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

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**FORM 10-K**

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(MARK ONE)

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

**For the fiscal year ended December 31, 2000**

**OR**

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

**FOR THE TRANSITION PERIOD FROM ___________ TO  _____________**

**Commission file number 000-25113**

**MarketWatch.com, Inc.**
(Exact name of Registrant as Specified in its Charter)



|**Delaware**                                                   | **94-3315360**                         
|-------------------------------------------------------------- | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)

**825 Battery StreetSan Francisco, California     94111**(Address of Principal Executive Offices including Zip Code)

**(415) 733-0500**(Registrant's Telephone Number, Including Area Code)

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

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

**Common Stock, $.01 Par Value**(Title of Class)

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

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

As of March 20, 2001, the aggregate market value of voting stock held by
non-affiliates of the Registrant was $21,229,133.

The number of shares of the Registrant's Common Stock outstanding as of
March 20, 2001 was 16,598,839.

DOCUMENTS INCORPORATED BY REFERENCE

Documents incorporated by reference: portions of the registrant's proxy
statements for its 2001 annual meeting of stockholders are incorporated by
reference.







**MARKETWATCH.COM, INC.
                        2000 ANNUAL REPORT ON FORM 10-K
                               TABLE OF CONTENTS**



|Part I.    |                                                                                       | Page
|---------- | ------------------------------------------------------------------------------------- | ----
|Item 1.    | Business                                                                              | 3   
|Item 2.    | Properties                                                                            | 27  
|Item 3.    | Legal Proceedings                                                                     | 27  
|Item 4.    | Submission of Matters to a Vote of Security Holders                                   | 27  
|Part II.   |                                                                                       |     
|Item 5.    | Market for the Registrant's Common Equity and Related Stockholder Matters             | 30  
|Item 6.    | Selected Consolidated Financial Data                                                  | 31  
|Item 7.    | Management's Discussion and Analysis of Financial Condition and Results of Operations | 32  
|Item 7a.   | Quantitative and Qualitative Disclosures About Market Risks                           | 40  
|Item 8.    | Consolidated Financial Statements and Supplementary Data                              | 40  
|Item 9.    | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  | 61  
|Part III.  |                                                                                       |     
|Item 10.   | Directors and Executive Officers of the Registrant                                    | 61  
|Item 11.   | Executive Compensation                                                                | 61  
|Item 12.   | Security Ownership of Certain Beneficial Owners and Management                        | 62  
|Item 13.   | Certain Relationships and Related Transactions                                        | 62  
|Part IV.   |                                                                                       |     
|Item 14.   | Exhibits, Consolidated Financial Statement Schedules and Reports on Form 8-K          | 62  
|Signatures |                                                                                       | 63  

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PART I

Except for historical information, this Annual Report
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These forward-looking statements include statements containing the words
"expect," "anticipate," "intend," "believe" and similar language, and statements
regarding our anticipated costs. The outcome of the events described in these
forward-looking statements is subject to risks, and our actual results could
differ materially. The forward looking statements in the sections "Business -
Factors that May Affect Operating Results" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," as well as those
included elsewhere in this Annual Report on Form 10-K contain a discussion of
some of the factors that could contribute to these differences. Ownership of our
securities by CBS Broadcasting Inc. or Pearson Overseas Holding Ltd. should not
be viewed as a recommendation by either company to acquire or hold our common
stock.

Item 1. Business

Overview

We are a leading Web-based provider of comprehensive, real-time business
news, financial programming and analytic tools through our web sites
CBS.MartketWatch.com and BigCharts.com. We carefully design and regularly update
our Web sites to provide well-organized and relevant financial content. We have
important strategic relationships with our principal stockholders, CBS
Broadcasting Inc., or CBS, and Pearson Overseas Holding Ltd., or Pearson.

Our goal is to create the preeminent brand for real-time business news and
financial information on the Web. We believe our consistent focus on original
and authoritative content and our access to a national media audience through
our relationship with CBS will help us achieve this goal. In the fourth quarter
of 2000, our Web sites attracted an average of approximately 8.4 million unique
visitors per month, who generated approximately 831 million page views. In the
fourth quarter of 1999, our web sites attracted an average of approximately 6.9
million unique visitors per month, who generated approximately 525 million page
views. Our visitor information is based on information provided to us by
DoubleClick, Inc., the company that delivers ads on our Web sites and measures
and tracks our users.

MarketWatch.com Web Properties

Our Web properties provide comprehensive business and financial news,
financial programming and analytic tools, including historic charting
capabilities from our BigCharts.com Web Site, which we acquired in June 1999.
Our staff of approximately 100 professional journalists, including freelance
journalists, offers real-time coverage of business and financial news and in-depth
commentary on market-moving trends and events, all provided to our users
free of charge. Our CBS.MarketWatch.com Web site also offers personal finance
commentary and data, community features and other services designed to provide a
"one-stop-shop" for our audience's financial information needs.

In February 2001, we launched a new version of our CBS.MarketWatch.com Web
Site. The updated site includes improved navigation and additional financial
news and tools and data for investment tracking. We believe that offering
comprehensive business news, financial programming and analytic tools is
critical to our success as it enables us to increase audience loyalty and sense
of community, average usage time and repeat visits.

News and Editorial Content

The CBS.MarketWatch.com front page is carefully designed and frequently
updated throughout the trading day by our journalists and editors in San
Francisco, New York, Washington D.C., London and Tokyo to inform our audience of
the latest news as it breaks. Unlike many of our Web-based competitors, we do
not rely exclusively on automatic editing and display systems; we instead
leverage our journalistic expertise to add a strong editorial framework to our
content. From the CBS.MarketWatch.com Web site's front page, users can access
news stories, columns and headlines written by our reporters and by third
parties, such as Reuters, Associated Press, Financial Times and PR Newswire, as
well as stock quotes and other business and financial data and analytic tools.
We also have devoted staff to cover special areas of interest, including initial
public offerings, investment conferences, the fixed income markets, mutual
funds, mortgages, micro-cap stocks, futures and options and technology stocks.

We work with CBS News' global operations and presence to expand our coverage
of international business and financial news. In addition to providing news
coverage for the CBS.MarketWatch.com Web site, our journalists provide financial
news to CBS News and CBS Radio News programming. We believe that providing news
reports for CBS and working with CBS News journalists will create an opportunity
to enhance our reputation and audience reach.

Our staff of approximately 100 professional journalists, including freelance
journalists who write for us, are experienced editors, bureau chiefs and
reporters with high standards for reporting and editing. We believe our staff
provides us with a significant competitive advantage. For example, Larry Kramer,
our Chief Executive Officer, was Executive Editor of the San Francisco Examiner
and a financial reporter and Metro Editor of The Washington Post. Our staff also
includes Thom Calandra, who has been a financial columnist for the San Francisco
Examiner, the London-based, lead markets editor for Bloomberg News and Online
Money Editor for USA Today Online; Paul Erdman, a renowned economist and author;
and Irwin Kellner, a former Chief Economist for Manufacturers Hanover Trust
Bank; as well as a number of other journalists who previously worked for
Bloomberg News, Associated Press, UPI, CBS Radio news, Fox News Internet and Dow
Jones Television. We believe that we are one of the few Web-based companies that
offer this level of journalism.

We create and publish on the CBS.MarketWatch.com Web site real-time
commentary and analysis of business and financial news and a number of regular
columns by our experienced editorial staff. News features include real-time
headlines, stock market news and updates and coverage of technology stocks, bond
markets, initial public offerings and other areas of interest to our
audience.

The CBS.MarketWatch.com Web site also offers selected audio and video clips
of news reports recently broadcast on our CBS MarketWatch Weekend television
show, the CBS Television Network, CBS Radio Network and our MarketWatch Radio
Network. Users can also search a historical database of news stories by company
name and ticker symbol.

Some of the features of the Web Sites include:

- Front Page.
- Market Data.
- Commentary.
- Mutual Fund Center.

To broaden its audience appeal, the CBS.MarketWatch.com Web site has other
specialized content areas targeting novice, as well as sophisticated investors,
including:

- Personal Finance.
- Tax Guide.
- Third-Party Products.
- Marketplace.

Data and Analytic Tools

We offer a variety of data and analytic tools which, together with our
other real-time news and programming, are designed to provide a "one-stop-shop"
for the financial and business needs of our audience. These include the
following:

- Securities Price Quotes.
- Historical Charts.
- Portfolios.

- Track up to 200 ticker symbols in multiple portfolios;

- Access portfolios from any computer with internet access;

- Track options, mutual funds and stocks on all major U.S. and select
international exchanges;

- Automatically update portfolio price views every five minutes;

- Monitor short and long positions;

- View transaction history and capital gains reports and;

- Download portfolio reports for use in spreadsheets, providing a wider set
of choices for record keeping.

- Data.

Community Features

We believe that providing a place for our audience, financial journalists
and experts in the financial world to meet and share ideas about investing will
help increase brand awareness, motivate users to return to the
CBS.MarketWatch.com Web site frequently and encourage our audience to spend more
time on our Web site. Additionally, because we have integrated and will continue
to build links to related news, market data and charts offered throughout our
service, community members will be able to gravitate towards others who share
their specific interests, enabling them to create niche user groups which can be
targeted with relevant marketing campaigns and transaction opportunities. In
addition, because we integrate other content, such as personal finance and
broadband features, community members will be exposed to other areas of the
site, increasing the awareness of the breadth of our programming and other
services. We believe that the personal and interactive nature of communicating
with others who share similar interests will help generate an affinity for the
community and increase our brand loyalty.

Our array of communication tools provides our audience with the means for
communicating in affinity group message boards. To participate and assist us in
targeting advertising, users must complete a registration form and provide
demographic information about themselves.

Our community-building efforts are centered on strengthening audience
loyalty, increasing page views across all areas of our site, and providing
opportunities for premium sponsorships, such as sponsoring moderated chat
events.

Financial Times MarketWatch.com Joint Venture

To increase our international reach, in January 2000, we signed a joint
venture agreement with The Financial Times Group, a European provider of
business news and analysis, which is part of Pearson plc, the parent company of
Pearson Overseas Holding, Ltd., one of our principal stockholders. Our joint
venture Web site, FTMarketWatch.com, which launched in the second quarter of
2000, provides free, real-time financial and market news to Europe's rapidly
growing communities of individual investors. The site aims to capture the
expanding market of European individual investors who make their investment
decisions online or look to the Internet for quick, market-oriented news. The
tone and content of the site have a strong focus on European companies in the
telecommunications, Internet, media and electronic commerce sectors, as well as
the United Kingdom mutual funds market. The site was launched initially in
English and is currently available in German as well.

Under the terms of our joint venture agreement, The Financial Times Group
advertises and markets the site through its European network of business
newspapers and Web sites and we supply the technology and infrastructure for the
site. The site has its own dedicated team of journalists and extensive links to
related stories and content on CBS.MarketWatch.com and FT.com, a financial Web
site of The Financial Times Group.

Advertising Sales

We are focused on providing our advertisers with a large, demographically
desirable audience. We believe that our Web sites attract users who as a group
are more affluent and better educated than users of many other Web sites and
therefore represent an attractive medium for companies that advertise and engage
in commerce over the Internet. Advertisements are displayed throughout our Web
sites, including when a user enters the service, reviews a news story or
accesses a quote, portfolio or chart. Advertising revenues represented 65%, 72%
and 73% of our net revenues for the years ended December 31, 2000, 1999 and
1998, respectively.

We currently derive, and expect to continue to derive revenue from
advertising sales. Our sales force seeks to provide advertisers unique
advertising positions and creative advertising solutions. We offer a variety of
advertising options that may be purchased individually or in packages such as
run of site, run of network, targeted advertising and sponsorships. Our
portfolio of Web properties offers advertisers a strong, consistent brand with
the opportunity to target their campaigns on the site of their choice or run a
campaign across our network of Web sites. A selection of advertising options we
currently offer are:

- Run of Site or Run of Network.
- Targeted Advertising.
- Sponsorships.
- Content Sidebars.
- Animated Headers.

Our direct sales force consists of more than 30 specialists. We depend on our
sales force to sell advertising on our Web sites. This involves a number of
risks including:

- Our sales personnel have, in a number of cases, only worked for us for a
short period of time;
- Our ability to hire, retain, integrate and motivate sales and sales support
personnel;
- The length of time it takes new sales personnel to become productive; and
- The competition we face from other companies in hiring and retaining sales
personnel.

Our business will be adversely affected if we do not develop and maintain an
effective sales force. We believe that having an internal direct sales force
allows us to better understand and meet advertisers' needs, increase our access
to potential advertisers and maintain strong relationships with our existing
advertising clients. Our in-house sales staff includes experienced Internet
sales personnel as well as those from traditional media. Our staff develops and
implements our advertising strategies by creating value-added packages for
advertisers from the wide range of news columns, editorial opinions and other
tools and information on our Web sites, including identifying strategic accounts
and developing presentations and promotional materials and building
relationships with advertising buyers. DoubleClick provides advertising
management and delivery services for our Web sites and provides advertisers with
reports describing the delivery of their advertisements.

