<PAGE>

                                                                   Exhibit 13.1

                      1999 ANNUAL REPORT TO STOCKHOLDERS

BUSINESS-TO-BUSINESS COMMERCE IS EXPECTED TO REACH $1.5 TRILLION BY 2003 IN THE
UNITED STATES ALONE. INFORMATION TECHNOLOGY (IT) PRODUCTS AND SERVICES ARE
FORECASTED TO GROW FROM $836 BILLION IN 1999 TO OVER $1.0 TRILLION IN 2002.

[GRAPHIC] EarthWeb Inc. 1999 Annual Report                                    IT

ON A WORLDWIDE BASIS, THE B2B IT MARKET IS OVER $40 BILLION AND GROWING QUICKLY.
EARTHWEB, THE LEADING B2B PORTAL TO THE GLOBAL IT MARKET, CONNECTS THE WORLD OF
B2B AND THE IT MARKET THROUGH A PLATFORM OF CONTENT, CAREER, COMMUNITY AND
COMMERCE SERVICES.

                                     PORTAL


<PAGE>

             REVENUES FOR THE YEAR INCREASED TO $31.0 MILLION, UP
                                 827% OVER 1998.
              GROSS MARGIN ROSE TO 64.7% COMPARED TO 36.4% IN 1998.
          TOTAL ADVERTISING AND PAID JOB LISTING CUSTOMER BASE GREW TO
                                MORE THAN 4,900.
              PAGE VIEWS FOR EARTHWEB'S ONLINE SERVICES QUADRUPLED
                             IN 1999 TO 681 MILLION.
          SUBSCRIBERS TO EARTHWEB'S EMAIL NEWSLETTERS REACHED 702,000,
           EARTHWEB'S DICE.COM WAS RANKED AS THE LEADING IT JOB BOARD
                           BY MEDIA METRIX AND ALEXA.

                    FOR MORE INFORMATION, VISIT WWW.EWBX.COM.

<PAGE>

                              LETTER TO SHAREHOLDERS

               AS A TRUSTED THIRD-PARTY PLATFORM, EARTHWEB ENABLES
                          INFORMATION TECHNOLOGY
                (IT) PROFESSIONALS TO ACCESS TECHNICAL INFORMATION,
               BUY AND SELL PRODUCTS AND SERVICES, MANAGE CAREERS
                    AND RECRUIT PERSONNEL THROUGH ITS NETWORK
                OF FLAGSHIP SERVICES THAT INCLUDES EARTHWEB.COM,
                          DICE.COM AND ITKNOWLEDGE.COM.

EarthWeb's success in 1999 reflects our firm commitment to being the leading
business portal to the global IT industry and to harnessing signi/cant growth
opportunities in this market. These opportunities are being created by the
dynamic growth of online B2B, and by the increasingly important role the IT
industry plays in the global economy.

      Our strong performance in the global IT industry has been achieved by
redefining many IT services in major vertical seg- ments of the industry. As a
result, we have strengthened our position as the leading provider of B2B online
services for the IT industry, and we have developed a strategic direction to
provide a total solution to this $836 billion industry by becoming the leading
B2B portal.

      CUSTOMER BASE. We are especially pleased with the progress we have made
in expanding our customer base to include many additional Fortune 500
companies. EarthWeb has signed agreements with the following companies, among
others, for one or more of its product offerings: Apple, Bank of America,
Boeing, Cisco, Dell, General Motors, HP, IBM, Intel, Motorola, Nasdaq,
Oracle, Red Hat, Sprint, U.S. Patent and Trademark Office and Yahoo! We
believe the continuing expansion of our customer base is a result of
EarthWeb's strong value proposition and our customers' increased spending for
online services.

      JOB BOARD. Dice.com (www.dice.com), part of the EarthWeb network of B2B
online services for the IT industry, provides online career management and
recruiting services. The site offers value-added services and listed more
than 160,000 high tech jobs at year end. Dice.com was ranked number one in
San Francisco, New York, Boston and Austin for IT job postings by Dynamic
Logic, an online research company, in an August 1999 study commissioned by
EarthWeb. Dice.com also continued to expand its Custom Search Network, which
is a targeted group of sites such as Red Hat.com that use the dice.com job
search engine to power their job areas.

      KNOWLEDGE PRODUCTS GROUP. Premium products from EarthWeb's Knowledge
Products Group include ITKnowledge, SupportSource, and Linux Courseware. These
products range from a comprehensive online library of searchable IT reference
books and troubleshooting tools, to a complete course covering all aspects of
Linux including installation, administration and trouble-shooting. We also
entered into new and expanded license agreements that provide additional
technical reference content for EarthWeb's Knowledge Products. These agreements
include a license of the IBM Redbook series, exclusive licenses of Auerbach
Publications and the Coriolis Group, and a broader license of CRC Press.

      SUBSCRIPTION & TRAFFIC GROWTH. Just one year after launching our first
subscription-based online service, EarthWeb's premium subscription products
became a major reference source to IT departments worldwide, and the number of
subscribers to EarthWeb's e-mail newsletters increased to 702,000. Aggregate
page views for EarthWeb's online services rose to 681 million in 1999. The
total number of unique visits to EarthWeb sites in 1999 reached 145 million.

We have excellent market opportunities, a clear strategic direction, leading
products and services, and a competitive advantage in our people. To our
Board of Directors and Officers, and to our hard-working and dedicated staff
members, I extend a sincere thank you for a job well done.

      I also thank EarthWeb's valued customers and shareholders, whose
support has contributed so importantly to our success in 1999. We look
forward to another year of achievements in the global IT marketplace as we
leverage our strategic direction and assets for our continued success.

/s/ Jack D. Hidary
Jack D. Hidary
PRESIDENT AND CHIEF EXECUTIVE OFFICER


                                       1
<PAGE>
                                  The EarthWeb

                                   [GRAPHIC]

EarthWeb, the leading business portal to the global IT industry, provides a
comprehensive set of solutions to a broad range of IT professionals: CTOs, IT
managers, corporate IT purchasers, programmers, network managers, system
administrators and recruiters/HR managers.

Content

Extensive database of reference materials to solve challenging technical
problems.

OUR CONTENT INCLUDES TECHNICAL RESOURCES, ARTICLES, PREMIUM REFERENCE MATERIALS,
DECISION SUPPORT TOOLS, TRAINING MATERIALS AND TUTORIALS THAT ARE CATEGORIZED
USING OUR PROPRIETARY SYSTEM WITH LINKS TO THOUSANDS OF ADDITIONAL RESOURCES.
DRAWING ON A BASE OF MORE THAN 3,500 TECHNICAL BOOKS, COMPRISING OVER TWO
MILLION PAGES OF CONTENT, EARTHWEB HAS THE LARGEST ONLINE LIBRARY OF TECHNICAL
BOOKS AND REFERENCE MATERIALS FOR THE IT INDUSTRY.

Community

Forums where users can contribute materials and communicate with each other.

EARTHWEB PROVIDES INTERACTIVE FORUMS FOR IT PROFESSIONALS, INCLUDING MORE THAN
THIRTY TECHNICAL BULLETIN BOARDS CONTAINING MORE THAN 45,000 POSTINGS. THESE
BULLETIN BOARDS, WHICH ARE ARCHIVED TO CREATE AN ONLINE KNOWLEDGE REPOSITORY,
ENABLE USERS TO HELP EACH OTHER SOLVE TECHNICAL PROBLEMS.


                                       2
<PAGE>

Solution

                                   [GRAPHIC]

Career Management and Recruiting

Comprehensive set of career and professional development services online.

DICE.COM IS THE LEADING ONLINE JOB BOARD FOR THE IT INDUSTRY ENABLING EMPLOYERS
TO POST JOB LISTINGS AND USERS TO SEARCH WHAT HAS BECOME THE LARGEST ONLINE
DATABASE OF FULL-TIME AND CONTRACT IT POSITIONS. WE ALSO PROVIDE SELF-PACED
ASSESSMENT TESTS, CERTIFICATION PROGRAM GUIDES AND PROPRIETARY, IN-DEPTH
TECHNICAL TUTORIALS FOR IT PROFESSIONALS.

Commerce

Online marketplaces for the purchase and sale of IT products and services.

WE PROVIDE AN ONLINE MARKETPLACE WHERE VENDORS CAN PROMOTE THEIR PRODUCTS AND
SERVICES, AND PURCHASERS CAN IDENTIFY, EVALUATE AND BUY THE PRODUCTS THAT BEST
MEET THEIR NEEDS. IN ADDITION, OUR ONLINE AUCTIONS FEATURE HUNDREDS OF LISTINGS
FOR ENTERPRISE-LEVEL PRODUCTS.


                                        3
<PAGE>

EARTHWEB A LEADER IN THE IT INDUSTRY

WE'RE EXCITED TO BE WORKING WITH EARTHWEB, A LEADING PROVIDER OF ONLINE
TECHNICAL INFORMATION TO THE IT INDUSTRY, TO DELIVER A ROBUST ONLINE SHOWCASE
THAT RESPONDS TO CUSTOMER REQUESTS FOR AN INFORMATION CENTER THAT HIGHLIGHTS
WINDOWS 2000 TECHNICAL RESOURCES AND SUCCESS STORIES. ANDERS DAVIDSON, PRODUCT
MANAGER AT MICROSOFT.

CORPORATE AMERICA HAS NOW RECOGNIZED THE STRONG VALUE PROPOSITION OF ONLINE
RECRUITING, AND THE DICE.COM EXPANSION HAS POSITIONED THE SITE TO SERVE THIS
SIGNIFICANT MARKET. PETER WEDDLE, EDITOR AND PUBLISHER OF WEDDLE'S, A LEADING
NEWSLETTER IN THE ONLINE RECRUITING INDUSTRY.

CCBSURE HAS REALIZED A SIGNIFICANT AND STEADY INCREASE IN TRAFFIC RESULTING FROM
OUR RELATIONSHIP WITH EARTHWEB. STEVEN R. ROBINSON, DIRECTOR OF MARKETING AT
CCBSURE, A LEADING ONLINE PROVIDER OF BUSINESS INSURANCE SOLUTIONS FOR IT
PROFESSIONALS.

IN AN APPLES-TO-APPLES COMPARISON OF THE MAJOR IT JOB WEB SITES, WE FOUND THAT
DICE.COM HAD MORE IT JOB LISTINGS IN EACH HIGH TECH CITY STUDIED. NICK NYHAN,
PRESIDENT OF DYNAMIC LOGIC.

BY OUTSOURCING THE COLLECTION OF TECHNICAL RESOURCES, COMPANIES PROVIDE THEIR
ENTIRE INTERNAL IT STAFFS INSTANT ACCESS TO A GROWING AND CONSTANTLY UPDATED
COLLECTION OF COMPREHENSIVE TECHNICAL BOOKS AND SOURCE CODE WITH EARTHWEB'S
ITKNOWLEDGE, THEREBY HELPING THE IT PROFESSIONALS BE MORE PRODUCTIVE. JERRY
MICHALSKI, PRESIDENT OF SOCIATE AND FORMER MANAGING EDITOR OF THE NEWSLETTER
RELEASE 1.0.

EARTHWEB'S DICE.COM HAS ESTABLISHED ITSELF AS A LEADER IN ONLINE CAREER
MANAGEMENT AND WE'RE PLEASED TO BE WORKING WITH THEM. DAN BALLISTER, GO2NET'S
NATIONAL SALES DIRECTOR.

