Pascarella                        Director                               March 30, 2000
      -------------------
        Carl Pascarella

      /s/ Todd A. Garrett                        Director                               March 30, 2000
      -------------------
        Todd A. Garrett

     /s/ Klaus Luft                              Director                               March 30, 2000
     ------------------
         Klaus Luft
</TABLE>

                                       60
<PAGE>


                     REPORT ON FINANCIAL STATEMENT SCHEDULE
                        OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors and Stockholders
BroadVision, Inc.:

    We have audited in accordance with auditing standards  generally accepted in
the United States, the consolidated  financial  statements of BroadVision,  Inc.
and subsidiaries  included in this annual report on Form 10-K for the year ended
December  31, 1999 and have issued our report  thereon  dated  January 24, 2000,
except  with  respect to the matter  discussed  in the section  entitled  "Stock
Splits"  in Note 1, as to which the date is March 13,  2000.  Our audit was made
for the purpose of forming an opinion on the basic financial statements taken as
a whole.  The  schedule,  Schedule II, is the  responsibility  of the  Company's
management,  is  presented  for purposes of complying  with the  Securities  and
Exchange  Commission's rules and is not part of the basic financial  statements.
This  schedule  has been  subjected to the  auditing  procedures  applied in the
audits of the basic financial  statements and, in our opinion,  fairly states in
all material  respects the  financial  data  required to be set forth therein in
relation to the basic financial statements taken as a whole.

                                               ARTHUR ANDERSEN LLP

San Jose, California
March 30, 2000


                                       61
<PAGE>

<TABLE>

                                   BROADVISION, INC. AND SUBSIDIARIES

                            SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

                                             (in thousands)

<CAPTION>
                                        Balance at       Charged to
                                       Beginning of      Costs and                        Balance at
                                          Period          Expenses     Deductions (1)   End of Period
                                      ---------------  --------------- ---------------  ---------------

<S>                                     <C>              <C>              <C>             <C>
Year Ended December 31, 1997            $      191       $      515       $       35      $       671
                                      ===============  =============== ===============  ===============

Year Ended December 31, 1998            $      671       $      458       $      341      $       788
                                      ===============  =============== ===============  ===============

Year Ended December 31, 1999            $      788       $      758       $      100      $     1,446
                                      ===============  =============== ===============  ===============
<FN>


(1) Represents net charge-offs of specific receivables.

</FN>
</TABLE>

                                       62
<PAGE>


<TABLE>

                                                       BROADVISION, INC.
                                                   ANNUAL REPORT ON FORM 10-K
                                                       DECEMBER 31, 1999

                                                       INDEX TO EXHIBITS
<CAPTION>

        Exhibit        Description
        -------        -----------
<S>                    <C>
        3.1*           Amended and Restated Certificate of Incorporation.
        3.2*           Amended and restated Bylaws.
        4.1*           References are hereby made to Exhibits 3.1 to 3.2.
        4.3*           Second Amended and Restated Investor's Rights Agreement dated April 15, 1997 among
                       the Company and certain of its stockholders.
       10.1* (1)       Form of Indemnity Agreement between the Company and each of its directors.
       10.2* (1)       Equity Incentive Plan as amended September 29, 1999 (the "Equity Incentive Plan").
       10.3* (1)       Form of Incentive Stock Option under the Equity Incentive Plan.
       10.4* (1)       Form of Nonstatutory Stock Option under the Equity Incentive Plan.
       10.5* (1)       Form of Nonstatutory Stock Option (Performance-Based).
       10.6* (1)       1997 Employee Stock Purchase Plan (the "Employee Stock Purchase Plan").
       10.7* (1)       Employee Stock Purchase Plan Offering (Initial Offering).
       10.8* (1)       Employee Stock Purchase Plan Offering (Subsequent Offering).
       10.9*           Master Equipment Lease Agreement dated May 23, 1997 between the Company and
                       Lighthouse Capital Partners, L.P.
       10.10*+         Terms and Conditions dated January 1, 1997 between IONA Technologies LTD and the
                       Company.
       10.11*          Series D Preferred Stock Option Agreement dated February 27, 1997 between the
                       Company and Pehong Chen.
       10.12*          Standard Office Lease dated February 8, 1996 between the Company and GVE Distel
                       Associates, a California General Partnership.
       10.13*(1)       Stock Option Plan.
       10.14*(1)       Form of Incentive Stock Option under the Stock Option Plan.
       10.15*(1)       Form of Nonstatutory Stock Option under the Stock Option Plan.
       10.16*          Lease dated February 5, 1997 between the Company and Martin/Campus Associates, L.P.
       10.17**         Loan and Security, dated July 2, 1997, between Silicon Valley Bank and the Company.
       10.18***        First Amendment to Loan and Security Agreement, dated as of February 5, 1998 between
                       the Company and Silicon Valley Bank.
       10.19****       Agreement and Plan of Merger and Reorganization dated January 26, 2000 among the Company,
                       Infiniti Acquisition Sub, Inc. and Interleaf, Inc.
       21.1            Subsidiaries of the Company.
       23.1            Report on Financial Statement Schedule and Consent of KPMG LLP, Independent Auditors.
       23.2            Consent of Arthur Andersen LLP.
       24.1            Power of Attorney.
       27.1            Financial Data Schedule.

<FN>
*     Incorporated  by  reference  to the  Company's  Proxy  Statement  filed on
      September 13, 1999.

**    Incorporated  by reference  to the  Company's  10-Q for the quarter  ended
      September 30, 1997 filed on November 12, 1997.

***   Incorporated by reference to the Company's  Registration Statement on Form
      S-3 filed on March 4, 1998.

****  Incorporated by reference to the Company's  Registration Statement on Form
      S-4 filed on March 6, 2000.

(1)   Represents a management contract or compensatory plan or arrangement.

+     Confidential treatment requested.
</FN>
</TABLE>

                                       63