During 2000, we increased the number of advertisers from industries other
than financial services. This diversity has increased our client base and our
advertising revenue. If we do not continue to attract advertisers from other
industries, our business could be adversely affected.

Our advertising packages are sold in campaigns ranging from less than two
weeks to a year or more. Advertisers have the right to cancel a campaign with
two weeks notice without penalty. Therefore, advertising revenue would be
adversely affected if we fail to maintain a desirable medium for on-line
advertising.

Licensing Sales

Our licensing business focuses on business-to-business relationships with
partners of all sizes to generate fee revenue, as well as distribution and
branding opportunities. We license interactive stock charting and research
tools, along with news and editorial content from the MarketWatch.com newsroom
and third party news providers. Our clients include a wide variety of Internet
website operators, with a particular focus on companies in the banking,
brokerage, publishing and financial services industries. For the years ended
December 31, 2000, 1999 and 1998, licensing revenue accounted for 29%, 21%, and
18%, respectively, of total revenue.

Our licensing sales and development group works to provide customized
solutions for businesses that want to seamlessly integrate financial charting,
analytic tools and content into their Web site. Our clients may choose to
purchase individual products or to work with our designers and developers to
create web content that incorporates multiple products throughout their site. We
believe our investment in creating broad content relationships with industry-
leading financial organizations, such as The Wall Street Journal Interactive,
E*Trade, Fidelity, Ameritrade, Datek, Merrill Lynch Online, The Street.com and
Charles Schwab, provides us with a unique opportunity to leverage our financial
content and technical infrastructure to deliver multiple revenue streams. Our
content is generally identified as our own on all of our licensing partners' Web
sites.

In September 2000, we made our print debut as the primary financial news
provider for the Daily News Express, an evening commuter publication of the New
York Daily News. We more than doubled the audience for our print content in
November 2000 by becoming the primary financial news provider for the new San
Francisco Examiner.

We intend to pursue licensing revenue from new and existing clients as we
seek to grow these revenues in absolute dollars. However, as our largest clients
generate a significant percentage of our licensing revenue, our revenue will
decrease if they choose not to continue to license our services.

Broadcast

To increase our brand awareness and audience reach we began producing a
nationally distributed television program, CBS MarketWatch Weekend, in
September 1999. The half-hour show was airing weekly on 131 stations as of
December 31, 2000. The show's content is determined by the top stories of the
week. Segments produced for CBS MarketWatch Weekend are included on our Web site
to attract broadband viewers and also appear on AOL Plus and Yahoo Finance
Vision.

Other television reporting includes contributions to CBS The Early Show,
CBS Saturday Early Show, CBS Evening News and CBS Newspath, which
supplies CBS News video to over 200 CBS-affiliated television stations for use
in their news programs. We do not receive any payments from CBS for this
reporting. However, all reports delivered by our correspondents are identified
as our reports. Our correspondents file these reports or provide services to CBS
which we believe helps to strengthen our brand awareness. We do not have a
formal agreement with CBS with respect to all of our correspondents who provide
reports to CBS or its affiliates. Therefore, there can be no assurance that
these services will continue in the future.

We also produce radio reports from our Washington, D.C. bureau for
distribution to154 stations as of December 31, 2000 by the Westwood One Radio
Network. Our contract with Westwood One provides us revenue based on a pre-determined
revenue share schedule and requires contribution of content by us and
distribution and marketing services by Westwood One. We intend to continue to
expand our television and radio distribution and leverage content created for
these media to add broadband features to our destination sites.

Strategic Relationships

We believe that our strategic relationships with our principal
stockholders, CBS and Pearson, allow us to differentiate the CBS.MarketWatch.com
Web site as the preeminent brand for real-time business news and financial
programming on the Web.

CBS

CBS Name and Logo. In connection with our formation in 1997, we entered
into a license agreement, which was subsequently amended and restated, under
which our Web site was renamed "CBS.MarketWatch.com" and we were granted the
right to use the CBS name and logo, as well as CBS Television Network news
content in connection with the CBS.MarketWatch.com Web site during this period.
This agreement will expire on October 29, 2005. Under the terms of the amended
and restated license agreement, we pay CBS a percentage of gross revenues
generated by the CBS.MarketWatch.com Web site. The agreement is subject to
termination if competitors of CBS acquire specified amounts of our common stock
or in other specific circumstances.

Advertising. Under the terms of the contribution agreement as amended
by the stockholders agreement, CBS has agreed,subject to certain
limitations, to provide us an aggregate rate card amount of $30.0 million in
rate card advertising and on air promotions during the period from October 29,
1997 through October 29, 2002. The $30.0 million contribution was delivered in
full by June 30, 2000. Under the terms of the stock purchase agreement that was
entered into with CBS in March 2000, CBS agreed to provide an additional $30.0
million in advertising during the period from March 1, 2000 through May 5, 2002.
The timing and placement of these advertisements and promotions are subject to
CBS's discretion. CBS could discontinue promoting us in the manner that it
currently does. CBS also makes no guarantees to us as to the demographic
composition or size of the audience that views these advertisements or
promotions. This advertising and on-air promotion, as well as our association
with the CBS brand, are important elements of our strategy to increase our brand
awareness. This obligation will terminate if our license agreement terminates.
As of December 31, 2000, CBS had delivered $38.5 million rate card amount of
promotion and advertising under these commitments.

Reporting. We believe we have increased and will continue to expand
our brand awareness by providing financial news reports for CBS News and CBS
Radio. Our New York City-based bureau is located in CBS facilities and
frequently works with CBS News staff to generate stories for distribution over
the CBS broadcast network. We file three market reports each day on CBS
Newspath, which supplies CBS News video to over 200 CBS affiliated television
stations for use in their news programs. Our correspondents also file customized
daily reports to major CBS affiliates via satellite links, produce weekly
reports for the CBS Saturday morning television show, produce periodic weekly
reports for the CBS Evening News and contribute a daily report to The
Early Show on the CBS network. We do not receive any payments from CBS for
this reporting. However, all reports delivered by our correspondents are
identified as MarketWatch.com reports to strengthen our brand awareness. We have
no formal agreement with CBS with respect to any of our correspondents who
provide reports to CBS or any of its affiliates. Therefore, we cannot be assured
that these services will continue in the future.

Non-Competition Provisions. The amended and restated license agreement
contains certain limited non-competition provisions. However, these provisions
have certain exceptions and do not otherwise provide for an exclusive
relationship. As a result, there can be no assurance that CBS will not promote,
establish or otherwise provide content for a Web site or Internet service that
competes with MarketWatch.com.

We would need to change the name of our Web site and devote substantial
resources towards building a new brand name if our agreement with CBS was
terminated or not renewed. This agreement also has a number of risks associated
with it. CBS can require us to remove any content on our Web site that it
determines conflicts, interferes with or is detrimental to its reputation or
business or for certain other reasons. We are also required to conform to CBS's
guidelines for the use of its trademarks. CBS has the right to approve all
materials, such as marketing materials, that include any CBS trademarks. CBS
also has control over the visual and editorial presentation of its television
news content on our Web sites. Because of these restrictions, we may not be able
to perform our desired marketing activities.

Our license agreement with CBS will expire on October 29, 2005, and CBS has
no obligation to renew it. CBS will also has the right to terminate this
agreement if:

- We breach a material term or condition of the agreement;
- We become insolvent or subject to bankruptcy or similar proceedings;
- A competitor of CBS acquires voting power of 15% or more of our outstanding
shares;
- We issue voting securities to, or actively participate in the acquisition of
our voting power by, a CBS competitor which results in such competitor directly
or indirectly owning 9% or more of our voting power; or
- We discontinue using the MarketWatch trademark and do not establish a
substitute mark acceptable to CBS.

If our agreement with CBS is terminated prior to the end of its term, our
business could be adversely affected. We may not be able to continue to attract
a sufficient amount of user traffic and advertisers to our Web sites without the
CBS name and logo or promotion from CBS.

Pearson/DBC

Initial Contribution by DBC. At our formation, Data Broadcasting
Corporation, or DBC, contributed certain assets related to its DBC Online/News
Business that had been operating as departments within DBC since October 1995.
In addition, DBC assigned to us agreements for advertising and content, portions
of its award-winning Web site, dbc.com, and its related trademarks, including
"MarketWatch" and the MarketWatch.com Internet domain name. DBC is now a
majority-owned subsidiary of Pearson DBC Holdings Inc., an affiliate
of Pearson Overseas Holdings, Ltd., one of our principal stockholders.

Data and Hosting. Pearson currently provides delayed financial data to
us at no charge. It also provides real-time financial data to us for
dissemination to subscribers of certain of MarketWatch.com subscription services
in exchange for a percentage of the subscription fee.

Payments for News. Under an amended and restated services agreement,
Pearson also pays us through October 2002 a monthly per-subscriber fee for
delivery of our news to all DBC subscribers, other than certain commercial
subscribers, with a minimum payment of $100,000 per month.

Non-Competition Provisions. Through October 29, 2005, Pearson has
agreed that it will not:

- Sell advertising on a Web site that primarily delivers financial news and
comprehensive stock quotes; or
- Use the Internet to sell, or authorize another to sell, real-time snap
quotes to individual subscribers.

Although the stockholders' agreement among us, CBS and Pearson contains
certain non-competition provisions, these provisions have certain exceptions and
do not provide for an exclusive relationship.

If Pearson fails to provide delayed financial data satisfactorily, we would
be required to perform these services ourselves or obtain these services from
another provider. Replacing these services could cause us to incur additional
costs. We may not be able to replace these services on commercially reasonable
terms or, if we choose to perform these services ourselves, we may not be able
to perform them adequately. During any such transition, our services could be
disrupted for an indefinite period of time and, as a result, we could lose a
substantial number of users and advertisers.



Control by CBS and Pearson

Current Ownership

Following our initial public offering in January 1999, CBS and DBC each
owned approximately 38% of our outstanding common stock. In March 2000, CBS and
DBC each purchased additional shares of our common stock and each then held
approximately 32% of our outstanding common stock. In February 2000, DBC
completed a merger with an affiliate of Pearson plc. Upon the closing of the
merger, the affiliate of Pearson acquired approximately 60% of the outstanding
common stock of DBC. In January 2001, DBC sold its shares of our common stock to
Pearson Overseas Holdings Ltd., an affiliate of Pearson plc. As of March 1,
2001, CBS and Pearson each owned approximately 34% of our outstanding common
stock.

Corporate Governance

CBS and Pearson each have certain rights to nominate representatives on
our board of directors generally based upon the percentage of our voting
securities that they hold. Currently, CBS and Pearson have four and three
representatives, respectively, serving on our board. If we issue voting
securities, or securities convertible into or exchangeable for voting securities
in the future, subject to certain limitations, CBS and Pearson will each have
the right to purchase securities from us so they can maintain their respective
percentage ownerships. In addition, if either CBS or Pearson desires to transfer
any shares of common stock held by it, the other party will have a right of
first refusal to purchase all or a portion of those shares, subject to certain
exceptions. As a result of their share ownership and other rights, CBS and
Pearson collectively can control our management and affairs, elect a majority of
our board of directors and approve significant corporate transactions. This
concentration of ownership and other rights could also delay or prevent a change
in control.

If a competitor of CBS directly or indirectly acquires more than 30% of the
voting power of Pearson or substantially all of Pearson's assets at a time when
Pearson beneficially owns at least 10% of our outstanding common stock, CBS may
within 45 days either:

- Purchase all of our securities held by Pearson; or
- Require Pearson to place these securities in a trust, which would then
dispose of the securities with a view to maximizing the sale price while
disposing of such shares as promptly as reasonably practicable.

Pearson would forfeit its board representation in either event. We cannot
predict which option, if any, CBS would elect in such an event.

Marketing and Distribution

We have established and are planning to maintain our brand as the Web's
leading provider of business and financial news. CBS has agreed to provide the
CBS.MarketWatch.com Web site with promotion and advertising with an aggregate
rate card amount of $21.5 million available from January 2001 through May
2002. This promotion and advertising will be carried or displayed on CBS
Television Network programming, programming on CBS owned-and-operated television
and radio stations and/or banner advertising on CBS Web sites. These advertising
placements may take the form of 30-, 15- or 10-second commercial units, on-air
mentioning of our Web site, billboards, banner advertising and/or in credit
rolls or sign-offs, with CBS having broad discretion as to the type and manner
of placement. As of December 31, 2000, CBS had delivered $38.5 million rate card
amount of promotion and advertising.

CBS has displayed our MarketWatch.com logo and domain name on the CBS
Evening News with Dan Rather, CBS This Morning, The Early Show
and on the news programming of the CBS Television Network and many affiliated
television stations. The logo is usually displayed when business or financial
news is covered during the broadcast. CBS is not obligated to continue to
display our logo or domain name in this particular manner.