EARTHWEB BRINGS THE IT COMMUNITY HIGHLY SPECIALIZED CONTENT ON THE WEB. GABRIEL
ACOSTA-LOPEZ, DIRECTOR, PLATFORM DEVELOPMENT SERVICES AT PALM COMPUTING.


                                        4
<PAGE>
FINANCIAL REVIEW EARTHWEB INC.

SELECTED FINANCIAL DATA                                                        6

MANAGEMENT'S DISCUSSION AND ANALYSIS                                           7

CONSOLIDATED BALANCE SHEETS                                                   12

CONSOLIDATED STATEMENTS OF OPERATIONS                                         13

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                               14

CONSOLIDATED STATEMENTS OF CASH FLOWS                                         16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                    17

REPORT OF INDEPENDENT AUDITORS                                                26

QUARTERLY RESULTS OF OPERATIONS                                               27

CORPORATE INFORMATION                                                         28


                                       5
<PAGE>

SELECTED FINANCIAL DATA EARTHWEB INC.

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

The following selected financial data should be read in conjunction with the
financial statements and notes thereto and "Management's Discussion & Analysis
of Financial Condition and Results of Operations" included elsewhere in this
Annual Report. The statement of operations data for the years ended December 31,
1999, 1998 and 1997 and the balance sheet data as of December 31, 1999 and 1998
are derived from the audited financial statements of EarthWeb, and are included
elsewhere in this Annual Report. The balance sheet data as of December 31, 1997,
1996 and 1995 and the statement of operations data for the years ended December
31, 1996 and 1995 are derived from the audited financial statements of EarthWeb
not included herein. The historical results presented here are not necessarily
indicative of future results.

<TABLE>
<CAPTION>

YEARS ENDED DECEMBER 31,                               1999(1)          1998              1997             1996             1995
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>             <C>                <C>            <C>             <C>
STATEMENT OF OPERATIONS DATA:
Revenues                                            $ 31,050         $ 3,349          $ 1,135        $   472          $   --
Cost of Revenues                                      10,968           2,131            1,358            314              --
------------------------------------------------------------------------------------------------------------------------------------
Gross Profit (loss)                                   20,082           1,218             (223)           158              --
------------------------------------------------------------------------------------------------------------------------------------
Operating expenses
    Product development                                4,114           1,476            1,003             68              36
    Sales and marketing                               27,715           4,547            1,018            252              --
    General and administrative(2)                      9,875           3,356            2,567          1,802             626
    Depreciation                                       1,677             699              387            101              42
    Amortization                                      12,218             417              506             --              --
------------------------------------------------------------------------------------------------------------------------------------
       Total operating expenses                       55,599          10,495            5,481          2,223             704
------------------------------------------------------------------------------------------------------------------------------------
Loss from operations                                 (35,517)         (9,277)          (5,704)        (2,065)           (704)
Interest and other income, net                           804             307              267             61              (1)
------------------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations                      (34,713)         (8,970)          (5,437)        (2,004)           (705)
(Loss) income from discontinued operations                --              --           (2,384)           (42)             65
------------------------------------------------------------------------------------------------------------------------------------
Net Loss                                             (34,713)         (8,970)          (7,821)        (2,046)           (640)
====================================================================================================================================
Basic and diluted net loss per share
    from continuing operations                     $   (3.78)       $ (2.37)          $ (1.86)       $ (0.69)         $(0.24)
Basic and diluted net (loss) income per
    share from discontinued operations                    --              --            (0.81)         (0.01)           0.02
------------------------------------------------------------------------------------------------------------------------------------
Basic and diluted net loss per share               $   (3.78)       $  (2.37)         $ (2.67)       $ (0.70)         $(0.22)
====================================================================================================================================
Weighted average shares of common
    stock outstanding used in computing
    basic and diluted net loss per share           9,179,658       3,782,575        2,925,000      2,925,000       2,925,000
====================================================================================================================================

DOLLARS IN THOUSANDS                                    1999            1998             1997           1996            1995
------------------------------------------------------------------------------------------------------------------------------------

BALANCE SHEET DATA:
Cash and cash equivalents                            $13,054         $25,292           $4,775         $3,779            $886
Marketable securities                                  6,242              --               --             --              --
Working capital                                        5,524          23,418            4,317          3,315             865
Total assets                                          89,189          30,477            8,514          5,652           1,393
Long-term obligations                                  9,249              66               85             94              25
Stockholders' equity                                  58,910          26,852            6,445          4,259           1,251
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   INCLUDES THE RESULTS OF OPERATIONS OF BUSINESSES ACQUIRED IN 1999 FROM THE
      RESPECTIVE DATES OF ACQUISITION. SEE FOOTNOTE 3 TO THE CONSOLIDATED
      FINANCIAL STATEMENTS.

(2)   GENERAL AND ADMINISTRATIVE EXPENSES IN 1999 INCLUDE A ONE-TIME EXPENSE OF
      APPROXIMATELY $672,000 PRIMARILY RELATED TO STOCK OPTION GRANTS TO
      EMPLOYEES OF EARTHWEB KNOWLEDGE PRODUCTS AS PART OF THE ACQUISITION OF
      MICROHOUSE INTERNATIONAL, INC. SEE FOOTNOTE 3 TO THE CONSOLIDATED
      FINANCIAL STATEMENTS.


                                       6
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

---------------
Overview

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

EarthWeb is a leading business portal for the global IT industry. EarthWeb
provides a comprehensive set of business-to-business and
business-to-professional services and offers a central portal serving each of
the major vertical markets in the IT industry, including enterprise management,
networking and telecommunications, software and internet development, and
hardware and systems. EarthWeb's network serves various constituents of the IT
industry across vertical segments, including:

o IT managers                o Recruiters/HR managers   o Hardware manufacturers
o Programmers and engineers  o Corporate IT purchasers  o Value-added resellers
o Network managers           o Software publishers      o ITservice firms

      As a global intermediary for the IT industry, we are positioned as a
trusted third-party platform, offering an integrated environment where various
industry constituents can share information, manage their careers, recruit
personnel, and buy and sell products and services.

      From its inception in 1994 until mid-1997, EarthWeb primarily developed
and maintained Web sites and online commerce infrastructures for its customers.
During this period, substantially all of EarthWeb's revenues were derived from
development contracts, maintenance fees and software license fees. During 1996,
EarthWeb began developing online services for IT professionals. EarthWeb's
operations not related to providing online services to IT professionals were
discontinued in 1997 and have been recorded as discontinued operations for all
periods.

      Through December 31, 1998 EarthWeb purchased five Web sites to expand and
extend its online service offerings. In August 1997, EarthWeb acquired jars.com
("JARS"), the Web site of the Java Applet Rating Service, for $1.1 million. JARS
is a premier online service providing ratings and reviews of Java and other
source code. In February 1998, EarthWeb acquired the companion Web sites
htmlgoodies.com and javagoodies.com, which provide tutorials and other technical
resources for Web developers. In April 1998, EarthWeb acquired
intranetjournal.com, a leading online service for Intranet managers. In May
1998, EarthWeb acquired javascripts.com, an online service that complements
EarthWeb's other offerings by providing a large repository of JavaScript source
code. In July 1998, EarthWeb acquired datamation.com, which provides online
articles, resources and product analysis for IT enterprise managers. The
aggregate cost of these Web site acquisitions in 1998 totaled approximately
$949,000.

      In 1999, EarthWeb completed several acquisitions. In February 1999,
EarthWeb completed the acquisition of D&L Online, Inc. now known as EarthWeb
Career Solutions, Inc. ("EarthWeb Career Solutions"), which operates dice.com, a
leading online job posting service for information technology professionals, for
approximately $35 million. The purchase price consisted of $7.0 million in cash,
$5.5 million of which was paid in 1999 and the balance of which is payable in
February 2000 and 577,778 shares of EarthWeb common stock. The total
consideration also included additional future payments, based on the performance
of dice.com, in the form of EarthWeb common stock or cash with an aggregate
value of up to $12.0 million, payable over a period of 3 years. Of this
additional consideration, $4.0 million is payable in April 2000. Gocertify.com,
which provides users with information on technical certification programs, was
also acquired in February 1999. In March 1999, EarthWeb acquired substantially
all of the assets of The Perl Journal, a leading technical publication for
developers using the Perl programming language, and the related Web site
TPJ.com. The aggregate purchase price of both acquisitions was $980,000, of
which $750,000 is payable in March 2000. The consideration also consisted of
additional future payments to be made based upon future performance.

      In March 1999, EarthWeb acquired MicroHouse International, Inc., now known
as EarthWeb Knowledge Products, Inc. ("EarthWeb Knowledge Products"), for
approximately $9 million in shares of common stock, convertible notes payable
and cash. In addition, EarthWeb assumed $1.7 million of debt as part of the
acquisition. In July 1999, EarthWeb acquired the Web site SysOpt.com, an online
service which provides information on computer hardware products. In August
1999, EarthWeb acquired the Web site codeguru.com, an online service for Windows
programmers. The purchase price for both was approximately $12.0 million,
payable in the form of common stock, cash and a convertible note payable.
Additional consideration in the form of cash or common stock, with an aggregate
value of up to approximately $6.0 million, may be required to be paid if certain
contingencies are met. Such amounts would be payable through 2002.

      At December 31, 1999, EarthWeb had intangible assets of approximately
$53.8 million, primarily related to the acquisitions of D&L Online, Inc.,
MicroHouse International, Inc. and codeguru.com. Intangible assets are amortized
on a straight-line basis over a period of three to five years. These
acquisitions were accounted for using the purchase method of accounting, and
accordingly, the purchase price of each was allocated to assets acquired and
liabilities assumed based on their respective fair values. See Footnote 3 to the
consolidated financial statements.


                                       7
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

      EarthWeb currently derives a significant portion of its revenue from
advertising, including paid job listings, banners and sponsorships. EarthWeb
also derives revenues from sales of and subscriptions to our information
products and services, as well as a variety of commerce offerings.

      Advertising revenues are recognized over the period in which the
advertisements are displayed on EarthWeb's Web Sites, provided that no
significant obligations remain and collection of the receivables are reasonably
assured. Obligations for banner and sponsorship advertising typically include
guarantees of a minimum number of "impressions" (times that an advertisement is
viewed by users of EarthWeb's online services over a specified period of time).
Typically, if the minimum number of impressions is not achieved, EarthWeb will
extend the advertising campaign until the related guarantee is met, which would
result in delayed revenue recognition. EarthWeb records revenues and expenses
for barter transactions (receipt of advertisements or other goods or services in
exchange for advertisements on its online services) at the lesser of the
estimated fair value of the advertisements, goods or services received or the
fair value of the advertisements given. In future periods, management intends to
maximize cash advertising revenues, although EarthWeb will continue to enter
into barter advertising transactions as appropriate.

      In order to expand its online services, EarthWeb anticipates incurring
additional expenses to increase its product development and sales and marketing
efforts, pursue additional strategic acquisitions and support the growth of the
organization. The sales and marketing expenses will primarily include expenses
related to hiring additional employees and increasing advertising and brand
promotion activities. As a result of these expenditures and other factors,
EarthWeb expects to continue to incur losses in the foreseeable future.