We use journalists' appearances on CBS Television and Radio news broadcasts
and on certain affiliate station broadcasts to highlight the CBS.MarketWatch.com
Web site and increase the association of the Web site with CBS. When making
appearances, our journalists are identified with the MarketWatch brand. The CBS
MarketWatch Weekend television show was launched in September 1999. As of
December 31, 2000, the program was aired on 131 stations. The
CBS.MarketWatch.com Web site is also linked from the Web sites of CBS owned and
operated, as well as affiliate, television stations. Each time a user at these
Web sites clicks on the "Finance" section, he or she receives a graphic or story
from the CBS.MarketWatch.com Web site and a direct link to the
CBS.MarketWatch.com Web site. We also have an agreement with Westwood One to
distribute our content over the Westwood One Radio Network. As of December 31,
2000, we produced radio reports for distribution to 154 stations across the
country.

In addition to our CBS-related promotional activities, we advertise on
heavily trafficked Web sites, such as Yahoo! and AOL, and conduct a variety of
other marketing and public relations programs and paid advertisements in print
publications and participation in personal finance, online journalism and
Internet-related conferences. Having obtained brand awareness, we intend to
reduce advertising and marketing expenditures from their historical levels.

We have entered into a number of distribution relationships to enhance our
brand name recognition and audience reach. Key distribution relationships
include:

- Yahoo!, Inc. Since 1999, Yahoo! Inc. has indexed certain of the
CBS.MarketWatch.com news headlines in the finance section of Yahoo! with links
to the CBS.MarketWatch.com Web site for certain slotting fees, advertising buys
and payment per click to our web site. In addition, we have agreed to advertise
on Yahoo! with minimum purchases of $1.5 million over a twelve-month period
beginning in January 2001.
- America Online. In September 1999, we entered into a three-year distribution
agreement with America Online, Inc., or AOL, to be the premiere provider of
business and financial news for AOL's network including its proprietary service,
AOL.com, CompuServe and Netscape. Under the agreement, we created a co-branded
site that enables AOL users to access our content and investment management
tools through the AOL personal finance channel. We have also collaborated with
AOL in sales and marketing efforts. In January 2001, America Online and Time
Warner Inc. merged operations. Time Warner Inc. owns CNN, which operates the
CNN/fn Web site, one of our competitors. Although our AOL agreement stipulates a
guaranteed number of impressions on AOL's network, we are uncertain as to the
future of our relationship with AOL. If we are not able to meet our expectations
for page views from the co-branded Web site, our revenue could be adversely
affected. As of January 1, 2001, we are committed to paying $3.8 million to AOL
over the next two years in fulfillment of the agreement.
- Quicken.com. Since Intuit has been displaying certain of our news columns
and features in portions of its Quicken.com Web site, we receive a share of any
revenues from the sale of advertising on the Quicken.com pages that display this
content. In addition, Quicken.com has indexed certain news headlines from us in
their quote lookup section. We have agreed to pay Quicken a fee per click to our
web site.
- Wireless applications. We are continuing to build our cross-channel
presence. In addition to our broadcast, radio, web and print presence, we are
further strengthening our content and distribution strategy by leveraging the
growth potential of wireless data services and online advertising spending. We
have entered into strategic partnerships in the wireless arena with Sprint,
AT&T, ClearNet, Palm, Omnisky, and AvantGo. Our wireless presence coupled
with our traditional and online media assets, further extends our distribution
and branding, as well as presenting advertisers with integrated campaigns across
platforms that include access to the cellular phone, personal digital assistant,
and pager. We currently offer advertising and sponsorships as well as content
licensing agreements.

We believe that these types of distribution relationships are important to
our continued growth and to increase our exposure to our target audience. We
expect to continue to aggressively pursue additional distribution relationships.

Subscription Services

While substantially all of the programming available on the
CBS.MarketWatch.com Web site is currently free of charge, the
CBS.MarketWatch.com Web site offers subscription-based third-party financial
data services which are targeted at sophisticated investors. These services are
currently created and provided by DBC on a non-exclusive basis under a revenue
sharing arrangement. We act as DBC's sales agent with respect to certain DBC
services in exchange for a fee for new subscribers obtained through the
CBS.MarketWatch.com Web site. The DBC services include MarketWatch RT, a
browser-based, real-time financial data service providing on demand real-time
quotes from the American and New York Stock Exchanges and NASDAQ, and
MarketWatch LIVE, a Windows-based, real-time financial data service providing
"streaming" real-time quotes over the Internet from all major U.S. equity and
futures exchanges.

Our Web site also offers, for a fee, third-party financial data and other
services through external Web sites, such as Hoover's, Inc., which provides
company profiles, or Baseline, which provides company research reports. We
receive a portion of the revenue from the sale of these products or services
through the CBS.MarketWatch.com Web site.

We do not currently and, in the future do not intend to, derive a material
amount of revenue from these services.

Infrastructure, Operations and Technology

The CBS.MarketWatch.com Web site, the BigCharts.com Web site, and
substantially all content licensing business are hosted in our primary data
centers in Minneapolis, Minnesota (in our Minneapolis office), in New York, New York
(co-location with AT&T) and Redwood City, California (co-location with
AT&T). We operate multiple Web servers that run Microsoft Windows 2000
operating systems and use Microsoft Internet Information Server.

Internet access in the Minneapolis data center is provided by Onvoy, UUNet,
GE Internet, AT&T, Cable & Wireless and Winstar. Internet access in the
New York and Redwood City data centers is provided by AT&T. The computer
equipment used to operate our Web sites at all facilities is powered by multiple
uninterruptible power supplies.

Our operations are dependent upon our ability to protect systems against
damage from fire, earthquakes, power loss, telecommunications failure, break-ins,
computer viruses, hacker attacks and other events beyond our control. Our
insurance policies have low coverage limits and therefore our insurance may not
adequately compensate us for any losses that may occur due to any failures or
interruptions in our systems. Our Web sites have in the past and may in the
future experience down time and other problems due to server problems or
capacity.

We are continually developing new and enhanced services, tools and features.
We also use third-party technology for certain of our services and tools. In the
past, our Web sites have experienced significant increases in traffic when there
are significant business or financial news stories. In addition, the number of
our users has increased over time and we are seeking to further increase our
user base. Therefore, our Web sites must accommodate a high volume of traffic
and deliver frequently updated information. Our Web sites have in the past and
may in the future experience slower response times and other problems for a
variety of reasons.

Our business relies on our ability to serve Web pages in a consistent and
timely manner. If the traffic on our Web sites grows at a rate that our current
communication lines cannot support, our pages will be served at a slower rate or
we will be unable to serve pages at all. We also rely on certain third-party
providers for a significant amount of our current bandwidth capacity. If these
providers are unable to maintain their service level agreements, or we are
unable to obtain additional bandwidth as our traffic grows, our business would
be adversely affected.

We also depend on multiple information providers, including but not limited
to, DBC, Interactive Data Corporation, S&P Comstock and Dow Jones, to
provide information and data feeds on a timely basis. Our Web sites could
experience disruptions or interruptions in service due to the failure or delay
in the transmission or receipt of this information. In addition, our users
depend on Internet service providers, online service providers and other Web
site operators for access to our Web sites. Each of them has experienced
significant outages in the past, and could experience outages, delays and other
difficulties due to system failures unrelated to our systems. These types of
occurrences could cause users to perceive our Web site as not functioning
properly and therefore cause them to use other methods to obtain their business
and financial news and other information.

Our market is characterized by rapidly changing technology, evolving industry
standards and frequent new product announcements. These are exacerbated by the
recent growth of the Web and the intense competition in our industry. To be
successful, we must adapt to our rapidly changing market by continually
improving the performance, features and reliability of our services. We could
also incur substantial costs if we need to modify our services or infrastructure
in order to adapt to these changes. Our business could be adversely affected if
we incurred significant costs without adequate results or cannot adapt to these
changes.

Competition

The market for Internet services and products is relatively new,
intensely competitive and rapidly changing. The number of Web sites on the
Internet competing for consumers' attention and spending has proliferated and we
expect that competition will continue to intensify. We compete, directly and
indirectly, for advertisers, viewers, members and content providers with the
following categories of companies:

- Publishers and distributors of traditional off-line media, such as
television, radio and print, including those targeted to business, finance and
investing needs, many of which have established or may establish Web sites, such
as The Wall Street Journal, CNN and CNBC;
- General purpose consumer online services such as AOL and Microsoft Network,
each of which provides access to financial and business-related content and
services;
- Web sites targeted to business, finance and investing needs, such as
TheStreet.com and Motley Fool; and
- Web search and retrieval and other online services, such as Excite@Home,
Lycos, Yahoo!, and other high-traffic Web sites, which offer quotes, financial
news and other programming and links to other business and finance-related Web
sites.

We anticipate that the number of direct and indirect competitors will
increase in the future. This could result in price reductions for our
advertising, reduced margins, greater operating losses or loss of market share,
any of which would materially adversely affect our business, results of
operations and financial condition.

We believe our programming and content compare favorably with our
competitors, as many of them do not primarily provide real-time coverage by
experienced journalists. However, many of our existing competitors, as well as a
number of potential new competitors, have longer operating histories in the Web
market, greater name recognition, larger customer bases, higher amounts of user
traffic and significantly greater financial, technical and marketing resources.
Such competitors may be able to undertake more extensive marketing campaigns,
adopt more aggressive pricing policies, make more attractive offers to potential
employees, distribution partners, advertisers and content providers and may be
able to respond more quickly to new or emerging technologies and changes in Web
user requirements. Further, there can be no assurance that they will not develop
services that are equal or superior to ours or that achieve greater market
acceptance than our offerings. Increased competition could also result in price
reductions, reduced margins or loss of market share, any of which could
seriously harm our business, results of operations and financial condition.

We also must compete with traditional advertising media, such as print, radio
and television, for a share of advertisers' total advertising budgets. We would
lose revenue if the Web is not perceived as an effective advertising medium. As
a result, there can be no assurance that we will be able to compete successfully
against our current or future competitors or that competition will not have a
material adverse effect on our business, results of operations and financial
condition.

Potential Competition from CBS and Pearson

Although our agreements with CBS and Pearson contain limited non-competition
provisions, these provisions have exceptions and do not provide for
exclusive relationships. For example:

- CBS could license its name and logo to other Web sites or internet services
that deliver general news, sports and entertainment. These sites or services
could also offer financial news, as long as delivering comprehensive stock
quotes and financial news to consumers in the English language is not their
primary function and their principal theme and format;
- Pearson may provide hosting services to other Web sites;
- Pearson could also establish an advertising-supported Web site that does not
have as its primary function and its principal theme and format the delivery of
financial news and stock quotes;
- CBS or Pearson could license their respective content to other Web sites or
Internet services; or
- CBS or Pearson could make certain investments in other Web sites or Internet
services.

Any of these could adversely affect us. For example, these sites or services
could compete with us or CBS and Pearson might promote these other sites or
services more actively than they promote our Web sites.

Intellectual Property

We rely primarily on a combination of copyrights, trademarks, trade
secret laws, our user policy and restrictions on disclosure to protect our
intellectual property, such as our content, trademarks, trade names and trade
secrets. We also enter into confidentiality agreements with our employees and
consultants, and seek to control access to and distribution of our other
proprietary information. Despite these precautions, it may be possible for a
third party to copy or otherwise obtain and use the content on our Web sites or
our other intellectual property without authorization. There can be no assurance
that these precautions will prevent misappropriation or infringement of our
intellectual property. A failure to protect our intellectual property in a
meaningful manner could seriously harm our business, operating results and
financial condition. In addition, we may need to engage in litigation in order
to enforce our intellectual property rights in the future or to determine the
validity and scope of the proprietary rights of others. Such litigation could
result in substantial costs and diversion of management and other resources,
either of which could have an adverse effect on our business, operating results
and financial condition.

We license the CBS logo, name and certain news content from CBS pursuant to
the amended and restated license agreement. This agreement could terminate in
certain circumstances and also involves a number of other risks.

We also use certain licensed technology, data and content from third parties.
In these license agreements, the licensors have generally agreed to defend,
indemnify and hold us harmless with respect to any claim by a third party that
the licensed software or content infringes any person's proprietary rights.
There can be no assurance that the outcome of any litigation between such
licensors and a third party or between us and a third party will not lead to
royalty obligations for which we are not indemnified or for which such
indemnification is insufficient, or that we will be able to obtain any
additional license on commercially reasonable terms if at all. In the future, we
may seek to license additional technology or content in order to enhance our
current features or to introduce new services, such as certain of the community
features we may introduce. There can be no assurance that any such licenses will
be available on commercially reasonable terms, if at all. The loss of or
inability to obtain or maintain any of these technology licenses could result in
delays in introduction of new services until equivalent technology, if
available, is identified, licensed and integrated, which could harm our
business, results of operations and financial condition.

Because we license some data and content from third parties, our exposure to
copyright infringement actions may increase because we must rely upon such third
parties for information as to the origin and ownership of such licensed content.
We generally obtain representations as to the origins and ownership of such
licensed content and generally obtain indemnification to cover any breach of any
such representations. However, there can be no assurance that such
representations will be accurate or that such indemnification will be sufficient
to provide adequate compensation for any breach of such representations.