      EarthWeb expects to experience significant fluctuations in its future
quarterly results due to a variety of factors, many of which are outside of
EarthWeb's control. These factors include the level of usage on the Internet,
demand for Internet advertising, the addition or loss of customers, the level of
user traffic on EarthWeb's online services, economic conditions specific to the
Internet industry and online media and economic conditions generally. Management
believes that its revenues are also subject to seasonal fluctuations because
advertisers generally place fewer advertisements during the first and third
calendar quarters of each year. EarthWeb believes that certain expenses as a
percentage of revenues may fluctuate between periods based on the growth of
revenues; however, EarthWeb expects expenses to continue to grow in absolute
dollars for the foreseeable future.

-----------------------
Results of Operations

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

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998 REVENUES.
Revenues for the year ended December 31, 1999 increased 827% to $31.0 million
from $3.3 million for the year ended December 31, 1998. Advertising revenues
including paid listings, banners and sponsorships represented 85% and 95% of
revenues for the years ended December 31, 1999 and 1998, respectively. The
increase in revenues was primarily due to growth in advertising revenues,
attributable to the acquisition of D&L Online, Inc. and increases in the number
of advertising customers and the average expenditure per customer. The net
impact on advertising revenues from the acquisition of D&L Online, Inc. was an
increase of approximately $15.9 million. For the year ended December 31, 1999 no
single advertiser accounted for more than 10% of revenues; two customers
accounted for 21% of revenues for the year ended December 31, 1998.

      Barter transactions accounted for approximately 10% and 25% of revenues
for the years ended December 31, 1999 and 1998, respectively. The decrease as a
percentage of revenue was primarily due to the increased revenues from acquired
companies that do not engage in significant barter transactions. For both
periods barter advertising revenues primarily related to the exchange of
advertisements, tradeshow booths, and other promotional activities with other
companies.

      COST OF REVENUES. EarthWeb's cost of revenues consists primarily of
employee salaries and related expenses,
consulting fees, royalties, Internet access and hosting fees and computer
systems related expenses required to support and deliver EarthWeb's online
services. Cost of revenues for the year ended December 31, 1999 increased 415%
to $11.0 million or 35.3% of net revenues from $2.1 million or 63.6% of net
revenues for the year ended December 31, 1998. The increase in cost of revenues
was primarily attributable to increased employee salaries and related expenses,
consulting fees, royalties, and computer systems related expenses due to the
expansion of EarthWeb's online service offerings, of which approximately $4.2
million related to the expenses of acquired businesses. Management expects costs
of revenues to increase in absolute dollars in future periods due to the growth
of EarthWeb's business.


                                       8
<PAGE>

      PRODUCT DEVELOPMENT EXPENSES. EarthWeb's product development expenses
consist primarily of employee salaries and related expenses, content conversion
costs, consulting fees and computer systems related expenses required to support
the development of new or enhanced service offerings. Product development
expenses for the year ended December 31, 1999 increased 179% to $4.1 million
from $1.5 million for the year ended December 31, 1998. The increase in product
development expenses was primarily attributable to the expansion of EarthWeb's
online services and product offerings. Management expects product development
expenses to increase due to the growth of EarthWeb's business.

      SALES AND MARKETING EXPENSES. Sales and marketing expenses consist
primarily of advertising (including expenses recorded for barter transactions),
employee salaries, commissions and related expenses of EarthWeb's sales force
and marketing personnel, tradeshow exhibition expenses and promotional
materials. Sales and marketing expenses for the year ended December 31, 1999
increased 510% to $27.7 million from $4.5 million for the year ended December
31, 1998. The increase was primarily attributable to an increase in advertising
expenses of $11.9 million of which approximately $4.1 million related to the
expenses of acquired businesses. Additionally, salaries, commissions and related
costs increased approximately $7.0 million due to the expansion of the sales
force, of which approximately $3.2 million related to the expenses of acquired
businesses. Barter transactions accounted for approximately 12% and 19% of sales
and marketing expenses for 1999 and 1998, respectively. Management expects sales
and marketing expenses to increase due to the planned increase in advertising
and promotional activities and continued growth of the salesforce.

      GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
consist primarily of employee salaries and related expenses for executive,
administrative, and accounting personnel, facility costs, recruiting fees and
professional fees. General and administrative expenses for the year ended
December 31, 1999 increased 194% to $9.9 million from $3.4 million for the year
ended December 31, 1998. The absolute dollar increase in general and
administrative expenses was primarily attributable to increased employee
salaries and related expenses, facilities costs, professional fees and
recruiting fees, of which approximately $3.1 million related to the expenses of
acquired businesses. Included in general and administrative expenses, EarthWeb
recorded a one-time expense of approximately $672,000 primarily related to the
April 1999 grant of stock options to employees of EarthWeb Knowledge Products in
connection with the acquisition of MicroHouse International, Inc. See Footnote 3
to the consolidated financial statements. Management expects general and
administrative expenses to increase in future periods due to the growth of the
business.

      DEPRECIATION. Depreciation consists primarily of depreciation of property
and equipment. Depreciation for the year ended December 31, 1999 increased 140%
to $1.7 million from $699,000 for the year ended December 31, 1998, of which
approximately $403,000 related to the expenses of acquired businesses. The
increase was primarily a result of additional property and equipment. Management
expects depreciation to increase due to the growth of EarthWeb's business.

      AMORTIZATION. Amortization consists primarily of amortization of
intangible assets related to acquisitions. Amortization for the year ended
December 31, 1999 increased to $12.2 million from $417,000 for the year ended
December 31, 1998. The increase in amortization expense was primarily a result
of additional amortization on intangible assets of which approximately $10.1
million related to the expenses of acquired businesses. Management expects
amortization to increase in 2000 due to the amortization of intangible assets
from several acquisitions.

      INTEREST AND OTHER INCOME, NET. Interest and other income, net consists
primarily of interest earned on cash and cash equivalents. Interest and other
income, net for the year ended December 31, 1999 increased 161% to $804,000 from
$307,000 for the year ended December 31, 1998. The increase was the result of
higher average cash balances during 1999, primarily from the proceeds of
EarthWeb's initial and secondary public offerings. Management expects interest
expense to increase in 2000 due to the issuance of convertible subordinated
notes in January 2000. See footnote 12 in the consolidated financial statements.

      INCOME TAXES. No provision for federal and state income taxes has been
recorded as EarthWeb has incurred net operating losses through December 31,
1999. As of December 31, 1999, EarthWeb had approximately $40.2 million of net
operating loss carryforwards for federal income tax purposes, available to
offset future taxable income. These net operating loss carryforwards will begin
to expire in 2011. Given EarthWeb's limited operating history, losses incurred
to date and the difficulty in accurately forecasting EarthWeb's future results,
management does not believe that the realization of the related deferred income
tax assets meets the criteria required by generally accepted accounting
principles and, accordingly, a full valuation allowance has been recorded.


                                        9
<PAGE>

MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997 REVENUES.
Revenues for the year ended December 31, 1998 increased 195% to $3.3 million
from $1.1 million for the year ended December 31, 1997. The increase in revenues
was due to an increase in advertising revenues of $2.2 million. Approximately
62% of the growth in advertising revenues was attributable to an increase in the
volume of advertising sold. A secondary reason for the increase in advertising
revenue was the ability of our in-house sales force to sell advertising at a
higher price (CPM). Management does not expect significant price increases in
the future and expects to derive growth in revenues primarily through increased
volume of advertising sold.

      Barter transactions accounted for approximately 25% and 16% of revenues
for the years ended December 31, 1998 and 1997, respectively. For both periods
barter advertising revenues primarily related to the exchange of advertisements
with other companies.

      COST OF REVENUES. Cost of revenues for the year ended December 31, 1998
increased 57% to $2.1 million or 63.6% of net revenues from $1.4 million or 120%
of net revenues for the year ended December 31, 1997. The increase in cost of
revenues was primarily attributable to increased consulting fees, employee
salaries and related expenses and freelance writing costs due to the expansion
of our online service offerings.

      PRODUCT DEVELOPMENT EXPENSES. Product development expenses for the year
ended December 31, 1998 increased 47% to $1.5 million from $1.0 million for the
year ended December 31, 1997. The increase in product development expenses was
primarily attributable to the expansion of our online service offerings, related
to the production of the ITKnowledge subscription service, which was launched in
October 1998.

      SALES AND MARKETING EXPENSES. Sales and marketing expenses for the year
ended December 31, 1998 increased 347% to $4.5 million from $1.0 million for the
year ended December 31, 1997. The increase was primarily attributable to an
increase in advertising expenses of $2.0 million and salaries and related
expenses (including payroll taxes and benefits) and related costs of $1.6
million for the in-house sales force, which did not exist during 1997. Barter
transactions accounted for approximately 19% and 18% of sales and marketing
expenses for 1998 and 1997, respectively. Management expects sales and marketing
expenses to increase due to the growth of its sales force and its planned
increase in advertising and promotional activities.

      GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
for the year ended December 31, 1998 increased 31% to $3.4 million from $2.6
million for the year ended December 31, 1997. The increase in general and
administrative expenses was primarily attributable to increased consulting fees,
professional fees and employee salaries and related expenses (including payroll
taxes & benefits). Management expects general and administrative expenses to
increase in future periods due to the growth of the business.

       DEPRECIATION AND AMORTIZATION. Depreciation and amortization for the year
ended December 31, 1998 increased 25% to $1.1 million from $893,000 for the year
ended December 31, 1997. The increase was primarily a result of additional
depreciation on property and equipment and amortization of intangible assets
from acquisitions.

      INTEREST AND OTHER INCOME, NET. Interest and other income, net for the
year ended December 31, 1998 increased 15% to $307,000 from $267,000 for the
year ended December 31, 1997. The increase was primarily the result of higher
average cash balances during 1998, primarily from the proceeds of our initial
public offering.

      INCOME TAXES. No provision for federal and state income taxes has been
recorded as we had incurred net operating losses through December 31, 1998. As
of December 31, 1998, we had approximately $16.3 million of net operating loss
carryforwards for federal income tax purposes, expiring through 2012, available
to offset future taxable income. Given our limited operating history, losses
incurred to date and the difficulty in accurately forecasting our future
results, management does not believe that the realization of the related
deferred income tax assets meets the criteria required by generally accepted
accounting principles and, accordingly, a full valuation allowance has been
recorded.

------------------
Liquidity and
Capital Resources

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

EarthWeb historically has satisfied its cash requirements primarily through
offerings of common stock and convertible preferred stock and lease financings.

      Net cash used in operating activities was $17.4 million for the year ended
December 31, 1999 and $6.5 million for the year ended December 31, 1998. Cash
used in operating activities for 1999 resulted from a net loss of $34.7 million,
an increase in accounts receivable of $2.6 million and an increase in prepaid
expenses and other assets of $1.6 million, offset by increases in accounts
payable and accrued expenses of $4.6 million, and other liabilities of $1.5
million, depreciation and amortization of $13.9 million and other non-cash
charges of $1.6 million. Cash used in operating activities for 1998 resulted
primarily from a net loss of $9.0 million and an increase in accounts receivable
of $0.8 million offset by an increase in accounts payable and accrued expenses
of $2.3 million and depreciation and amortization of $1.1 million.