There can be no assurance that infringement or other claims will not be
asserted or prosecuted against us in the future whether resulting from our
internally developed intellectual property or licenses or content from third
parties. Any future assertions or prosecutions could materially adversely affect
our business, results of operations and financial condition. Any such claims,
with or without merit, could be time-consuming, result in costly litigation and
diversion of technical and management personnel or require us to introduce new
content or trademarks, develop non-infringing technology or enter into royalty
or licensing agreements. Such royalty or licensing agreements, if required, may
not be available on acceptable terms, if at all. In the event of a successful
claim of infringement and our failure or inability to introduce new content or
trademarks, develop non-infringing technology or license the infringed or
similar technology on a timely basis, our business, results of operations and
financial condition could be materially adversely affected.

Employees

As of December 31, 2000, there were 259 employees dedicated full time to
our business, 53 of these personnel worked in product and content development,
70 in sales and marketing, 85 in editorial, 17 in Web site operations and 34 in
administration.
We believe that our future success will depend in part on our continued
ability to attract, integrate, retain and motivate highly qualified sales,
technical, and managerial personnel, and upon the continued service of our
senior management and key sales and technical personnel. Although we have
employment agreements with some of our key executives, none of our personnel are
bound by an employment agreement that prevents such person from terminating his
or her relationship at any time for any reason. Competition for qualified
personnel is intense, particularly in the San Francisco Bay Area, where our
headquarters is located. At times we have experienced difficulties in attracting
new personnel. There can be no assurance that we will successfully attract,
integrate, retain and motivate a sufficient number of qualified personnel to
conduct our business in the future.

Government Regulation

There are currently few laws or regulations that specifically regulate
communications or commerce on the Web. However, laws and regulations may be
adopted in the future that address issues such as user privacy, pricing, and the
characteristics and quality of products and services. For example, the
Telecommunications Act sought to prohibit transmitting certain types of
information and content over the Web. Several telecommunications companies have
petitioned the Federal Communications Commission to regulate Internet service
providers and online services providers in a manner similar to long distance
telephone carriers and to impose access fees on these companies. This could
increase the cost of transmitting data over the Internet. Moreover, it may take
years to determine the extent to which existing laws relating to issues such as
property ownership, libel and personal privacy are applicable to the Web. Any
new laws or regulations relating to the Web could adversely affect our
business.

Factors that May Affect Our Operating Results

We May Experience Potential Fluctuations in our Quarterly Operating
Results, Face Unpredictability of Future Revenue, Continue to Incur Losses in
the Future and Experience Seasonality in Our Operating Results

Our quarterly operating results may fluctuate significantly in the future
as a result of a variety of factors, many of which are outside our control.
These factors include:

- The early stage of our development, particularly given that we did not
become a separate legal entity until October 1997;
- Fluctuations in traffic levels on our Web sites, which can be significant as
a result of business and financial news events;
- Weakening demand for advertising on our Web sites as well as on the Web in
general;
- Reductions in rates paid for Web advertising resulting from softening
demand, competition or other factors;
- Changes in demand for licenses of our technology and news;
- The ability to develop new services, including broadband services and tools;
- The success of our joint venture in Europe with the Financial Times Group;
- Our ability to enter into or renew our marketing and distribution
agreements;
- The amount and timing of our costs related to our marketing efforts or other
initiatives;
- The amount and timing of costs related to our new product development
efforts;
- Fees we may pay for distribution or content agreements or other costs we
incur as we expand our operations;
- New services introduced by us or our competitors;
- The level of Web usage;
- Competitive factors;
- Technical difficulties or system downtime affecting the Web generally or the
operation of our Web sites; or
- Economic conditions specific to the Web as well as general economic
conditions.

We have incurred operating losses in each fiscal quarter since we were
formed. We expect operating losses to continue for the foreseeable future as we
intend to increase our operating expenses to grow our business.

Over time, our revenues have come from a mix of advertising, content
licensing, broadcasting and subscription service fees. However, we expect to be
substantially dependent on advertising revenues for the foreseeable future. Our
revenue has grown more slowly than we expected during the past quarter due to
decreased spending by companies on Web advertising together with increasingly
uncertain economic and market conditions. We expect our quarterly revenues and
operating results to be particularly affected by the changes in the level of
our advertising revenue in each quarter. Our operating expenses are based on our
expectations of our future revenues and are relatively fixed in the short term.
If we have lower revenues, particularly advertising revenues, than we expect, we
may not be able to quickly reduce our spending in response. In addition, we have
and will expect to continue to increase our operating expenses to grow our
business. Any shortfall in our revenues would have a direct impact on our
operating results for a particular quarter and these fluctuations could affect
the market price of our common stock in a manner unrelated to our long-term
operating performance.

We believe that advertising sales in traditional media, such as television
and radio, generally are lower in the first and third calendar quarters of each
year. We believe that web advertising sales follow the same seasonal patterns as
those in the traditional media, and therefore, we have experienced and should
continue to experience lower advertising revenues in the first and third
calendar quarters of each year. Furthermore, traffic levels on our Web sites
typically fluctuate with the occurrence of significant events in the business
and financial news, such as fluctuations in the stock markets, which could cause
changes in our audience size.

We Depend on the Sale of Advertisements on Our Web Sites, and If Demand
For Web Advertising Continues to Soften, Our Business Would Be Harmed

We expect to derive a substantial amount of our revenues from advertising
for the foreseeable future. We and other Web advertisers have recently
experienced softening in demand of our advertising services due to decreased
spending on Web advertising by companies and due to general uncertainty in the
economy. We expect this reduced demand to continue in the future which will
cause our advertising revenue to be lower than we expected. This would
substantially harm our business and could result in a decline in the trading
price of our common stock.

Furthermore, advertisers that have traditionally relied upon other
advertising media may be reluctant to advertise on the Web. Advertisers that
already have invested substantial resources in other advertising methods may be
reluctant to adopt a new strategy and may find it more difficult to measure the
effectiveness of web advertising. In addition, our advertising packages are sold
in campaigns ranging from less than 2 weeks to a year or more. Advertisers
generally have the right to cancel a campaign with two weeks notice without
penalty. Therefore, advertising revenues would be adversely affected if we fail
to offer a desirable opportunity for on-line advertising.

Because No Standard has been Widely Accepted to Measure the Effectiveness
of Web Advertisements, Changes in Current Pricing Models would Seriously Harm
Our Operating Results.

Different pricing models are used to sell advertising on the Web. It is
difficult to predict which, if any, will emerge as the industry standard. This
makes it difficult to project our future advertising rates and revenues. For
example, advertising rates based on the number of "click throughs," or user
requests for additional information made by clicking on the advertisement,
instead of rates based solely on the number of impressions, or times an
advertisement is displayed, could adversely affect our revenues because
impression-based advertising comprises a substantial majority of our current
advertising revenues. Our advertising revenues could be adversely affected if we
are unable to adapt to new forms of Web advertising. Moreover, "filter" software
programs that limit or prevent advertising from being delivered to a Web user's
computer are available. Widespread adoption of this software could adversely
affect the commercial viability of Web advertising.

We Depend on Our Strategic Relationships with Other Web Sites

We depend on establishing and maintaining distribution relationships with
high-traffic Web sites for a significant portion of our traffic. There is
intense competition for placements on these sites, and we may not be able to
enter into such relationships on commercially reasonable terms or at all. Even
if we enter into distribution relationships with these Web sites, they
themselves may not attract significant numbers of users. Therefore, our sites
may not receive additional users from these relationships. Moreover, we may have
to pay significant fees to establish these relationships and continue to pay
significant fees to maintain these type of relationships.

Occasionally, we enter into agreements with advertisers, content providers or
other high-traffic Web sites that require us to exclusively feature these
parties in certain sections of our Web site. Existing and future exclusivity
arrangements may prevent us from entering into other content agreements,
advertising or sponsorship arrangements or other strategic relationships. Many
companies we may pursue for a strategic relationship also offer competing
services. As a result, these competitors may be reluctant to enter into
strategic relationships with us. Our business could be adversely affected if we
do not establish and maintain additional strategic relationships on commercially
reasonable terms or if any of our strategic relationships do not result in
increased use of our Web sites.

We Depend on License Revenues, And If License Revenues Were To Decline,
Our Business Would Be Harmed

We expect to derive a substantial amount of our revenues from licensing
of our content for the foreseeable future. License revenues depend on new
customer contracts and customer contract renewals and could decrease if new
business is not found or customers choose to renew for lesser amounts, terminate
early or forego renewal. A significant amount of our license revenue is earned
from brokerages and financial service companies. The amount of license revenues
depends on the number of users these customers have each month. If the number of
users were to decrease, our license revenue would decrease. The growth of our
license revenue could also be limited as there are a limited number of
brokerages and financial service companies. In addition, certain license
contracts guarantee the performance of our web sites. If our sites do not
perform as guaranteed, license revenue would be adversely affected.

We Depend on Third Parties to Track and Measure the Delivery of
Advertisements and It Could be Difficult to Replace These Services

It is important to our advertisers that we accurately measure the
demographics of our user base and the delivery of advertisements on our Web
sites. We depend on third parties to provide these measurement services. If they
are unable to provide these services in the future, we would be required to
perform them ourselves or obtain them from another provider. This could cause us
to incur additional costs or cause interruptions in our business during the time
we are replacing these services. We are implementing additional systems designed
to record demographic data on our users. If we do not develop these systems
successfully, we may not be able to accurately evaluate the demographic
characteristics of our users. Companies may not advertise on our Web sites or
may pay less for advertising if they do not perceive our measurements or
measurements made by third parties to be reliable.

If We Don't Expand Our Operations Successfully, Our Business Will be
Harmed

We believe that we will need to expand our business and operations in
order to support our business. This expansion is likely to continue to place a
significant strain on our resources. As we grow, we may need to implement new
operational systems, procedures and controls. If we are unable to accomplish any
of these, our business could be adversely affected.

We Must Develop New and Enhanced Services and Features for Our Web
Sites

We believe that our Web sites will be more attractive to advertisers if
we develop a larger audience comprised of demographically favorable users.
Accordingly, we intend to introduce additional or enhanced services in the
future in order to retain our current users and attract new users. If we
introduce a service that is not favorably received, our current users may not
continue using our service as frequently. New users could also choose a
competitive service over ours.

We may also experience difficulties that could delay or prevent us from
introducing new services. Furthermore, these services may contain errors that
are discovered after the services are introduced. We may need to significantly
modify the design of these services on our Web site to correct these errors. Our
business could be adversely affected if we experience difficulties in
introducing new services or if users do not accept these new services.

In February 2001, we launched a new version of our CBS.MarketWatch.com Web
site with enhanced navigation, new news and personal finance sections and
additional tools. Our business could be adversely affected if the new design of
our site and additional services are not accepted by users or if the site does
not perform as intended or to an acceptable level.

We Depend on the Continued Growth in Use of the Web, Particularly for
Financial News and Information

Because we expect to depend substantially on advertising revenue for the
foreseeable future, our business depends on businesses and consumers continuing
to increase their use of the Web for obtaining news and financial information as
well as for conducting commercial transactions. Our advertising revenue and
therefore our business would be adversely affected if Web usage does not
continue to grow. Web usage may be inhibited for a number of reasons, such
as:

- Inadequate network infrastructure;
- Security concerns;
- Inconsistent quality of service; and
- Availability of cost-effective, high-speed service.

If Web usage grows, the Internet infrastructure may not be able to support
the demands placed on it by this growth or its performance and reliability may
decline. In addition, Web sites have experienced interruptions in their service
as a result of outages and other delays occurring throughout the Internet
network infrastructure. If these outages or delays frequently occur in the
future, Web usage, as well as usage of our Web sites, could grow more slowly or
decline.

We Face Risks Associated with Bandwidth Constraints

Our business relies on our ability to serve Web pages in a consistent and
timely manner. If the traffic on our Web sites grows at a rate that our current
communication lines cannot support, our pages will be served at a slower rate or
we will be unable to serve pages at all. We also rely on certain third party
providers for a significant amount of our current bandwidth capacity. If these
providers are unable to maintain their service level agreements or we are unable
to obtain additional bandwidth as our traffic grows, our business would be
adversely affected.

Unauthorized Break-Ins to Our Site Could Harm Our Business

Our servers are vulnerable to computer viruses, physical or electronic
break-ins and similar disruptions, which could lead to interruptions, delays or
loss of data. In addition, unauthorized persons may improperly access our data.
A number of popular Web sites have recently experienced attacks from "hackers"
and other intrusions. Any actions like these may harm us and may be very
expensive to remedy and could damage our reputation and discourage new and
existing users from using our site.

Web Security Concerns Could Hinder Internet Commerce

The need to securely transmit confidential information over the Internet
has been a significant barrier to electronic commerce and communications over
the Web. Any well-publicized compromise of security could deter more people from
using the Web or from using it to conduct transactions that involve transmitting
confidential information, such as stock trades or purchases of goods or
services. Because many of our advertisers seek to advertise on our Web sites to
encourage people to use the Web to purchase goods or services, our business
could be adversely affected. We may also incur significant costs to protect
against the threat of security breaches or to alleviate problems caused by such
breaches.