                                       10
<PAGE>

      Net cash used in investing activities for the year ended December 31, 1999
of $19.5 million was primarily attributable to purchases of fixed assets of $3.9
million, acquisitions of $8.3 million and purchases of marketable securities and
other investments of $7.3 million. Net cash used in investing activities for the
year ended December 31, 1998 of $2.2 million was primarily attributable to
purchases of fixed assets of $1.1 million and acquisitions of $1.3 million.

      Net cash from financing activities was $24.7 million for the year ended
December 31, 1999 and $29.3 million for the year ended December 31, 1998. On May
7, 1999, EarthWeb completed a secondary public offering of 1,300,000 shares of
Common Stock at an offering price of $37.00 per share, of which 750,000 shares
were sold by EarthWeb and 550,000 shares were sold by selling stockholders.
Proceeds to EarthWeb, net of issuance costs, were approximately $25.4 million.
EarthWeb also received $1.0 million from the exercise of stock options and
purchases of EarthWeb's common stock under its Employee Stock Purchase Plan.
Offsetting these cash inflows was $1.7 million for payments on notes payable and
capital leases. In November 1998, EarthWeb completed its initial public offering
of common stock in which 2,100,000 shares were issued at a price of $14.00 per
share. Proceeds from the offering, net of offering costs, were approximately
$25.8 million. In June 1998, EarthWeb issued 433,965 shares of common stock to
EarthWeb LLC through a private placement, in consideration of net proceeds of
$3.7 million.

      In January 2000, EarthWeb completed a private offering pursuant to Rule
144A of $80.0 million of convertible subordinated notes. Proceeds to EarthWeb,
net of issuance costs, were approximately $77.0 million. See Footnote 12 to the
consolidated financial statements.

      EarthWeb will continue to evaluate possible acquisitions of, or
investments in, business products and technologies that are complementary to
those of the Company, which may require the use of cash. Management believes
that existing cash balances will be sufficient to meet anticipated cash
requirements for at least the next twelve months; however, EarthWeb may sell
additional equity or debt securities or obtain credit facilities. The sale of
additional securities could result in dilution to EarthWeb's stockholders.

-------------
Year 2000

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

      The Company did not experience any significant malfunctions or errors in
its information or business systems when the date changed from 1999 to 2000.
Based on its operations since January 1, 2000, the Company does not expect any
significant problems related to the Year 2000 issue, although there can be no
assurance of this. For example, it is possible that Year 2000 or similar issues,
such as leap year related problems, may occur with financial closings. The
Company believes that any such problems will be minor and easily corrected. In
addition, the Company could still be negatively impacted if the Year 2000 or
similar issues adversely affect its customers or suppliers. Currently, the
Company is not aware of any significant Year 2000 or similar problems that have
arisen with its customers or suppliers.

----------------------------------
Recent Accounting Pronouncements

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

The Financial Accounting Standards Board recently issued statement number 137,
"Accounting for Derivative Instruments and Hedging Activities-Deferral of
Effective Date of FASB Statement No. 133." The statement defers for one year the
effective date of statement number 133, "Accounting for Derivative Instruments
and Hedging Activities." Statement number 133 will now be effective for all
fiscal quarters of all fiscal years beginning after June 15, 2000. Statement
number 133 will require EarthWeb to recognize all derivatives on the balance
sheet at fair value. Derivatives that are not hedges must be adjusted to fair
value through income. If the derivative is a hedge, depending on the nature of
the hedge, changes in the fair value of derivatives will either be offset
against the change in fair value of the hedged assets, liabilities, or firm
commitments through earnings or recognized in other comprehensive income until
the hedged item is recognized in earnings. EarthWeb does not believe the
adoption of this standard will have a material effect on EarthWeb's results of
operations.

      In November 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 100, "Restructuring and Impairment
Charges." In December 1999, the SEC issued SAB No. 101, "Revenue Recognition in
Financial Statements." SAB No. 100 expresses the views of the SEC staff
regarding the accounting for and disclosure of certain expenses not commonly
reported in connection with exit activities and business combinations. This
includes the accrual of exit and employee termination costs and the recognition
of impairment charges. SAB No. 101 expresses the views of the SEC staff in
applying generally accepted accounting principles to certain revenue
recognition issues. EarthWeb does not believe that these SABs have a material
impact on its financial position or its results of operations.


                                       11
<PAGE>

CONSOLIDATED BALANCE SHEETS EARTHWEB INC.

<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,                                                                   1999                 1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                  <C>
ASSETS:
Current assets:
    Cash and cash equivalents                                                         $ 13,054,027         $ 25,292,229
    Marketable securities                                                                6,241,837                   --
    Accounts receivable, net                                                             4,775,638            1,143,681
    Prepaid expenses and other current assets                                            2,482,408              541,686
-----------------------------------------------------------------------------------------------------------------------------------
       Total current assets                                                             26,553,910           26,977,596
Fixed assets, net                                                                        7,272,272            2,068,752
Intangible assets, net                                                                  53,789,500            1,069,220
Other assets                                                                             1,573,057              361,816
-----------------------------------------------------------------------------------------------------------------------------------
       Total assets                                                                   $ 89,188,739         $ 30,477,384
===================================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
    Accounts payable                                                                  $  4,347,072         $  1,805,076
    Accrued expenses                                                                     7,665,432            1,519,807
    Other current liabilities                                                            8,530,917              157,714
    Notes payable--short-term                                                              486,222                   --
    Discontinued operations (accrued expenses)                                                  --               76,696
-----------------------------------------------------------------------------------------------------------------------------------
       Total current liabilities                                                        21,029,643            3,559,293
Convertible notes payable                                                                5,742,977                   --
Notes payable-long-term                                                                    781,568                   --
Other liabilities                                                                        2,724,864               65,686
------------------------------------------------------------------------------------------------------------------------------------
       Total liabilities                                                                30,279,052            3,624,979

Commitments and contingencies                                                                   --                   --
Stockholders' equity:
    Preferred stock, par value $.01; 2,000,000 authorized, none issued                          --                   --
    Common stock, par value $.01; 21,750,000 authorized,
       9,817,722 and 7,903,761 issued                                                       98,177               79,038
    Additional paid in capital                                                         111,283,402           44,582,477
    Unearned compensation                                                                 (386,291)            (326,562)
    Accumulated comprehensive other income                                                 110,067                   --
    Treasury stock at cost, 4,713 shares                                                  (199,970)            (199,970)
    Accumulated deficit                                                                (51,995,698)         (17,282,578)
------------------------------------------------------------------------------------------------------------------------------------
       Total stockholders' equity                                                       58,909,687           26,852,405
------------------------------------------------------------------------------------------------------------------------------------
       Total liabilities and stockholders' equity                                     $ 89,188,739          $30,477,384
====================================================================================================================================
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.


                                       12
<PAGE>

CONSOLIDATED STATEMENTS OF OPERATIONS EARTHWEB INC.

<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,                                                       1999                1998                 1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                <C>              <C>
Revenues                                                                  $ 31,049,716       $ 3,349,165      $ 1,135,141
Cost of revenues                                                            10,967,513         2,131,593        1,358,293
------------------------------------------------------------------------------------------------------------------------------------

Gross profit (loss)                                                         20,082,203         1,217,572         (223,152)
------------------------------------------------------------------------------------------------------------------------------------

Operating expenses:
    Product development                                                      4,113,535         1,475,665        1,003,422
    Sales and marketing                                                     27,715,121         4,546,839        1,018,313
    General and administrative                                               9,875,256         3,356,567        2,566,670
    Depreciation                                                             1,676,699           698,621          386,740
    Amortization                                                            12,218,466           417,077          505,860
------------------------------------------------------------------------------------------------------------------------------------
    Total operating expenses                                                55,599,077        10,494,769        5,481,005
------------------------------------------------------------------------------------------------------------------------------------
Loss from operations                                                       (35,516,874)       (9,277,197)      (5,704,157)

Interest and other income, net                                                 803,754           307,409          267,139
------------------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations                                            (34,713,120)       (8,969,788)      (5,437,018)
Discontinued operations:
    Loss from discontinued operations                                               --                --       (2,142,934)
    Loss on disposal of discontinued operations                                     --                --         (240,585)
------------------------------------------------------------------------------------------------------------------------------------

Net loss                                                                  $(34,713,120)      $(8,969,788)     $(7,820,537)
====================================================================================================================================
Basic and diluted net loss per share from continuing operations           $      (3.78)      $     (2.37)     $     (1.86)

Basic and diluted net loss per share from discontinued operations         $         --       $        --      $     (0.81)
------------------------------------------------------------------------------------------------------------------------------------

Basic and diluted net loss per share                                      $      (3.78)      $     (2.37)     $     (2.67)
------------------------------------------------------------------------------------------------------------------------------------
Weighted average shares of common stock outstanding
    used in computing basic and diluted net loss per share                   9,179,658         3,782,575        2,925,000
====================================================================================================================================
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.


                                       13
<PAGE>

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY EARTHWEB INC.

<TABLE>
<CAPTION>

                                           CONVERTIBLE PREFERRED                                     ADDITIONAL
                                           STOCK SERIES A AND B               COMMON STOCK              PAID IN
                                           SHARES         AMOUNT         SHARES          AMOUNT         CAPITAL
---------------------------------------------------------------------------------------------------------------------
<S>                                        <C>          <C>           <C>                <C>            <C>
BALANCE AT DECEMBER 31, 1996                  653,111   $ 6,531       2,925,000        $ 29,250     $ 4,715,649

Issuance of Series B convertible
    preferred stock                           568,182     5,682                                       9,494,316
Conversion of promissory note for
    Series B convertible preferred stock       29,904       299                                         499,701
Issuance of non-qualified stock options                                                                   5,948
Net loss
---------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1997                1,251,197    12,512       2,925,000          29,250      14,715,614
Issuance of common stock                                              2,536,446          25,364      29,465,517
Exercise of stock options                                                 2,482              26           3,792
Issuance of non-qualified stock options                                                                  41,430
Issuance of stock options below deemed
    fair value for accounting purposes                                                                  368,010
Amortization of deferred compensation
Conversion of preferred stock              (1,251,197)  (12,512)      2,439,833          24,398         (11,886)
Purchase of treasury stock
Net loss
---------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1998                       --        --       7,903,761          79,038      44,582,477
Issuance of common stock                                                750,000           7,500      24,967,017
Exercise of stock options                                               208,067           2,081         965,907
Stock issued in employee stock
    purchase plan                                                        34,217             342         463,974
Stock and stock options issued in
    acquisitions                                                        921,677           9,216      40,056,176
Forfeitures of below market
    stock options                                                                                      (234,019)
Amortization of unearned
    compensation
Beneficial conversion feature on
    notes payable                                                                                       481,870
Comprehensive loss:
Unrealized gains on "available-for-sale"
    marketable securities
    Net loss
---------------------------------------------------------------------------------------------------------------------
    Comprehensive loss
---------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1999                       --   $    --       9,817,722   $      98,177   $ 111,283,402
=====================================================================================================================
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.