We Could Face Liability Related to Our Storage of Personal Information
About Our Users

We have a non-disclosure policy displayed on our Web sites. Our policy is
not to willfully disclose any individually identifiable information about any
user to a third party without the user's consent. This policy is accessible to
users of our personalized services when they initially register. Despite this
policy, however, if third persons were able to penetrate our network security or
otherwise misappropriate our users' personal information or credit card
information, we could be subject to liability. These could include claims for
unauthorized purchases with credit card information, impersonation or other
similar fraud claims. They could also include claims for other misuses of
personal information, such as for unauthorized marketing purposes. These claims
could result in litigation. In addition, the Federal Trade Commission and
certain states have been investigating certain Internet companies regarding
their use of personal information. We could incur additional expenses if new
regulations regarding the use of personal information are introduced or if
federal and state agencies chose to investigate our privacy practices.

We Could Face Liability for the Information Displayed on Our Web Sites

We may be subjected to claims for defamation, negligence, copyright or
trademark infringement or based on other theories relating to the information we
publish on our Web sites. These types of claims have been brought, sometimes
successfully, against online services as well as other print publications in the
past. We could also be subjected to claims based upon the content that is
accessible from our Web sites through links to other Web sites. Our insurance
may not adequately protect us against these types of claims.

Our Common Stock Price is Volatile and Could Fluctuate Significantly

The trading price of our stock has been and may continue to be subject to
wide fluctuations. During 2000, the closing sale prices of our common stock on
the NASDAQ National Market ranged from $1.84 to $45.00. As of March 20, 2001,
the closing sale price was $4.03. Our stock price may fluctuate in response to a
number of events and factors, such as quarterly variations in operating results,
announcements of technological innovations or new products and media properties
by us or our competitors, changes in financial estimates and recommendations by
securities analysts, the operating and stock price performance of other
companies that investors may deem comparable, and news reports relating to
trends in our markets. In addition, the stock market in general, and the market
prices for Internet-related companies in particular, have experienced extreme
volatility that often has been unrelated to the operating performance of such
companies. These broad market and industry fluctuations may adversely affect the
price of our common stock, regardless of our operating performance.

Item 2. Properties

Our principal administrative, sales, marketing and news facilities
are located in approximately 24,000 square feet of office space in San
Francisco, California, leased from CBS. This lease expires in March 2008. Our
engineering, development, and licensing sales groups are based out of 20,000
square feet of leased space in Minneapolis, Minnesota. We also have data centers
in Minneapolis, New York and Redwood City, California. Any system failure at
these locations could lead to interruptions, delays or cessations in service to
users of the Web sites, which could have a material adverse effect on our
business, results of operations and financial condition.

Item 3. Legal Proceedings

We were not a party to any significant legal proceedings at December
31, 2000.

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

On December 21, 2000, we held a special meeting of our stockholders.
At the meeting, our stockholders approved the proposal described below. We
solicited proxies pursuant to Regulation 14A under the Securities and Exchange
act of 1934. As of November 3, 2000, the record date for the special meeting,
there were 16,541,403 shares of common stock entitled to vote, of which
14,843,275 shares of common stock were present in person or by proxy voted at
the meeting.

1. Proposal to approve the adoption of 2000 Employee Stock Purchase
Plan.



|For
Against
Abstain 
Broker Non-Votes | 14,381,741
457,809
3,725 
-
|------------------------------------- | ---------------------------

Item 4A. Executive Officers

The following table sets forth certain information regarding the
executive officers of MarketWatch.com as of April 2, 2001:

`Name               Age                    Position
------------------------------ ----- ---------------------------------------------
Larry S. Kramer...............   50  President, Chief Executive Officer and
                                     Chairman of the Board of Directors
Joan P. Platt.................   47  Chief Financial Officer and Secretary
Thom Calandra.................   44  Editor-in-Chief and Executive Vice
                                     President of News
William Bishop................   32  Executive Vice President, Business &
                                     Product Development
Scot McLernon.................   43  Executive Vice President of Advertising Sales
Scott Kinney..................   39  Executive Vice President of Licensing Sales
Michele Chaboudy..............   54  Vice President of Marketing`

Mr. Kramer served as President, Chief Executive Officer and a member of the
Board of Directors of MarketWatch.com since October 1997. On November 15, 1999,
Mr. Kramer was elected Chairman of the Board. From February 1994 until October
1997, Mr. Kramer served as Vice President for News and Sports of Data
Broadcasting Corporation. Mr. Kramer spent more than twenty years in journalism,
including serving as a financial reporter, Metro Editor and Assistant Managing
Editor of The Washington Post, and most recently serving as Executive Editor of
the San Francisco Examiner. He has been a recipient of National Press Club,
Gerald E. Leob and Associated Press Awards. During Mr. Kramer's tenures at The
Washington Post and the San Francisco Examiner, his staffs at each paper won a
Pulitzer Prize. Mr. Kramer serves as a member of the Board of Directors of
American Information Company, which conducts an auto buying service under the
name "Consumers Car Club" through its carclub.com Web site. Mr. Kramer holds a
B.S. degree in Journalism from Syracuse University and an M.B.A. degree from the
Harvard Business School.

Ms. Platt joined MarketWatch.com as Chief Financial Officer in December 1999.
From May of 1999 through November 1999, Ms. Platt was Chief Financial Officer of
Indus International, a provider of enterprise asset management software. From
April 1996 to April 1999, Ms. Platt served as Chief Financial Officer for Splash
Technologies Holdings, Inc., a Sunnyvale-based international supplier of color
servers. Previously, Ms. Platt served a 20-year tenure at Coopers & Lybrand,
including 10 years as a partner, where she specialized in high technology
companies. Ms. Platt holds a B.S. in business administration from The
Pennsylvania State University.

Mr. Calandra has served as Editor-in-Chief and Vice President of News of
MarketWatch.com since October 1997 and Executive Vice President of News since
February 2000. He was Director of News with DBC from April 1996 until October
1997 and was a consultant to DBC from February 1996 until April 1996. From
October 1995 until January 1996, he served as Financial Editor with USA Today
Online, the USA Today newspaper's Web site. Mr. Calandra was employed by
Bloomberg LP, a financial news service, from January 1994 until September 1995,
serving in its London office and holding positions as the lead markets editor
and European financial columnist. Mr. Calandra holds a B.A. degree in Arts from
City University of New York and an M.A. degree in English from the University of
Arizona.

Mr. Bishop has served as Vice President of Business Development of
MarketWatch.com since the Company's formation in October 1997 and Executive Vice
President of Business Development since February 2000. In October, 2000, Mr.
Bishop became Executive Vice President of Business and Product Development. From
August 1995 until October 1997, Mr. Bishop was employed by DBC, most recently as
Director of DBC Online. Mr. Bishop holds a B.A. degree in East Asian Studies
from Middlebury College and an M.A. degree in International Economics from Johns
Hopkins University.

Mr. McLernon has served as Vice President of Advertising Sales of
MarketWatch.com since January 1998 and Executive Vice President of Advertising
Sales since February 2000. From March 1997 until December 1997, he served as
National Director of Advertising Sales with Quote.com, Inc., a financial news
Web site operator. Mr. McLernon was also the National Director of Internet
Strategy with Softbank Interactive Marketing, a subsidiary of Softbank Corp., a
distributor and wholesaler of software and peripheral equipment for PCs, from
March 1996 until March 1997. From June 1994 until March 1996, he served as
Account Manager with Interactive Marketing.

Mr. Kinney has served as Vice President of Licensing of MarketWatch.com since
June 1999 and Executive Vice President of Licensing since February 2000. From
May 1998 through June 1999, Mr. Kinney was the Chief Operating Officer and Chief
Financial Officer for BigCharts Inc. Mr. Kinney joined BigCharts in May 1998,
after spending eight years with The Boston Consulting Group (BCG), a strategic
management consulting firm. Mr. Kinney holds an undergraduate degree from
Dartmouth College, and an M.B.A. from Stanford University.

Ms. Chaboudy has served as Vice President of Marketing of MarketWatch.com
since May 1998. From January to May 1998, she was a consultant to
MarketWatch.com. From November 1997 until January 1998, she was an independent
marketing consultant. From March 1997 until November 1997, Ms. Chaboudy served
as a Director, responsible for marketing and business development, at the Wired
News division of Wired Digital Inc., a magazine publisher. From September 1996
until March 1997, she was a marketing consultant. From January 1996 until
September 1996, she served as the Senior Vice President for Marketing and Sales
for World Pages Inc., an Internet directory provider. Ms. Chaboudy holds a B.A.
degree in History from DePauw University, an M.B.A. degree from Pepperdine
University and a Master's degree in Library & Information Sciences from
Indiana University.



PART II

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

Since January 15, 1999, our common stock, par value $.01, has been
traded on the NASDAQ Stock Market under the symbol "MKTW". The approximate
number of record holders of our common stock as of March 20, 2001 was 291
(although we believe there was a greater number of beneficial owners). We do not
intend to pay dividends for the foreseeable future.

The trading price of our common stock has been, and may continue to be,
subject to wide fluctuations in response to a number of events and factors, such
as quarterly variations in operating results, announcements of technological
innovations or new products and media properties by us or our competitors,
changes in financial estimates and recommendations by securities analysts, the
operating and stock price performance of other companies that investors may deem
comparable to ours, and news reports relating to trends in our markets. In
addition, the stock market in general, and the market prices for Internet-related
companies in particular, have experienced extreme volatility that often
has been unrelated to the operating performance of such companies. These broad
market and industry fluctuations may adversely affect the trading price of our
common stock, regardless of our operating performance.

The following table presents, for the periods indicated, the high and low
sales price of our common stock as reported on the Nasdaq National Market.

`Year ended
    December 31, 2000           High        Low
---------------------------  ----------  ----------
First Quarter.............. $    45.94  $    33.06
Second Quarter.............      35.25       13.13
Third Quarter..............      26.88        7.75
Fourth Quarter.............       8.13        1.63


       Year ended
    December 31, 1999           High        Low
---------------------------  ----------  ----------
First Quarter (from
January 15, 1999).......... $   130.00  $    56.00
Second Quarter.............     107.00       45.00
Third Quarter..............      59.75       26.13
Fourth Quarter.............      64.81       36.00`

Dividend Policy

We have never declared or paid any cash dividends on our common stock or
other securities, and we do not anticipate paying cash dividends in the
foreseeable future.

Item 6. Selected Consolidated Financial Data

`MARKETWATCH.COM                     DBC ONLINE/ NEWS(1)
                                          ---------------------------------------------  --------------------------
                                                                            Inception
                                                                           (October 29,   January 1,
                                                                              1997)          1997
                                              Years Ended December 31,       Through       Through      Year Ended
                                          -------------------------------  December 31,  October 28,   December 31,
                                            2000       1999       1998         1997          1997          1996
                                          ---------  ---------  ---------  ------------  ------------  ------------
CONSOLIDATED STATEMENT OF
   OPERATIONS DATA
(in thousands except per share data)
Net revenues............................ $  53,907  $  24,935  $   7,027  $        630  $      1,172  $        607
Gross profit............................    32,895     15,034      4,190           482           512           156
Operating expenses......................   121,448     77,324     16,444           563         1,895         2,023
Net loss................................ $ (91,263) $ (60,878) $ (12,413) $        (81) $       (943) $     (1,172)
Basic and diluted net loss
  per share(2).......................... $   (5.83) $   (4.68) $   (1.38) $      (0.01)
Shares used to compute basic
  and diluted net loss per share (2)(3).    15,659     13,004      9,000         9,000


                                                                                             DBC
                                                                                           ONLINE/
                                                       MARKETWATCH.COM                     NEWS(1)
                                          ---------------------------------------------  ------------
                                                                      December 31,
                                          -----------------------------------------------------------
                                            2000       1999       1998         1997          1996
                                          ---------  ---------  ---------  ------------  ------------
CONSOLIDATED BALANCE SHEET DATA
(in thousands)
Cash and cash equivalents............... $  45,356  $   9,500  $     140  $          -  $          -
Working capital (deficit)...............    48,868     18,544     (5,889)          139        (1,502)
Total assets............................   144,240    156,855      4,487           237           409
Advances from DBC(4)....................         -          -      3,946             -         1,644
Total stockholders' equity
  (deficiency)..........................   133,417    149,148     (3,130)          152        (1,320)`

___________________

(1) Represents the results of operations of the Predecessor
Business for the period indicated.

(2) Reflects the conversion of MarketWatch.com LLC into a corporation as if
such transaction had occurred as of the beginning of the period indicated.

(3) See Note 2 to Notes to the Consolidated Financial Statements for
information concerning the number of shares used in computing net loss per
share.

(4) Advances from DBC by DBC Online/News at October 28, 1997 were neither
paid by the Predecessor business nor assumed by MarketWatch.com.