                                       14
<PAGE>

<TABLE>
<CAPTION>

                                       UNREALIZED GAIN ON
                                        "AVAILABLE - FOR -
                                           SALE MARKETABLE           UNEARNED    ACCUMULATED     TREASURY STOCK
                                                SECURITIES       COMPENSATION        DEFICIT   SHARES       AMOUNT          TOTAL

------------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                  <C>            <C>            <C>      <C>           <C>
BALANCE AT DECEMBER 31, 1996                $           --       $         --   $   (492,253)      --   $       --    $  4,259,177
Issuance of Series B convertible
    preferred stock                                                                                                      9,499,998
Conversion of promissory note for
    Series B convertible preferred stock                                                                                   500,000
Issuance of non-qualified stock options                                                                                      5,948
Net loss                                                                          (7,820,537)                           (7,820,537)
------------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1997                                                      (8,312,790)     --            --       6,444,586
Issuance of common stock                                                                                                29,490,881
Exercise of stock options                                                                                                    3,818
Issuance of non-qualified stock options                                                                                     41,430
Issuance of stock options below deemed
    fair value for accounting purposes                               (368,010)                                                  --
Amortization of deferred compensation                                  41,448                                               41,448
Conversion of preferred stock                                              --                                                   --
Purchase of treasury stock                                                                     (4,713)    (199,970)       (199,970)
Net loss                                                                          (8,969,788)                           (8,969,788)
------------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1998                            --           (326,562)   (17,282,578)  (4,713)    (199,970)     26,852,405
Issuance of common stock                                                                                                24,974,517
Exercise of stock options                                                                                                  967,988
Stock issued in employee stock
    purchase plan                                                                                                          464,316
Stock and stock options issued in
    acquisitions                                                   (1,060,000)                                          39,005,392
Forfeitures of below market
    stock options                                                     234,019                                                   --
Amortization of unearned
    compensation                                                      766,252                                              766,252
Beneficial conversion feature on
    notes payable                                                                                                          481,870
Comprehensive loss:
Unrealized gains on "available-for-sale"
    marketable securities                          110,067                                                                 110,067
    Net loss                                                                     (34,713,120)                          (34,713,120)
------------------------------------------------------------------------------------------------------------------------------------
    Comprehensive loss                                                                                                 (34,603,053)
------------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1999                      $110,067       $   (386,291)  $(51,995,698)  (4,713)  $ (199,970)   $ 58,909,687
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       15
<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS EARTHWEB INC.

<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,                                               1999                   1998                   1997
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                    <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                  $(34,713,120)          $ (8,969,788)           $(7,820,537)
    Adjustments to reconcile net loss to net cash
       used in operating activities:
       Depreciation                                              1,676,699                698,621                386,740
       Amortization                                             12,218,466                417,077                505,860
       Charge related to issuance of stock options                 766,252                 82,878                  5,948
       Interest accrued on convertible notes                       376,128                     --                     --
       Provision for doubtful accounts                             426,210                 42,650                 10,505
       Reserve for discontinued operations                              --                     --                443,527

       CHANGES IN OPERATING ASSETS AND LIABILITIES:
           Accounts receivable                                 (2,640,195)               (810,370)              (285,287)
           Prepaid expenses and other current assets           (1,613,040)               (306,444)              (159,321)
           Other assets                                                --                 (19,142)               (32,080)
           Accounts payable and accrued expenses                4,566,257               2,294,223                364,877
           Other liabilities                                    1,521,620                 (10,767)                89,389
           Discontinued operations                                     --                  36,221               (235,526)
--------------------------------------------------------------------------------------------------------------------------------
       Net cash used in operating activities                  (17,414,723)             (6,544,841)            (6,725,905)
--------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of fixed assets                                  (3,862,613)             (1,147,512)              (954,432)
    Acquisitions                                               (8,330,410)             (1,310,300)              (811,876)
    Investments in marketable securities                       (6,840,720)                     --                     --
    Restricted cash                                              (500,000)                225,000               (512,000)
-------------------------------------------------------------------------------------------------------------------------------
       Net cash used in investing activities                  (19,533,743)             (2,232,812)            (2,278,308)
--------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from bridge financing                                     --                      --                500,000
    Proceeds from issuance of preferred stock, net                     --                      --              9,499,998
    Proceeds from issuance of common stock, net                26,405,849              29,494,699                     --
    Purchase of treasury stock                                         --                (199,970)                    --
    Payments of long-term debt                                 (1,695,585)                     --                     --
-------------------------------------------------------------------------------------------------------------------------------
       Net cash provided by /nancing activities                24,710,264              29,294,729              9,999,998
Net increase/(decrease) in cash for the period                (12,238,202)             20,517,076                995,785

Cash and cash equivalents, beginning of period                 25,292,229               4,775,153              3,779,368
-------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                      $13,054,027            $ 25,292,229            $ 4,775,153
===============================================================================================================================
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.


                                       16
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS EARTHWEB INC.

----------------
1. The Company

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

EarthWeb Inc. ("EarthWeb") is a leading business portal for the global IT
industry. EarthWeb provides a comprehensive set of business-to-business and
business-to-professional services and offers a central portal serving each of
the major vertical markets in the IT industry, including enterprise management,
networking and telecommunications, software and internet development, and
hardware and systems. EarthWeb is positioned as a trusted third party platform
offering an integrated environment where various industry constituents can share
information, manage their careers, recruit personnel and buy and sell products
and services.

      EarthWeb was incorporated in the State of New York on April 25, 1996 and
subsequently re-incorporated in the State of Delaware on June 17, 1997.

      EarthWeb has sustained net losses and negative cash flows from operations
since its inception. EarthWeb's ability to meet its obligations in the ordinary
course of business is dependent upon its ability to establish proratable
operations or raise additional financing through public or private equity or
debt financings, collaborative or other arrangements with corporate sources, or
other sources of financing to fund operations. During 1998, EarthWeb received
financing of approximately $29.5 million primarily through an initial public
offering of common stock in November 1998. In May 1999, EarthWeb completed a
secondary public offering of common stock raising approximately $25.4 million.
In January 2000, EarthWeb completed a private offering pursuant to Rule 144A of
convertible subordinated notes. Proceeds to EarthWeb, net of issuance costs,
were approximately $77.0 million. See Footnote 12.

------------------------------------
2. Significant Accounting Policies
and Procedures

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

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of EarthWeb and its
subsidiaries, EarthWeb Career Solutions, Inc. and EarthWeb Knowledge Products,
Inc. All significant intercompany balances and transactions have been eliminated
in consolidation.

REVENUE RECOGNITION

EarthWeb generates several types of revenue including the following:

      ADVERTISING Advertising revenues include paid job listings, banners and
sponsorships and are recognized over the period in which the advertisements are
displayed on EarthWeb's Web sites, provided that no significant company
obligations remain and collection of the receivables are reasonably assured.
Obligations for banner and sponsorship advertising typically include guarantees
of a minimum number of "impressions" (times that an advertisement is viewed by
users of EarthWeb's online services over a specified period of time). To the
extent that minimum guaranteed impressions are not met, EarthWeb defers
recognition of the corresponding revenues until the guaranteed impressions are
achieved. For the years ended December 31, 1999, 1998 and 1997, advertising
revenues represented approximately 85%, 95% and 86% of revenues from continuing
operations, respectively.

      Revenues from barter transactions are recorded at the lower of the
estimated fair value of the advertisements, goods or services received or the
estimated fair value of the advertisements given. Revenue from barter
transactions (representing advertisements given) is recognized as income when
advertisements are delivered on EarthWeb's Web sites. Barter expense
(representing advertisements received) is recognized when EarthWeb's
advertisements are run on other companies' Web sites, which is typically in the
same period when the related barter revenue is recognized. For the years ended
December 31, 1999, 1998 and 1997, barter transactions represented 10%, 25% and
16% of revenues from continuing operations, respectively.

      SUBSCRIPTION REVENUE EarthWeb offers monthly, quarterly and annual
subscriptions to ITknowledge.com, TPJ.com and SupportSource.com. Subscription
revenue is either recognized ratably over the life of the subscription or, when
a subscription includes the receipt of updates, over the term of the total
deliveries based on the relative value of each delivered update. Accordingly,
amounts received for services which have not yet been provided are reflected as
deferred revenue in the accompanying balance sheets.

      PRODUCT SALES EarthWeb sells information products for IT training classes.
Educational courseware revenue is recognized when technical support information
is shipped. In addition, EarthWeb has agreements with product manufacturers
where publications and software are sold on EarthWeb's Web sites. EarthWeb
records the revenue earned and the related royalty due to the vendor as cost of
revenues when the products are sent to customers and collectibility is
reasonably assured.


                                       17
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CASH AND CASH EQUIVALENTS

All highly liquid investments with maturities of three months or less when
purchased are considered cash equivalents.

CONCENTRATION OF CREDIT RISK

Substantially all of EarthWeb's excess cash has been invested in highly liquid
investments. EarthWeb performs ongoing credit evaluations of its customers'
financial condition and generally does not require collateral on accounts
receivable. EarthWeb maintains allowances for credit losses and such losses have
been within management's expectations. EarthWeb's services are provided to
customers in several industries worldwide.

      Accounts receivable are stated net of allowances for doubtful accounts of
approximately $665,000 and $53,000 as of December 31, 1999 and 1998,
respectively. One customer accounted for 12% of the accounts receivable balance
at December 31, 1999 and two customers accounted for 31% of the accounts
receivable balance at December 31, 1998. For the year ended December 1999, no
single customer accounted for more than 10% of revenue, and two customers
accounted for 21% of revenues for the year ended December 31, 1998.

MARKETABLE SECURITIES

Marketable securities are comprised of U.S. government securities and corporate
equity securities with readily determinable market values. Marketable securities
are classified and accounted for as "available-for-sale" and are reported at
fair market value with the resulting net unrealized gains or losses reported as
a separate component of stockholders' equity.

FIXED ASSETS

Depreciation of equipment, furniture and fixtures and computer software is
provided for by the straight-line method over estimated useful lives ranging
from three to five years. Amortization of leasehold improvements is provided for
over the lesser of the term of the related lease or the estimated useful life of
the improvement. The cost of additions and betterments is capitalized, and
repairs and maintenance costs are charged to operations in the periods incurred.

INTANGIBLE ASSETS

Intangible assets, resulting from acquisitions of Web sites and other assets,
are being amortized using the straight-line method over three to five years.

LONG-LIVED ASSETS

The carrying amount of assets is reviewed on a regular basis for the existence
of facts or circumstances, both internally and externally, that suggest
impairment. EarthWeb determines if the carrying amount of a long-lived asset is
impaired based on anticipated undiscounted cash flows before interest. In the
event of impairment, a loss is recognized based on the amount by which the
carrying amount exceeds fair value of the asset. Fair value is determined
primarily using the anticipated cash flows before interest, discounted at a rate
commensurate with the risk involved.

INCOME TAXES

EarthWeb recognizes deferred taxes by the asset and liability method of
accounting for income taxes. Under this method, deferred income taxes are
recognized for differences between the financial-statement and tax bases of
assets and liabilities at enacted statutory tax rates in effect for the years in
which the differences are expected to reverse. The effect on deferred taxes of a
change in tax rates is recognized in income in the period that includes the
enactment date. In addition, valuation allowances are established when necessary
to reduce deferred tax assets to the amounts expected to be realized. The
primary sources of temporary differences are depreciation of fixed assets and
amortization of intangible assets and operating loss carryforwards.

RISKS AND UNCERTAINTIES

EarthWeb has a limited operating history and its prospects are subject to the
risks, expenses and uncertainties frequently encountered by companies in the new
and rapidly evolving markets for Internet products and services. These risks
include the failure to develop and extend EarthWeb's online service brands, the
rejection of EarthWeb's services by Web customers, vendors and/or subscribers,
the inability of EarthWeb to maintain and increase the levels of traffic on its
online services, as well as other risks and uncertainties. In the event that
EarthWeb does not successfully implement its business plan, certain assets may
not be recoverable.