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

This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including, without limitation, statements regarding our
expectations, beliefs, intentions or future strategies that are signified by the
words "expects", "anticipates", "intends", "believes", or similar language. All
forward-looking statements included in this document are based on information
available to us on the date hereof, and we assume no obligation to update any
such forward-looking statements. Actual results could differ materially from
those projected in the forward-looking statements. In evaluating our business,
prospective investors should carefully consider the information set forth below
under the caption "Business - Factors That May Affect Future Operating Results"
in addition to the other information set forth herein. We caution investors that
our business and financial performance are subject to substantial risks and
uncertainties.

Overview

We completed our initial public offering in January 1999. Prior to our
initial public offering, we were a joint venture owned 50% each by DBC and CBS,
and were formed as a limited liability company in October 1997. We were formed
as the successor to DBC's Online/News Business, which commenced operations in
October 1995. Immediately prior to the closing of our initial public offering,
we were re-organized from a limited liability company into a corporation.

Since our formation, we have operated as a provider of business news,
financial programming and analytic tools, with services including news articles,
feature columns and analytic tools, such as stock quotes and charting. These
services are available free of charge. We sell advertising banners and
sponsorships on our Web sites, license our content and tools to electronic
brokers, financial publishers and portals, and sell subscriptions to certain DBC
products.

We have several agreements with CBS and DBC that include the following:

- Upon formation of MarketWatch.com into a corporation, CBS agreed to
contribute $30.0 million in rate card advertising through October 2002. The
$30.0 million contribution was delivered in full by the end of the quarter ended
June 30, 2000;
- CBS licenses its trademark and certain news content for royalties
approximating 8% of all of our net revenues other than revenue attributable to
DBC and certain other revenue. The license agreement expires in October 2005;
- DBC provided us with part of our Web site infrastructure and certain
operational and administrative services at DBC's cost, as required. DBC's
service obligation expires on October 29, 2005. In addition, DBC pays us a
monthly, per subscriber fee for delivery of our news to DBC subscribers, subject
to a minimum payment of $100,000 per month. This obligation will expire in
October 2002; and
- In May 2000, CBS contributed an additional $30.0 million in rate card
advertising and promotion to be delivered between March 1, 2000 and May 5, 2002.
CBS has delivered $8.5 million of the additional $30.0 million in advertising as
of December 31, 2000.

In January 2000, we entered into a joint venture agreement with the Financial
Times Group, a part of Pearson plc, to establish Financial Times Marketwatch.com
(Europe) Limited, an Internet-based provider of real-time business news,
financial programming and analytical tools. The joint venture,
FTMarketWatch.com, launched in June 2000, and provides free, real-time financial
and market news to Europe's rapidly growing communities of individual investors.
Under the agreement, we licensed our trademark and technology to the joint
venture and contributed certain domain names and 500,000 pounds sterling for a
50% interest in the joint venture. The Financial Times licenses its trademarks
for a royalty fee, will provide 15.0 million pounds sterling worth of rate card
advertising over five years and contributed 500,000 pounds sterling in cash for
a 50% interest in the joint venture. In 2000, we contributed an aggregate
additional $4.2 million to the joint venture to fund operations in accordance
with the agreement.

In January 2001, Pearson acquired Data Broadcasting Corporation's 34.1% stake
in MarketWatch.com, Inc.

Our ability to generate significant revenue or reach profitability in the
future is uncertain. Further, in view of the rapidly evolving nature of our
business and our limited operating history, we have little experience
forecasting our revenues. Therefore, we believe that period-to-period
comparisons of our financial results are not necessarily meaningful and you
should not rely upon them as an indication of our future performance. To date,
we have incurred substantial costs to create, introduce and enhance our
services, to develop content, to build brand awareness and to grow our business.
As a result, we have incurred operating losses in each fiscal quarter since we
were formed. We expect operating losses to continue for the foreseeable future
as we intend to increase our operating expenses to grow our business. Because of
noncash charges in connection with our acquisition of BigCharts, we also expect
to incur net losses. We may also incur additional costs and expenses related to
content creation, technology, marketing or acquisitions of businesses and
technologies to respond to changes in our rapidly changing industry. These costs
could have an adverse effect on our future financial condition or operating
results.



Results of Operations

`Years ended December 31,
                                          ----------------------------------
                                             2000        1999        1998
                                          ----------  ----------  ----------
                                       (in thousands, except per share data)
Net revenues:
  Advertising........................... $   34,952  $   18,033  $    5,115
  Licensing.............................     15,809       5,262       1,285
  Other.................................      3,146       1,640         627
                                          ----------  ----------  ----------
       Total net revenues...............     53,907      24,935       7,027
Cost of net revenues....................     21,012       9,901       2,837
                                          ----------  ----------  ----------
       Gross profit.....................     32,895      15,034       4,190
                                          ----------  ----------  ----------
Operating expenses:
  Product development...................      8,725       4,762       1,468
  General and administrative............     14,211       8,948       3,429
  Sales and marketing...................     47,130      33,430      11,547
  Purchased in-process research
    and development.....................          -         200           -
  Amortization of goodwill
    and intangibles.....................     51,382      29,984           -
                                          ----------  ----------  ----------
       Total operating expenses.........    121,448      77,324      16,444
                                          ----------  ----------  ----------
          Loss from operations..........    (88,553)    (62,290)    (12,254)
   Interest income (expense), net.......      2,285       1,412        (159)
   Loss in joint venture................     (4,995)          -           -
                                          ----------  ----------  ----------
Net loss................................ $  (91,263) $  (60,878) $  (12,413)
                                          ==========  ==========  ==========

Basic and diluted net loss per share.... $    (5.83) $    (4.68) $    (1.38)
                                          ==========  ==========  ==========
Shares used in the calculation of
  basic and diluted net loss per share..     15,659      13,004       9,000
                                          ==========  ==========  ==========



                                                Years ended December 31,
                                          ----------------------------------
                                             2000        1999        1998
                                          ----------  ----------  ----------
                                            (as a percentage of net revenues)
Net revenues:
  Advertising...........................         65 %        72 %        73 %
  Licensing.............................         29          21          18
  Other.................................          6           7           9
                                          ----------  ----------  ----------
       Total net revenues...............        100         100         100
Cost of net revenues....................         39          40          40
                                          ----------  ----------  ----------
       Gross profit.....................         61          60          60
                                          ----------  ----------  ----------
Operating expenses:
  Product development...................         16          19          21
  General and administrative............         26          36          49
  Sales and marketing...................         87         134         164
  Purchased in-process research
    and development.....................          -           1           -
  Amortization of goodwill
    and intangibles.....................         95         120           -
                                          ----------  ----------  ----------
       Total operating expenses.........        225         310         234
                                          ----------  ----------  ----------
          Loss from operations..........       (164)       (250)       (174)
   Interest income (expense), net.......          4           6          (2)
   Loss in joint venture................         (9)          -           -
                                          ----------  ----------  ----------
Net loss................................       (169)%      (244)%      (176)%
                                          ==========  ==========  ==========`

Net Revenues

Net revenues are primarily derived from the sale of advertising on our
Web sites and broadcast properties and licensing of our charting and news
content.Net revenues increased by 116% to $53.9 million for
the year ended December 31, 2000 from $24.9 million for the year ended December
31, 1999 and increased 256% comparing net revenues for the year ended December
31, 1999 to the same period in 1998. The increases were due primarily to the
increase in the number of ads placed on our Web sites, the increase in licensing
revenue associated with the purchase of BigCharts in June 1999 and the
introduction of the CBS MarketWatch Weekend television show in September 1999.

The increase in advertising revenues was caused by several interrelated
factors, including the following:

- Greater number of advertisers;
- Increase in users of our Web sites and resultant page views with
advertisements contained on those pages;
- Increase in inventory available for sale due to the BigCharts acquisition
and the formation of strategic relationships such as Yahoo! and AOL;
- Increase in size and productivity of our direct sales force;
- Increased rate card pricing for ad placements; and
- Greater flexibility and sophistication of advertising packages offered to
advertisers.

Substantially all of our advertising customers purchase advertising under
short-term contracts. Customers can cease advertising on short notice without
penalty. Advertising revenues would be adversely affected if we were unable to
renew advertising contracts with existing customers or obtain new customers. We
expect to continue to derive a majority of our future net revenues from selling
advertisements. The market for Web advertising is intensely competitive, and
advertising rates could be subject to pricing pressure in the future. If we are
forced to reduce our advertising rates or we experience lower CPM's (cost per
thousand page views) across our Web sites or lower click-through advertising
rates as a result of such competition or otherwise, future revenues could be
adversely affected.

The increase in license revenue was caused by several interrelated factors,
including the following:

- Increase in the number of licensees;
- Increase in license products available due in part to the BigCharts
acquisition; and
- Increased size and productivity of our sales force.

License revenues depend on customer contract renewals and could decrease if
customers choose to renew for lesser amounts, terminate early or forego renewal,
as well as our ability to obtain new customers. A significant amount of our
license revenue is earned from brokerages and financial service companies. The
amount of license revenues depends on the number of users these customers have
each month. If the number of users were to decrease, our license revenue would
decrease. The growth of our license revenue could also be limited as there are a
limited number of brokerages and financial service companies. In addition,
certain license contracts guarantee the performance of our web sites. If our
sites do not perform as guaranteed, license revenue would be adversely
affected.

Cost of Net Revenues

Cost of net revenues primarily consists of costs related to advertising
and news, including compensation, royalties payable to CBS and content providers
web site infrastructure costs and costs of serving ads, and costs related to
license revenue including communication lines and data fees.

Cost of revenues increased by 112% to $21.0 million for the year ended
December 31, 2000 from $9.9 million for the year ended December 31, 1999 and
increased 254% comparing the year ended December 31, 1999 to the same period in
1998. Cost of revenues increased due to the addition of news reporters and
editors, additional network communications lines, equipment and personnel to
accommodate increased traffic on our Web sites and license services, costs to
serve advertisements on the site, and royalties paid to CBS. In addition, costs
of licensing revenue increased due to the addition of BigCharts in June 1999. As
a percentage of net revenues, cost of net revenues were 39% for the year ended
December 31, 2000, 40% for the year ended 1999 and 40% in the same period in
1998. Cost of revenues is expected to increase in absolute dollars in the future
as a result of increases in the royalties payable to CBS; our intention to
increase the number of editorial staff; initial costs in excess of revenues
related to broadcast and broadband products; and addition of equipment and
bandwidth costs to support increased traffic on our Web sites.

Product Development

Product development expenses primarily consist of license fees for
content, compensation for software developers, and expenses for contract
programmers and developers.   Product development expenses
increased by 81% to $8.7 million for the year ended December 31, 2000 from $4.8
million for the year ended December 31, 1999 and increased 220% comparing the
year ended December 31, 1999 with the same period in 1998. Product development
expenses increased due to increased headcount, the purchase of BigCharts and
associated expenses in 1999, and an increase in depreciation expense related to
capital expenditures for technology as we developed our Web sites'
infrastructure to replace DBC services. As a percentage of net revenues, product
development expenses were 16%, 19% and 21% for the years ended December 31,
2000, 1999 and 1998, respectively. The decrease as a percentage of net revenues
occurred as net revenues grew more quickly than personnel costs. In absolute
dollars, we expect to continue to increase product development expenditures to
maintain and enhance our Web sites and product offerings.



General and Administrative

General and administrative expenses primarily consist of compensation and
benefits for finance, business development and administrative personnel,
allocations from DBC for administrative services, occupancy and facility costs,
professional fees, depreciation charges and bad debt expense.
General and administrative expenses increased by 60% to $14.2 million for
the year ended December 31, 2000 from $8.9 million for the year ended December
31, 1999 and increased 162% comparing the year ended December 31, 1999 with the
same period in 1998. As a percentage of net revenues, general and administrative
costs were 26%, 36% and 49% for the years ended December 31, 2000, 1999 and
1998, respectively.

General and administrative expenses increased in absolute dollars due to
increased headcount, occupancy, legal and consulting expenses. The absolute
dollar level of general and administrative expense is expected to increase in
future periods as a result of an increase in personnel and costs to support
MarketWatch's larger operations.

Sales and Marketing

Sales and marketing expenses primarily consist of noncash promotion and
advertising provided by CBS, online and offline advertisements, promotional
materials, distribution costs and compensation to our direct sales force.Sales and marketing expenses increased by 41% to $47.1 million
for the year ended December 31, 2000 from $33.4 million for the year ended
December 31, 1999, and increased 190% comparing the year ended December 31, 1999
with the same period in 1998. As a percentage of net revenues, sales and
marketing expenses were 87%, 134% and 164% for the years ended December 31,
2000, 1999 and 1998, respectively. The decrease as a percentage of net revenues
occurred as revenue grew more rapidly than advertising spending and personnel
costs.

Sales and marketing expenses increased in absolute dollars due to a number of
factors including:

- An increase in the utilization of promotions and advertising contributed by
CBS in each of the three years;
- Development of our direct sales force in 1998, growth of our direct sales
force in 1999 and 2000 and increased sales commissions from higher advertising
sales;
- An increase in purchases of Web banner ads to promote our products and
services;
- An increase in purchases of traditional print and broadcast advertising in
each of the three years to promote our products and services; and
- An increase in distribution partners and related payments in 1999 and
2000.

We record an expense at the time the in-kind advertising and promotion is
provided by CBS under our agreement with CBS based on the rate card value of the
advertising. Noncash advertising expense relating to services provided by CBS
was $17.4 million, $14.0 million and $7.1 million for the years ended December
31, 2000, 1999 and 1998, respectively.

Sales and marketing expenses are expected to continue to decrease in absolute
dollars as we plan to leverage our direct sales organization and previous brand-building
strategy.

Amortization of Intangibles

In connection with the purchase of BigCharts, MarketWatch paid $157.5
million. Of the purchase price, $200,000 was for in-process research and
development, which was expensed in full upon completion of the acquisition in
June 1999, and $152.5 million and $3.6 million was allocated to goodwill and
intangibles, respectively. Goodwill is being amortized over three years, and
intangibles are being amortized over periods ranging from 1.5 to 3.5 years.

Interest Income (Expense)

Interest income of $2.3 million for the year ended December 31, 2000
resulted from income earned on the proceeds from our initial public offering in
January 1999, as well as the additional cash contributions by CBS and DBC in May
2000. Interest income of $1.4 million for the year ended December 31, 1999
resulted from income earned on the proceeds from our initial public offering in
January 1999. Interest expense of $159,000 for the year ended December 31, 1998
resulted from borrowings from DBC.

Loss of Joint Venture

We recorded 50% of the loss incurred by FTMarketWatch.com based on our
ownership in the joint venture. Our portion of the loss was $5.0 million for the
year ended December 31, 2000.

Liquidity and Capital Resources

Since inception, we have funded our operations primarily from cash
contributed and advanced by DBC and CBS, revenues from advertising and license
sales and the proceeds of our initial public offering. At December 31, 2000,
cash and cash equivalents totaled $45.4 million compared to $9.5 million at
December 31, 1999.

Cash used in operating activities was $12.6 million for the year ended
December 31, 2000. The cash used in 2000 was primarily due to a loss of $91.3
million, offset by noncash charges of $17.4 million in advertising provided by
CBS, $56.2 million in depreciation and amortization of property and equipment
and goodwill and intangibles, and the loss in joint venture of $5.0 million.
Significant uses of cash in operations for the year ended December 31, 2000
include costs associated with increased sales and marketing activities to
establish and promote our products and services, increase in headcount and
related expenses and an increase in accounts receivable, partially offset by an
increase in accounts payable and accrued expenses.

Cash used in operating activities was $19.1 million for the year ended
December 31, 1999. The cash used in 1999 was primarily due to a net loss of
$60.9 million, offset by noncash charges of $14.0 million for advertising
provided by CBS and $32.3 million in depreciation of property and equipment and
amortization of goodwill and intangibles. Significant uses of cash in operations
for the year ended December 31, 1999 include costs associated with increased
sales and marketing activities to establish and promote our products and
services and costs of directors, officers' insurance premiums incurred as a
result of becoming a public company, and an increase in accounts receivable,
partially offset by an increase in accounts payable and accrued expenses.

Cash used in operating activities was $4.4 million for the year ended
December 31, 1998. Significant uses of cash in operations for the year ended
December 31, 1998 include costs associated with increased sales and marketing
activities to establish and to promote our products and services and increased
accounts receivable and deferred offering costs, offset by accrued expenses for
the costs of our initial public offering.

Cash used in investing activities was $9.2 million for the year ended
December 31, 2000 and consisted primarily of sale of short-term investments, an
investment in our joint venture, and capital expenditures. Capital expenditures
have generally consisted of purchases of computer hardware and software and
leasehold improvements related to leased facilities. We have experienced a
substantial increase in capital expenditures and operating lease arrangements
since inception, which is consistent with increased staffing, and further
increases in capital expenditures are expected in the future.

Cash used in investing activities was $16.5 million for the year ended
December 31, 1999 and consisted primarily of the purchase of short-term
investments, the purchase of BigCharts and capital expenditures. The BigCharts
purchase included a cash payment of $6.0 million to stockholders and financial
advisors of BigCharts, and $1.5 million in acquisition costs.

Cash used in investing activities was $1.1 million for the year ended
December 31, 1998 and primarily reflects the purchase of property and equipment.

Cash provided by financing activities was $57.7 million for the year ended
December 31, 2000 and primarily reflected the proceeds from the additional
contribution from CBS and DBC. In May 2000, we issued 1,136,814 shares of the
Company's common stock to each of DBC for $43.0 million in cash and the same
number of shares to CBS for $13 million in cash and $30.0 million in rate card
advertising and promotion over the next two years.

Cash provided by financing activities was $45.0 million for the year ended
December 31, 1999 and primarily reflected the proceeds from the initial public
offering in January 1999 of 3,162,500 shares of common stock at $17 per share
with proceeds of $43.9 million, net of underwriting and offering expenses and
the repayment of amounts owed to DBC.

Cash provided by financing activities was $5.7 million for the year ended
December 31, 1998, which primarily reflected contributions and advances from
DBC.

As of December 31, 2000, commitments under noncancellable operating leases
totaled $15.2 million through December 31, 2009. In addition, we have entered
into certain agreements with Yahoo!, Inc. and America Online to make payments
for advertising and slotting over the next two years. We are also obligated to
pay Yahoo! a fee based on the amount of traffic directed to our Web site each
month through the expiration of the agreement. As of December 31, 2000, we are
committed to pay $3.8 million to AOL over the next two years and a minimum of
$1.5 million to Yahoo! in 2001. Under our joint venture agreement with the FT,
we have a commitment to continue funding our joint venture, FT Marketwatch.com,
up to an additional $5.8 million.

We believe our current cash position will be sufficient to meet our
anticipated needs for working capital and capital expenditures for at least the
next 12 months. We may need to raise funds sooner if we acquire any additional
businesses, products or technologies. If additional funds were raised through
the issuance of equity securities, the percentage ownership of our then-current
stockholders would be reduced. However, if CBS or Pearson elects to maintain its
percentage interest pursuant to the exercise of the purchase right under its
stockholders' agreements, then CBS or Pearson would not necessarily suffer a
reduction in its ownership. Furthermore, such equity securities might have
rights, preferences, or privileges senior to those of our common stock.

Item 7A. Quantitative and Qualitative Disclosures About
Market Risk

Interest rate sensitivity. The primary objective of
our investment activities is to preserve principal while maximizing the income
we receive from our investments without significantly increasing risk. Some of
the securities that we have invested in may be subject to market risk. This
means that a change in prevailing interest rates may cause the principal amount
of the investment to fluctuate. For example, if we hold a security that was
issued with a fixed interest rate at the then-prevailing rate and the prevailing
interest rate later rises, the principal amount of our investment will probably
decline. To minimize this risk, we maintain our portfolio of cash in money
market funds and short-term investments classified as "available for sale". In
general, money market funds and short-term investments are not subject to market
risk because the interest paid on such funds fluctuates with the prevailing
interest rate. As of December 31, 2000, all of our investments mature in less
than one year.

Exchange rate sensitivity. We consider our exposure to foreign
currency exchange rate fluctuations to be minimal, as we do not have any sales
denominated in foreign currencies. We have not engaged in any hedging or other
derivative transactions to date.

Item 8. Consolidated Financial Statements and
Supplementary Data

Index to Consolidated Financial Statements



|                                                                                                         | Page
|-------------------------------------------------------------------------------------------------------- | ----
|Report of Independent Accountants                                                                        | 41  
|Consolidated Balance Sheets as of December 31, 2000 and 1999                                             | 42  
|Consolidated Statements of Operations for the years ended
  
 December 31, 2000, 1999 and 1998           | 43  
|Consolidated Statements of Shareholders' Equity for the years
  
 ended December 31, 2000, 1999 and 1998 | 44  
|Consolidated Statements of Cash Flows for the years ended
  
 December 31, 2000, 1999 and 1998           | 45  
|Notes to Consolidated Financial Statements                                                               | 46  

---



REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of MarketWatch.com, Inc.

In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of MarketWatch.com, Inc. and its subsidiary at December 31, 2000 and
1999, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000 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 these 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 our opinion.





PricewaterhouseCoopers LLP
San Francisco, California
January 30, 2001

---

**MARKETWATCH.COM, INC.

                         CONSOLIDATED BALANCE SHEETS**
                          (in thousands, except share amounts)

`December 31,
                                                           ----------------------
                                                              2000        1999
                                                           ----------  ----------
                         ASSETS
Current assets:
  Cash and cash equivalents.............................. $   45,356  $    9,500
  Investments............................................          -       4,979
  Accounts receivable, net of allowances for bad
     debts of $628 and $280 at December 31, 2000
     and 1999, respectively..............................     11,838       8,073
  Prepaid expenses.......................................      2,497       3,699
                                                           ----------  ----------
          Total current assets...........................     59,691      26,251
Property and equipment, net..............................     10,846       5,035
Intangible assets........................................      1,129       2,683
Goodwill.................................................     72,010     122,840
Other assets.............................................        564          46
                                                           ----------  ----------
          Total assets................................... $  144,240  $  156,855
                                                           ==========  ==========

          LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable....................................... $    5,810  $    3,948
  Accrued expenses.......................................      4,825       3,415
  Deferred revenue.......................................        188         344
                                                           ----------  ----------
          Total current liabilities......................     10,823       7,707
                                                           ----------  ----------
Commitments (Note 6)

Stockholders' equity:
  Preferred stock, $.01 par value; 5,000,000 shares
     authorized; no shares issued and outstanding........          -           -
  Common stock, $.01 par value; 30,000,000 shares
     authorized; 16,541,403 shares and 13,926,677 shares
     issued and outstanding at December 31, 2000 and
     1999, respectively..................................        166         139
  Additional paid-in capital.............................    319,425     231,746
  Deferred compensation..................................          -        (413)
  Contribution receivable................................    (21,539)     (8,952)
  Accumulated deficit....................................   (164,635)    (73,372)
                                                           ----------  ----------
          Total stockholders' equity ....................    133,417     149,148
                                                           ----------  ----------
          Total liabilities and stockholders' equity..... $  144,240  $  156,855
                                                           ==========  ==========`

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

---

**MARKETWATCH.COM, INC.

                        CONSOLIDATED STATEMENTS OF OPERATIONS**
                          (in thousands, except share amounts)

`Years ended December 31,
                                          ----------------------------------
                                             2000        1999        1998
                                          ----------  ----------  ----------

Net revenues:
  Advertising........................... $   34,952  $   18,033  $    5,115
  Licensing.............................     15,809       5,262       1,285
  Other.................................      3,146       1,640         627
                                          ----------  ----------  ----------
       Total net revenues...............     53,907      24,935       7,027
Cost of net revenues....................     21,012       9,901       2,837
                                          ----------  ----------  ----------
       Gross profit.....................     32,895      15,034       4,190
                                          ----------  ----------  ----------
Operating expenses:
  Product development...................      8,725       4,762       1,468
  General and administrative............     14,211       8,948       3,429
  Sales and marketing...................     47,130      33,430      11,547
  Purchased in-process research
    and development.....................          -         200           -
  Amortization of goodwill
    and intangibles.....................     51,382      29,984           -
                                          ----------  ----------  ----------
       Total operating expenses.........    121,448      77,324      16,444
                                          ----------  ----------  ----------
          Loss from operations..........    (88,553)    (62,290)    (12,254)
   Interest income (expense), net.......      2,285       1,412        (159)
   Loss in joint venture................     (4,995)          -           -
Net loss................................ $  (91,263) $  (60,878) $  (12,413)
                                          ==========  ==========  ==========

Basic and diluted net loss per share.... $    (5.83) $    (4.68) $    (1.38)
                                          ==========  ==========  ==========
Shares used in the calculation of
  basic and diluted net loss per share..     15,659      13,004       9,000
                                          ==========  ==========  ==========`

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

---

**MARKETWATCH.COM, INC.

          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     (In thousands, except share data)**