                                       18
<PAGE>

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from these estimates. EarthWeb's significant estimates include the
useful lives of fixed assets and intangibles, the accounts receivable allowance
for doubtful accounts and the income tax valuation allowance.

NET LOSS PER SHARE

Basic earnings per share excludes any dilutive effect of options, warrants and
convertible securities. Basic earnings per share is computed using the
weighted-average number of common shares outstanding during the period. Diluted
earnings per share is computed using the weighted-average number of common and
common stock equivalent shares outstanding during the period. Common equivalent
shares have been excluded from the computation as their effect is antidilutive
for all years. Net loss per share amounts for all periods have been restated to
conform to SFAS No. 128 requirements. There were 1,839,798, 498,962 and 200,090
options outstanding as of December 31, 1999, 1998 and 1997, respectively, that
could potentially dilute earnings per share in the future. Such options were not
included in the computation of diluted loss per share because to do so would
have been antidilutive for all periods presented.

STOCK SPLIT

EarthWeb authorized and implemented a 0.65-for-one reverse stock split in
connection with the initial public offering of EarthWeb's common stock on
November 10, 1998. All references to the number of shares of common stock have
been retroactively restated in the financial statements to reflect the effect of
this transaction.

COMPREHENSIVE INCOME

EarthWeb adopted the provisions of SFAS No. 130, "Reporting Comprehensive
Income" in 1998. SFAS No. 130 establishes standards for reporting comprehensive
income and its components in financial statements. Comprehensive income, as
defined, includes all changes in equity (net assets) during a period from
non-owner sources.

SEGMENTS

EarthWeb adopted the provisions of SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" in 1998. This statement establishes
standards for the way companies report information about operating segments in
annual financial statements. It also establishes standards for related
disclosures about products and services, geographic areas and major customers.
EarthWeb has determined that it does not have any separately reportable business
segments as of December 31, 1999.

RECLASSIFICATIONS

Certain amounts from the prior year have been reclassified to conform with the
current year presentation.

RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board recently issued statement number 137,
"Accounting for Derivative Instruments and Hedging Activities-Deferral of
Effective Date of FASB Statement No. 133." The statement defers for one year the
effective date of statement number 133, "Accounting for Derivative Instruments
and Hedging Activities." Statement number 133 will now be effective for all
fiscal quarters of all fiscal years beginning after June 15, 2000. Statement
number 133 will require EarthWeb to recognize all derivatives on the balance
sheet at fair value. Derivatives that are not hedges must be adjusted to fair
value through income. If the derivative is a hedge, depending on the nature of
the hedge, changes in the fair value of derivatives will either be offset
against the change in fair value of the hedged assets, liabilities, or firm
commitments through earnings or recognized in other comprehensive income until
the hedged item is recognized in earnings. EarthWeb does not believe the
adoption of this standard will have a material effect on EarthWeb's results of
operations.

      In November 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 100, "Restructuring and Impairment
Charges." In December 1999, the SEC issued SAB No. 101, "Revenue Recognition in
Financial Statements." SAB No. 100 expresses the views of the SEC staff
regarding the accounting for and disclosure of certain expenses not commonly
reported in connection with exit activities and business combinations. This
includes the accrual of exit and employee termination costs and the recognition
of impairment charges. SAB No. 101 expresses the views of the SEC staff in
applying generally accepted accounting principles to certain revenue recognition
issues. EarthWeb does not believe that these SABs have a material impact on its
financial position or its results of operations.


                                       19
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

------------------
3. Acquisitions

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

In February 1998, EarthWeb acquired the companion Web sites htmlgoodies.com and
javagoodies.com. In April 1998, EarthWeb acquired intranetjournal.com. In May
1998, EarthWeb acquired javascripts.com. In July 1998, EarthWeb acquired
substantially all of the assets of the Web site datamation.com. In conjunction
with the acquisition of datamation.com, EarthWeb also licensed, on a
non-exclusive, fully paid basis from the seller, the right to use certain
customer lists for the purposes of marketing EarthWeb's products and services.
The aggregate cost of these Web site acquisitions totaled approximately
$949,000.

      In February 1999, EarthWeb completed the acquisition of D&L Online, Inc.,
now known as EarthWeb Career Solutions, Inc., which operates dice.com, a leading
online job posting service for information technology professionals, for
approximately $35 million. The purchase price consisted of $7.0 million in cash,
$5.5 million of which was paid in 1999 and the balance of which is payable in
February 2000 and 577,778 shares of EarthWeb common stock. The total
consideration also included additional future payments, based on the performance
of dice.com, in the form of EarthWeb common stock or cash with an aggregate
value of up to $12.0 million, payable over a period of 3 years. Of this
additional consideration, $4.0 million is payable in April 2000. All outstanding
options to purchase D&L Online, Inc. common stock were converted into
non-qualified options to purchase an aggregate of 36,667 shares of EarthWeb Inc.
common stock. Under the terms of the agreement and a related escrow agreement,
an aggregate of 57,778 shares of EarthWeb common stock is being held in escrow
for 18 months for the purpose of indemnifying EarthWeb against certain
liabilities of D&L Online, Inc. and its stockholders.

      In February 1999, EarthWeb acquired gocertify.com, which provides users
with information on technical certification programs. In March 1999, EarthWeb
acquired substantially all the assets of The Perl Journal, a leading technical
publication for developers using the Perl programming language, and the related
Web site TPJ.com. The aggregate purchase price of both acquisitions was
$980,000, of which $750,000 is payable in March 2000. The consideration also
consists of additional future payments, based on performance, in the form of
cash or stock, with an aggregate value of $500,000.

      In March 1999, EarthWeb acquired all of the capital stock of MicroHouse
International, Inc., now known as EarthWeb Knowledge Products, Inc., for
approximately $9 million. The consideration paid by EarthWeb consisted of (a)
$1.6 million in cash, $95,000 of which is payable in 2000, (b) 50,856 shares of
EarthWeb common stock, and (c) promissory notes in an aggregate amount of
approximately $5.0 million convertible into 126,475 shares of common stock in
March 2000. The beneficial conversion feature related to the notes payable of
approximately $482,000 is being amortized over the one year life of the notes
payable. In addition, EarthWeb assumed $1.7 million of debt as part of the
acquisition.

      In July 1999, EarthWeb acquired the Web site SysOpt.com, an online service
which provides information on computer hardware products. In August 1999,
EarthWeb acquired the website codeguru.com, an online service for Windows
programmers. The purchase price for both was approximately $12.0 million,
payable in the form of common stock, cash and a convertible note payable.
Additional consideration in the form of cash or common stock, with an aggregate
value of up to approximately $6.0 million may be required to be paid if certain
contingencies are met. Such amounts would be pay able through 2002.

      Amortization expense of intangible assets resulting from these
acquisitions totaled $12,218,000 and $404,000 in the years ended December 31,
1999 and 1998, respectively. These acquisitions were accounted for using the
purchase method of accounting. The results of operations for each were included
with those of EarthWeb for periods subsequent to the date of each acquisition.

      The following unaudited pro forma summary presents consolidated results of
operations for EarthWeb as if the acquisitions of D&L Online, Inc., MicroHouse
International, Inc., codeguru.com and SysOpt.com had been consummated on the
beginning of each year presented. The unaudited pro forma information is
intended for informational purposes only and is not necessarily indicative of
the future financial results of operations of EarthWeb after the acquisitions or
of the financial results of operations of EarthWeb that would have actually
occurred had the acquisitions been affected in the beginning of each year
presented.

YEAR ENDED DECEMBER 31,                                  1999              1998
--------------------------------------------------------------------------------
Revenues                                         $ 33,130,749      $ 15,279,498
Net loss                                         $(47,837,659)     $(23,989,092)
Basic and diluted loss per share                 $      (5.08)     $      (5.11)
Weighted average of common stock outstanding     9,417,186            4,695,723
--------------------------------------------------------------------------------


                                       20
<PAGE>

      Pro forma adjustments include: (i) amortization of goodwill and other
intangible assets recorded as a result of the acquisitions, (ii) adjustment
related to D&L Online, Inc. S corporation distribution which was recorded as
compensation expense that will not be incurred in the future, as well as to
record the associated tax charge which does not assume the utilization of
EarthWeb's net operating loss carryforwards, (iii) adjustment to record
compensation expense related to options issued to EarthWeb Knowledge Products
employees to purchase common stock at an exercise price below the fair market
value of the EarthWeb common stock at the date of grant, (iv) adjustment to
reflect the accretion of the discount on the convertible notes issued in the
connection with the acquisition of MicroHouse International, Inc. and (v)
adjustment of the weighted average shares of common stock outstanding used in
the calculation of earnings per share to reflect shares issued in connection
with all of the acquisitions.

-----------------------------
4. Discontinued Operations

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

In November 1997, EarthWeb formalized its plan to discontinue its professional
services and software products divisions. Accordingly, operating results have
been reclassified and reported in discontinued operations.

      Operating results of the discontinued operations are as follows:

<TABLE>
<CAPTION>
                                                                          PROFESSIONAL        SOFTWARE
                                     TOTAL               TOTAL                SERVICES        PRODUCTS                  TOTAL
                                      1999                1998                    1997            1997                   1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>              <C>                  <C>               <C>                  <C>
Revenues                              $  --            $     --             $2,303,813        $   476,170          $ 2,779,983
Expenses                                 --                  --              1,361,046          3,802,456            5,163,502
------------------------------------------------------------------------------------------------------------------------------------
Net (loss) income                     $  --            $     --             $  942,767        $(3,326,286)         $(2,383,519)
====================================================================================================================================
</TABLE>

Assets and liabilities of the discontinued operations are as follows at December
31:

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>              <C>                  <C>               <C>                   <C>
Accounts receivable                   $  --            $     --             $  253,052        $   150,000           $ 403,052
Accrued expenses                         --              76,696                103,585            339,942             443,527
------------------------------------------------------------------------------------------------------------------------------------
    Net assets (liabilities)          $  --            $(76,696)            $  149,467        $  (189,942)          $ (40,475)
====================================================================================================================================
</TABLE>

---------------------------
5. Marketable Securities

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

EarthWeb's marketable securities are stated at fair value. The following table
shows the cost, unrealized gains, accrued interest and fair value of EarthWeb's
marketable securities as of December 31, 1999:

<TABLE>
<CAPTION>
                                                                            UNREALIZED            ACCRUED
                                   MATURITY                COST                  GAINS           INTEREST          FAIR VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>              <C>                  <C>               <C>                   <C>
Corporate equity securities             N/A           $ 119,751            $   110,067       $         --          $  229,818
U.S. Government                      WITHIN
    and agencies                     1 YEAR           6,009,226                     --              2,793           6,012,019
------------------------------------------------------------------------------------------------------------------------------------
Total                                                $6,128,977            $   110,067             $2,793          $6,241,837
====================================================================================================================================
</TABLE>

------------------------------
6. BALANCE SHEET COMPONENTS

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

Property and equipment consist of the following:

<TABLE>
<CAPTION>
December 31,                                                                                         1999                1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                           <C>                  <C>
Computer equipment and software                                                               $ 8,682,809          $2,348,249
Furniture and fixtures                                                                          1,126,161             499,425
Leasehold improvements                                                                            864,858             635,627
------------------------------------------------------------------------------------------------------------------------------------
                                                                                               10,673,828           3,483,301
    Less, accumulated depreciation and amortization                                            (3,401,556)         (1,414,549)
------------------------------------------------------------------------------------------------------------------------------------
Total                                                                                         $ 7,272,272          $2,068,752
====================================================================================================================================
</TABLE>


                                       21
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      Depreciation and amortization of property and equipment for the years
ended December 31, 1999, 1998 and 1997 totaled approximately $1,677,000,
$699,000 and $529,000, respectively.

<TABLE>
<CAPTION>

December 31,                                                                                          1999               1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                           <C>                  <C>
INTANGIBLE ASSETS:
Goodwill                                                                                      $ 34,272,434         $       --
Other Intangible Assets                                                                         32,627,511          1,961,268
Less: Accumulated Amortization                                                                 (13,110,445)          (892,048)
------------------------------------------------------------------------------------------------------------------------------------
Intangible Assets, Net                                                                        $ 53,789,500         $1,069,220
====================================================================================================================================

OTHER CURRENT LIABILITIES:
Deferred revenues                                                                             $  2,006,171         $   78,622
Payments due for acquisition                                                                     5,500,000                 --
Other                                                                                            1,024,746             79,092
------------------------------------------------------------------------------------------------------------------------------------
Other current liabilities                                                                     $  8,530,917         $  157,714
====================================================================================================================================
</TABLE>

-----------------------------------------
7. Long-Term Debt and Convertible Notes

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

As part of the consideration paid in the acquisition of MicroHouse
International, Inc., EarthWeb issued convertible notes in the original principal
amount of approximately $5.0 million, which are convertible into 126,475 shares
of common stock in March 2000. These notes have been discounted at a rate of
10.7% and are recorded at a discounted value of $4.9 million at December 31,
1999. The beneficial conversion feature of approximately $482,000 related to
these convertible notes is being amortized over their one year life. As part of
the consideration for the acquisition of SysOpt.com, EarthWeb issued a
convertible promissory note in the original principal amount of $875,000, which
is convertible into approximately 19,200 shares of common stock in July 2000.

      Notes payable consist primarily of a fixed rate note payable which accrues
interest at an annual rate of 10% and requires quarterly payments of principal
and interest through January 2002.

----------------------------------
8. Commitments and Contingencies

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

LEASES

EarthWeb leases equipment and office space under non-cancelable operating leases
expiring at various dates through March 2009. Future minimum lease payments
under non-cancelable operating leases as of December 31, 1999 are as follows:

                                                                Operating Leases
--------------------------------------------------------------------------------

2000                                                                 $ 1,849,346
2001                                                                   1,638,628
2002                                                                   1,304,813
2003                                                                   1,165,217
2004 and thereafter                                                    5,092,070
--------------------------------------------------------------------------------
Total                                                                $11,050,074
================================================================================

      Rent expense was approximately $1,262,000, $323,000 and $278,000 for the
years ended December 31, 1999, 1998 and 1997, respectively.

LETTERS OF CREDIT

As of December 31, 1999, EarthWeb has $787,000 in standby letters of credit to
collateralize certain facility lease agreements. Restricted cash collateralizes
such standby letters of credit.

LITIGATION

EarthWeb is subject to legal proceedings and claims which arise in the ordinary
course of its business. EarthWeb does not believe that an adverse outcome of any
proceeding would have a material effect on EarthWeb's financial position or
results of operations.


                                       22
<PAGE>

-------------------------
9. Stockholders' Equity

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

COMMON STOCK

In June 1998, EarthWeb issued 433,965 shares of common Stock to EarthWeb LLC
through a private placement, in consideration of net proceeds of $3.7 million.
In November 1998, EarthWeb completed its initial public offering of 2,100,000
shares of common stock at a price of $14.00 a share. The total net proceeds to
EarthWeb from the initial public offering were approximately $25.8 million. On
May 7, 1999, EarthWeb completed a secondary public offering of 1,300,000 shares
of common Stock at an offering price of $37.00 per share, of which 750,000
shares were sold by EarthWeb and 550,000 shares were sold by selling
stockholders. Proceeds to EarthWeb, net of issuance costs, were approximately
$25.4 million.

STOCK OPTION PLAN

During October 1996, EarthWeb adopted the 1996 Amended and Restated Stock Option
Plan (the "1996 Plan") under which incentive stock options or non-qualified
stock options to purchase common stock may be granted to eligible employees.

      In November 1998, EarthWeb adopted the EarthWeb Inc. 1998 Stock Incentive
Plan (the "1998 Plan"). EarthWeb initially reserved 375,000 shares of common
Stock for issuance under the 1998 Plan and then reserved an additional 1,700,000
shares for issuance. Under the 1998 Plan, an annual increase is added on the
first day of the Company's fiscal year beginning in 2000 equal to two percent
(2%) of the number of shares outstanding as of such date or a lesser number of
shares determined by the Compensation Committee. A summary of the status of
EarthWeb's Stock Option Plans, as amended, as of December 31, 1997, 1998 and
1999, and changes during the three years ended December 31, 1999 are presented
below:

<TABLE>
<CAPTION>
                                                                                           Weighted Average
                                                                      Option Shares        Exercise Price
--------------------------------------------------------------------------------------------------------------
<S>                                                                <C>                     <C>
OPTIONS OUTSTANDING -- JANUARY 1, 1997
Opening balance                                                            --              $   --
Granted                                                               217,568                2.40
Cancelled                                                             (17,478)               1.54
--------------------------------------------------------------------------------------------------------------
OPTIONS OUTSTANDING -- DECEMBER 31, 1997                              200,090              $ 2.49
Granted                                                               363,925                5.14
Exercised                                                              (2,732)               1.54
Cancelled                                                             (58,120)               2.51
Expired                                                                (4,201)               1.64
--------------------------------------------------------------------------------------------------------------
OPTIONS OUTSTANDING -- DECEMBER 31, 1998                              498,962              $ 4.43
Granted                                                             1,837,776               28.73
Exercised                                                            (208,067)               4.72
Cancelled                                                            (287,738)              24.39
Expired                                                                (1,135)               7.30
--------------------------------------------------------------------------------------------------------------
OPTIONS OUTSTANDING -- DECEMBER 31, 1999                            1,839,798              $25.54
--------------------------------------------------------------------------------------------------------------
Options exercisable at December 31, 1999                              104,627
Options exercisable at December 31, 1998                              108,813
Options exercisable at December 31, 1997                                   --

Weighted average fair value of options granted during 1999         $    19.80
Weighted average fair value of options granted during 1998         $     0.97
Weighted average fair value of options granted during 1997         $     0.75
</TABLE>


                                       23
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      The following table summarizes information about stock options outstanding
at December 31, 1999:

<TABLE>
<CAPTION>

                                                  OPTIONS OUTSTANDING                               OPTIONS EXERCISABLE
-------------------------------------------------------------------------------------------------------------------------------
                                                         WEIGHTED             WEIGHTED                                 WEIGHTED
                                                          AVERAGE              AVERAGE                                  AVERAGE
RANGE OF                             SHARES             REMAINING             EXERCISE             SHARES              EXERCISE
EXERCISE PRICES                 OUTSTANDING      CONTRACTUAL LIFE                PRICE        EXERCISABLE                 PRICE
-------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                         <C>               <C>               <C>                    <C>
$ 1.54                                7,449                   4.1               $ 1.54              1,659                $ 1.54
$ 2.77 - $ 3.23                     186,542                   5.1               $ 3.08             58,260                $ 3.06
$ 8.57 - $11.54                      21,329                   5.5               $10.94              6,920                $10.81
$13.00 - $13.70                      23,311                   7.3               $13.31              8,955                $13.45
$26.19 - $36.13                   1,565,167                   9.5               $28.04             28,833                $29.00
$54.81                               36,000                   9.3               $54.81                 --                $   --
-------------------------------------------------------------------------------------------------------------------------------
$ 1.54 - $54.81                   1,839,798                   8.9               $25.54            104,627                $11.59
</TABLE>

      Options generally vest over a period of four years; however, 15% of all
unvested options automatically vested at the date of the initial public
offering. At December 31, 1999, EarthWeb had reserved 2,289,317 shares of common
stock for the exercise of options.

      The 1998 Plan also provides for the issuance of stock appreciation rights
and restricted stock awards under which shares of common stock may be issued to
eligible employees. No such awards have been made.

1998 EMPLOYEE STOCK PURCHASE PLAN

EarthWeb's 1998 Employee Stock Purchase Plan (the "Stock Purchase Plan") was
approved by the Board of Directors in November 1998. The Stock Purchase Plan is
intended to qualify as an "employee stock purchase plan" under Section 423 of
the Code in order to provide employees of EarthWeb with an opportunity to
purchase common Stock through payroll deductions. At December 31, 1999, an
aggregate of 159,000 shares of EarthWeb's common Stock had been reserved for
issuance under the Stock Purchase Plan. Under the Stock Purchase Plan an annual
increase is added on the first day of the Company's fiscal year beginning in
2000 equal to the lesser of (i) 400,000 shares, (ii) two percent (2%) of the
number of shares as of such date or (iii) a lesser number of shares determined
by the Compensation Committee. For the year ended December 31, 1999, employees
purchased 34,217 shares of common stock at a weighted average price of $12.83
per share under the Stock Purchase Plan.

STOCK-BASED COMPENSATION

EarthWeb applies Accounting Principles Board Opinion No. 25, "Accounting for
Stock-Issued to Employees" and related interpretations in accounting for its
stock option issuances. EarthWeb has adopted the disclosure-only provisions of
SFAS No. 123, "Accounting for Stock-Based Compensation ("SFAS No. 123")." If
compensation cost for EarthWeb's stock option issuances in 1999, 1998, and 1997
had been recognized based on the fair value method under the provisions of SFAS
No. 123, EarthWeb's net loss would have been adjusted to the pro forma amounts
indicated below:

<TABLE>
<CAPTION>

December 31,                                                      1999               1998                 1997
----------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                 <C>                  <C>
Net loss - as reported                                    $(34,713,120)       $(8,969,788)         $(7,820,537)
Net loss - pro forma                                      $(40,078,626)       $(9,022,961)         $(7,860,720)
Basic net loss per share - as reported                    $      (3.78)       $     (2.37)         $     (2.67)
Basic net loss per share - pro forma                      $      (4.37)       $     (2.39)         $     (2.69)
----------------------------------------------------------------------------------------------------------------
</TABLE>

      The fair value of each option grant is estimated on the date of the grant
using the "Black-Scholes option-pricing model" with the following weighted
average assumptions used for grants for the years ended December 31, 1999, 1998,
and 1997; zero dividend yield for all years; 88% expected volatility for options
granted in 1999 and 0% volatility for options granted in 1998 and 1997 (all
options granted in 1998 and 1997 were issued prior to the effectiveness of the
IPO); a weighted average risk-free interest rate of 5.53%, 5.34% and 6.90%,
respectively; and expected lives of 4 years for options granted in 1999 and 1998
and 5 years for options granted in 1997.

      In connection with the acquisition of MicroHouse International, Inc. in
March 1999, EarthWeb issued stock options with strike prices below the then fair
market value and, as a result, recorded deferred compensation of approximately
$1,060,000. Deferred compensation is amortized over the two-year vesting period
of the options. For the year ended December 31, 1999, EarthWeb recognized
compensation cost, net of reversals due to forfeitures, of approximately
$766,000.


                                       24
<PAGE>

------------------
10. Income Taxes

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

The components of the net deferred tax asset as of December 31, 1999 and 1998
consists of the following:

<TABLE>
<CAPTION>
                                                                                1999                1998
--------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                  <C>
Operating loss carryforward                                             $ 16,298,663         $ 7,328,880
Depreciation of fixed assets and amortization of intangibles                (341,705)             13,856
--------------------------------------------------------------------------------------------------------
Net deferred tax asset                                                    15,956,958           7,342,736
Less, Valuation allowance                                                (15,956,958)         (7,342,736)
--------------------------------------------------------------------------------------------------------
Deferred tax asset                                                      $         --         $        --
--------------------------------------------------------------------------------------------------------
</TABLE>

      The difference between EarthWeb's U.S. federal statutory rate of 35%, as
well as its state and local rate, net of a federal benefit of 7%, when compared
to its effective rate of 0% is principally comprised of its valuation allowance.

      As of December 31, 1999, EarthWeb has a net operating loss carryforward
for Federal income tax purposes of approximately $40.2 million. The net
operating loss carryforwards will begin to expire in 2011 if they have not been
used. The net deferred tax asset has been fully reserved due to the uncertainty
of EarthWeb's ability to realize this asset in the future.

----------------
11. Employee
Savings Plans

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

EarthWeb has three savings plans (the "Savings Plans") that qualify as deferred
salary arrangements under Section 401(k) of the Internal Revenue Code. During
1999, EarthWeb acquired two Employee Savings Plans through the acquisitions of
D&L Online, Inc. and MicroHouse International, Inc. Under the Savings Plans,
participating employees may defer a portion of their pretax earnings, up to the
Internal Revenue Service annual contribution limit. For the year ended December
31, 1999 EarthWeb contributed approximately $47,000 to the Savings Plans. For
the years ended December 31, 1998 and 1997, EarthWeb did not contribute to its
Savings Plan.

------------------------------------
12. Subsequent Events (unaudited)

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

In January 2000, EarthWeb completed a private offering pursuant to Rule 144A of
$80.0 million of convertible subordinated notes due January 25, 2005 (the
"Notes"). Proceeds to EarthWeb, net of issuance costs, were approximately $77.0
million. The Notes are convertible, at the option of the holder, at any time on
or prior to maturity into shares of EarthWeb common stock. The Notes are
convertible at a conversion price of $39.10 per share, which is equal to a
conversion rate of 25.5754 shares per $1,000 principal amount of notes, subject
to adjustment. Interest on the Notes is payable semiannually on January 25 and
July 25 of each year, beginning July 25, 2000. EarthWeb may redeem some or all
of the Notes at any time before January 25, 2003 at the redemption prices set
forth in the Notes, if the closing price to EarthWeb common stock has exceeded
150% of the conversion price then in effect for at least 20 trading days within
a period of 30 consecutive trading days ending on the trading day before the
date of mailing of the provisional redemption notice. EarthWeb will make an
additional payment in cash with respect to the notes called for provisional
redemption in an amount set forth in the Notes. EarthWeb may redeem some or all
of the Notes at any time after January 25, 2003 at redemption prices set forth
in the Notes.

      In February 2000, EarthWeb acquired all of the capital stock of Measure
Up, Inc. ("Measure Up"), a leader in online certification and preparation and
assessment solutions for the IT industry. The consideration paid by EarthWeb to
acquire Measure Up consisted of (a) $10 million in cash, which was paid at
closing, (b) $5.0 million in cash and common stock payable in two installments
in May and August of 2000, and (c) additional future "earnout" payments based on
performance of the business in the form of cash, common stock or both with an
aggregate value of up to $10 million, payable over a period of three years.
Under the terms of the Agreements and a related escrow agreement, 134,127 shares
of common stock (subject to future adjustments) have been placed in escrow to
secure future payments and an additional 58,207 shares of common stock (also
subject to future adjustments) have been placed in escrow to secure potential
earnout obligations.

      In February 2000, EarthWeb acquired Cambridge Information Network ("CIN"),
a leading web site for IT executives. The consideration totalled approximately
$8 million, payable in a combination of cash and common stock in four
installments through September 2000.

      In February 2000 and March 2000, EarthWeb also acquired the Web sites
CCPrep and NetCerts, respectively, both of which offer online certification
preparation products and services designed for IT professionals seeking Cisco
certification. The aggregate purchase price of both acquisitions was $3,370,000.

      These acquisitions will be accounted for using the purchase method of
accounting. The results of operations for each will be included with those of
EarthWeb for periods subsequent to the date of each acquisition.


                                       25
<PAGE>

REPORT OF INDEPENDENT AUDITORS EARTHWEB INC.

---------------------------------------------------------------
To the Board of Directors and Shareholders of EarthWeb Inc.:

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

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, stockholders' equity and cash flows
present fairly, in all material respects, the financial position of EarthWeb
Inc. and it's consolidated subsidiaries (the "Company") at December 31, 1998 and
1999, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1999 in conformity with accounting
principles generally accepted in the United States of America. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of those statements in accordance with
auditing standards generally accepted in the United States of America, which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.


/s/PricewaterhouseCoopers LLP

New York, New York
February 1, 2000


                                       26
<PAGE>

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) EARTHWEB INC.

The following table sets forth unaudited quarterly statement of operations data
for each of the four quarters during the years ended December 31, 1999 and 1998.
In the opinion of management, this information has been prepared substantially
on the same basis as the audited financial statements appearing elsewhere in
this Annual Report, and all necessary adjustments, consisting only of normal
recurring adjustments, have been included in the amounts stated below to present
fairly the unaudited quarterly results. The quarterly data should be read in
conjunction with the audited financial statements of EarthWeb and the notes
thereto appearing elsewhere in this Annual Report. The operating results for any
quarter are not necessarily indicative of the operating results for any future
period.

<TABLE>
<CAPTION>

                          March 31,     June 30,    Sept. 30,    Dec. 31,      March 31,      June 30,       Sept. 30,      Dec. 31,
QUARTER ENDED                 1998         1998         1998        1998           1999          1999            1999          1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>          <C>          <C>           <C>          <C>            <C>             <C>          <C>
DOLLARS IN THOUSANDS
Total revenues             $   308      $   666      $   944       $ 1,431      $ 3,732        $ 7,199         $8,653       $11,466
Cost of revenues               395          398          601           737        1,479          2,587          3,078         3,824
-----------------------------------------------------------------------------------------------------------------------------------
Gross profit (loss)            (87)         268          343           694        2,253          4,612          5,575         7,642
-----------------------------------------------------------------------------------------------------------------------------------
Operating expenses:
Product development            246          310          434           485          736            879          1,386         1,113
Sales and marketing            333          477        1,082         2,655        5,188          6,724          7,019         8,784
General and
    administrative             605          726          914         1,111        1,597          3,031          2,403         2,844
Depreciation                   163          174          170           192          247            365            453           612
Amortization                    70           70          141           136        1,531          2,948          3,523         4,216
-----------------------------------------------------------------------------------------------------------------------------------
Total operating expenses     1,417        1,757        2,741         4,579        9,299         13,947         14,784        17,569
-----------------------------------------------------------------------------------------------------------------------------------
Loss from operations        (1,504)      (1,489)      (2,398)       (3,885)      (7,046)        (9,335)        (9,209)       (9,927)
Interest and other
    income, net                 47           30           42           187          234            159            258           153
-----------------------------------------------------------------------------------------------------------------------------------
Net loss                  $(1,457)     $(1,459)     $(2,356)      $(3,698)     $(6,812)       $(9,176)       $(8,951)       $(9,774)
====================================================================================================================================
Basic and diluted
    net loss per share    $ (0.50)     $ (0.50)     $ (0.70)      $ (0.62)     $ (0.82)       $ (1.02)       $ (0.93)       $ (1.00)
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       27
<PAGE>

CORPORATE INFORMATION EARTHWEB INC.

---------------------
Board of Directors

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

JACK D. HIDARY(1)
President and Chief Executive Officer

MURRAY HIDARY
Executive Vice President,
Business Development, and Treasurer

CARY DAVIS(1)(2)
Vice President,
E. M. Warburg, Pincus & Co., LLC

HENRY KRESSEL(1)(2)
Managing Director,
E. M. Warburg, Pincus & Co., LLC

PETER DEROW
Former President, Institutional Investor, Inc.,
Newsweek, Inc. and CBS Publishing

---------------------
Executive Officers

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

JACK D. HIDARY
President, Chief Executive Officer
and Director

MURRAY HIDARY
Executive Vice President,
Business Development, Treasurer and Director

WILLIAM GOLLAN
Senior Vice President

IRENE MATH
Senior Vice President, Finance

BRIAN CAMPBELL
Vice President, General Counsel and Secretary

NORMAN E. LORENTZ
Chief Technology Officer

SCOTT ANDERSON
Vice President, Worldwide Marketing

------------------
Corporate Office

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

EARTHWEB INC.
3 Park Avenue
New York, New York 10016

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP
New York, New York

LEGAL COUNSEL

Morrison & Foerster LLP
New York, New York

TRANSFER AGENT AND REGISTRAR

American Stock Transfer & Trust Company

FORM 10-K

Copies of the EarthWeb Inc. Form 10-K as filed with the Securities and Exchange
Commission are available without charge at www.sec.gov. A copy of this annual
report can be found online at: www.ewbx.com or via a written, verbal or
electronic request to EarthWeb's corporate office.

SHAREHOLDER INFORMATION

EarthWeb Inc. Common Stock is quoted on the NASDAQ National Market under the
symbol EWBX. During the fourth quarter of 1999, the high and low closing prices
per share of common stock, as reported by NASDAQ, were $51.88 and $30.25,
respectively.

EarthWeb has not paid cash dividends on its common stock and does not anticipate
paying any cash dividends in the foreseeable future. EarthWeb presently intends
to retain its future earnings to finance the expansion and development of the
business.

As of March 1, 2000, 10,096,029 shares of EarthWeb Inc. common stock were issued
and outstanding and were held of record by 126 persons, including several
holders who are nominees for an undetermined number of beneficial owners.

All references to Web sites are not intended to incorporate information
contained therein.

(1) Member of Compensation Committee
(2) Member of Audit Committee


                                       28
<PAGE>

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

                                      EWBX
                    FOR MORE INFORMATION, VISIT WWW.EWBX.COM.

(C)2000 EarthWeb Inc. All rights reserved. EarthWeb and the
EarthWeb logo are registered trademarks of EarthWeb Inc.
All other trademarks are the property of their respective owners.
Sources: IDC market studios and other industry data.

Design: SVP Partners, Wilton, CT, Portrait Photography: Ted Kawalerski, NYC
<PAGE>

                                    [GRAPHIC]
                                    EARTHWEB

                                 EARTHWEB INC.
                       3 PARK AVENUE, NEW YORK, NY 10016
                        T: 212.725.6550 F: 212.725.6559
                                WWW.EARTHWEB.COM

            WITH  HEADQUARTERS IN NEW YORK CITY, EARTHWEB HAS OFFICES IN SAN
                  FRANCISCO, DES MOINES, BOULDER, BOSTON AND ATLANTA