`Common Stock
                                --------------------
                                                      Additional  Deferred   Contribu-    Accumu-
                                                       Paid-in     Compen-      tion       lated
                                  Shares     Amount    Capital     sation    Receivable   Deficit     Total
                                -----------  -------  ----------  ---------  ----------  ---------  ---------
Balance, December 31, 1997.....  9,000,000  $    90  $   51,925  $          $  (51,782) $     (81) $     152
Cash contribution received
  from DBC.....................                                                  1,782                 1,782
Issuance of compensatory
  stock options to employees...                           1,391     (1,391)
Amortization of deferred
  compensation.................                                        247                               247
Fair value of services
  provided by DBC..............                              50                                           50
Advertising received from CBS..                                                  7,052                 7,052
Net loss.......................                                                           (12,413)   (12,413)
                                -----------  -------  ----------  ---------  ----------  ---------  ---------
Balances, December 31, 1998....  9,000,000       90      53,366     (1,144)    (42,948)   (12,494)    (3,130)
Issuance of common stock,
  net of issuance costs,
  pursuant to the initial
  public offering..............  3,162,500       31      47,832                                       47,863
Issuance of common stock
  pursuant to the purchase
  of BigCharts.................  1,589,138       16     149,539                                      149,555
Issuance of common stock
  upon exercise of options.....    175,039        2         830                                          832
Amortization of deferred
  compensation.................                                        621                               621
Compensation and other
  expenses related to
  option grants................                             179        110                               289
Reduction in CBS advertising
  contribution.................                         (20,000)                20,000
Advertising received from CBS..                                                 13,996                13,996
Net loss.......................                                                           (60,878)   (60,878)
                                -----------  -------  ----------  ---------  ----------  ---------  ---------
Balances, December 31, 1999.... 13,926,677      139     231,746       (413)     (8,952)   (73,372)   149,148
Issuance of common stock
  upon exercise of  options....    341,098        3       1,702                                        1,705
Amortization of deferred
  compensation.................                                         43                                43
Compensation and other
  expenses related to
  option grants................                                        370                               370
Issuance of shares to DBC......  1,136,814       12      42,988                                       43,000
Issuance of shares to CBS......    341,044        4      12,997                                       13,001
Capital contribution receivable
  from CBS.....................    795,770        8      29,992                (30,000)
Advertising received from CBS..                                                 17,413                17,413
Net loss.......................                                                           (91,263)   (91,263)
                                -----------  -------  ----------  ---------  ----------  ---------  ---------
Balances, December 31, 2000.... 16,541,403  $   166  $  319,425  $       -  $  (21,539) $(164,635) $ 133,417
                                ===========  =======  ==========  =========  ==========  =========  =========`

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

---

**MARKETWATCH.COM, INC.

                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                     (in thousands)**

`Years ended December 31,
                                                   ----------------------------
                                                     2000      1999      1998
                                                   --------  --------  --------
Cash flows used in  operating activities:
  Net loss....................................... $(91,263) $(60,878) $(12,413)
  Adjustments to reconcile net loss to net
   cash used in operating activities:
     Provision for bad debt......................    1,046       280       216
     Depreciation and amortization...............   56,196    32,287       470
     Loss in joint venture.......................    4,995         -         -
     Noncash charges from stockholders...........   17,413    13,996     7,102
     In process research and
       development write off.....................        -       200         -
     Changes in operating assets
      and liabilities:
       Accounts receivable.......................   (4,811)   (6,064)   (1,578)
       Prepaid expenses and other
          assets.................................      684    (3,641)      (13)
       Deferred offering costs...................        -         -    (1,816)
       Accounts payable and
          accrued expenses.......................    3,272     4,470     3,583
       Deferred revenue..........................     (156)      215         4
                                                   --------  --------  --------
          Net cash used in operating activities..  (12,624)  (19,135)   (4,445)
                                                   --------  --------  --------

Cash flows used in investing activities:
  Purchase of short-term investments.............        -   (15,248)        -
  Sale of short-term investments.................    4,979    10,269         -
  Purchase of property and equipment.............   (9,210)   (4,022)   (1,143)
  Acquisition of business, net
     of cash acquired............................        -    (7,476)        -
  Investment in joint venture....................   (4,995)        -         -
                                                   --------  --------  --------
          Net cash used in investing activities..   (9,226)  (16,477)   (1,143)
                                                   --------  --------  --------

Cash flows provided by financing activities:
  Issuance of common stock.......................   57,706    48,918         -
  Contributions from DBC.........................        -         -     1,782
  Advances from DBC..............................        -    (3,946)    3,946
                                                   --------  --------  --------
    Net cash provided by financing activities....   57,706    44,972     5,728
                                                   --------  --------  --------
Net change in cash...............................   35,856     9,360       140
Cash and cash equivalents,
  at beginning of period.........................    9,500       140         -
                                                   --------  --------  --------
Cash and cash equivalents, at end of period...... $ 45,356  $  9,500  $    140
                                                   ========  ========  ========`

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

---

**MARKETWATCH.COM, INC.
                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

Note 1 - Organization and Nature of Business

The Company

MarketWatch.com, Inc. (the "Company"), a leading Web-based provider of
comprehensive, real-time, business news, financial programming and analytic
tools, was formed on October 29, 1997 in the state of Delaware as a limited
liability company and was jointly owned by Data Broadcasting Corporation ("DBC")
and CBS Broadcasting Inc. ("CBS") (collectively, the "Members"), with each
member owning a 50% interest in the Company.

In connection with the formation of the limited liability company, the
Company, CBS and DBC entered into a contribution agreement (the "Contribution
Agreement"), under which DBC contributed to the Company $218,000 in cash upon
consummation of the Contribution Agreement, $1.8 million in cash in 1998 and
DBC's existing "Online/News" business, which primarily consisted of customer
contracts and intellectual property, in return for its ownership interest. CBS
agreed to provide $50.0 million of rate card amount advertising and promotions
over a period of five years in return for its ownership interest. Under the
terms of the Stockholders' Agreement, the $50.0 million rate card amount was
revised to $30.0 million upon completion of our initial public offering (see
Note 3).

In addition, CBS and the Company entered into a license agreement dated
October 29, 1997 (the "License Agreement") where CBS, in exchange for a royalty
of 30% of net advertising revenue, as defined, granted to the Company the non-
exclusive right and license to use certain CBS news content and registered
trademarks, including the CBS "Eye" design, for five years ending October 29,
2002, subject to termination on the occurrence of certain events. In addition to
the agreements above, the Company entered into a services agreement with DBC
(the "Services Agreement"). Under the terms of the Services Agreement, DBC
charges the Company for certain general services, the Company receives payment
from DBC for supplying news and the Company receives a fee for licensing
MarketWatch RT and MarketWatch Live. Under the terms of the amended and restated
license agreement, the 30% royalty was decreased to 8% (see note 3).

In January 1999, the Company completed an initial public offering ("IPO") of
3,162,500 shares of common stock at $17.00 per share. Total proceeds to the
Company were approximately $47.8 million, net of offering costs. Immediately
prior to the completion of the IPO, the Company was reorganized from a limited
liability company to a corporation. All share and per share data have been
retroactively adjusted to reflect the reorganization.

Effective June 9, 1999, the Company completed its acquisition of
BigCharts.com, Inc. ("BigCharts"), a Minnesota corporation, for $6.0 million in
cash, $110.9 million worth of MarketWatch common stock, and $38.6 million worth
of options to purchase MarketWatch common stock which are issuable upon exercise
of options to purchase BigCharts common stock assumed in the merger. BigCharts
is a leading provider of licensed online financial charting content to
electronic brokers, financial publishers and portals. The transaction was
accounted for using the purchase method; accordingly, the purchase price was
allocated to the assets acquired and liabilities assumed based on their fair
market values at the date of acquisition.

On January 6, 2000, the Company entered into a joint venture agreement with
the Financial Times Group, a part of Pearson plc, to establish Financial Times
Marketwatch.com (Europe) Limited, an internet provider of real time business
news, financial programming and analytical tools. Under the agreement, the
Company licensed its trademark and technology to the joint venture, contributed
certain domain names and 500,000 pounds sterling in exchange for 500,000 shares
of the joint venture. The Financial Times contributes trademarks for an ongoing
royalty fee, provides 15.0 million pounds sterling worth of rate card
advertising over five years and contributed 500,000 pounds sterling in cash for
500,000 shares in the joint venture. The Company contributed an additional $3.1
million in July, 2000 and $1.1 million in October, 2000 to the joint venture.
The total contribution to the joint venture in the year ended December 31, 2000
was $5.0 million.

On May 5, 2000, the Company issued 1,136,814 shares of the Company's common
stock to each of DBC for $43.0 million in cash and the same number of shares to
CBS for $13.0 million in cash and $30.0 million in rate card advertising and
promotion over the next two years.

In January 2001, Pearson Overseas Holding Ltd., an affiliate of Pearson plc,
a British media company, acquired Data Broadcasting Corporation's 34.1 % stake
in MarketWatch.com, Inc.

Accounting for the Initial Capitalization of the Company

The Company has recorded DBC's equity contributions under the
Contribution Agreement at the value of the cash contributed. DBC's contribution
of the intellectual property of the Online/News business has been recorded at
its historical carrying amount, which was zero. DBC contributed none of the
tangible assets or liabilities of the Online/News business; only intellectual
property. The Company recorded the contribution of the Online/News business at
its historical carrying amount since the fair value of the business was not
objectively determinable by a corresponding contribution of monetary assets by
CBS (See Note 3).

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation



The consolidated financial statements include the accounts of
MarketWatch.com, Inc. and its majority-owned subsidiary. All significant
intercompany accounts and transactions have been eliminated. Investments in
entities in which the Company can exercise significant influence, but are less
than majority-owned and are not otherwise controlled by the Company, are
accounted for under the equity method.

The Company operates in one segment.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect amounts reported in the financial statements. Actual results could differ
from those estimates.

Revenue Recognition

The Company generates its net revenues from three primary sources: the
sale of advertising on the Company's Web sites; the license of content; and
other revenues including television, radio, and subscription products.

Advertising revenue, derived from the sale of advertisements and sponsorships
on the Company's Web sites, is recognized using the lesser of the ratio of
impressions delivered over total guaranteed impressions or on a straight line
basis over the term of the contract in the period the advertising is displayed,
provided that no significant Company obligations remain and collection of the
resulting receivable is probable. Company obligations typically include
guarantees of a minimum number of "impressions" or times that an advertisement
is viewed by users of the Company's Web sites. Additionally, certain sponsorship
agreements provide links to third-party Web sites and generate either fixed
transaction fees for monthly access or variable fees, which are dependent upon
the number of transactions consummated at the third-party Web site by linked
customers. Such amounts are recognized as revenue in the month earned.

Licensing revenues consist of revenue earned from the licensing of
MarketWatch content and tools. License revenues consists of fixed monthly
amounts related to the license of charting technology and news content that are
recognized ratably over the term of the licensing agreement or amounts based on
the number of third-party Web site subscribers that use the service each month.

Other revenues consist of revenue from our television and radio shows and
subscription revenues. The Company produces a weekend television program for
distribution on CBS affiliates and daily radio broadcasts for distribution by
Westwood One Radio Network. The Company shares in the revenue earned through the
sale by CBS sales forces of advertising space during its television programming.
Revenue for the television program is recognized as the shows are aired and
revenue is earned. Revenue for the radio show is recognized monthly as
advertisements are run and earned. Subscription revenue relates to customer
subscriptions to the DBC online services, MarketWatch RT and MarketWatch Live,
which provide subscribers access to real-time exchange data and analytical
products and are sold through the Company's Web sites. Revenue from
subscriptions is recognized ratably over the subscription period. Deferred
revenues relate to subscription fees for which amounts have been collected but
for which revenue has not been recognized and prepayments of license and
advertising contracts.

Revenues from barter transactions, in accordance with the provisions of
Accounting Principles Board Opinion No. 29 ("APB 29"), are recognized during the
period in which the advertisements are displayed on the Company's Web sites.
Under the provisions of APB 29, barter transactions are recorded at the fair
value of the goods or services received. For the year ended December 31, 2000,
the company recognized $508,000 in barter revenue. No barter revenue was
recorded in calendar years 1999 and 1998.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

Short-Term Investments

The Company classifies all investments in accordance with Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities", which requires investment securities to be
classified as either held to maturity, trading or available-for-sale. As of
December 31, 1999, the Company's short- term investments consisted of commercial
paper of $5.0 million, were classified as available for sale and stated at
amortized cost, which approximates fair market value. Contractual maturities of
the Company's short-term investments are generally one year or less.

Property and Equipment

Property and equipment is recorded at cost and depreciated using the
straight-line method over its estimated useful life, ranging from three to five
years. Leasehold improvements are amortized using the straight-line method over
the shorter of their useful lives or the remaining lease term. Depreciation
expense for the years ended December 31, 2000, 1999 and 1998 was $3.3 million,
$1.4 million and $280,000.

Intangible Assets and Goodwill

Goodwill and intangibles are amortized using the strait-line method.
Goodwill is being amortized over three years, and intangibles are being
amortized over periods ranging from 1.5 to 3.5 years.

The Company assesses the recoverability of its long term assets by comparing
the projected undiscounted net cash flows associated with those assets against
their respective carrying amounts. Impairment, if any, is based on the excess of
the carrying amount over the fair value of those assets. If it became probable
that the projected future undiscounted cash flows of acquired assets were less
than the carrying value of the goodwill, we would recognize an impairment loss
in accordance with the provision of Statement of Financial Accounting Standards
No. 121, "Accounting for Impairment of Long Lived Assets and for Long Lived
Assets to be Disposed of". In addition, if the analysis warranted revised
estimated useful lives, the Company would adjust the lives of the assets in
accordance with Accounting Principles Board Opinion No.17, "Intangible Assets".
No impairment has been identified to date.

Net Loss per Share

The Company computes net loss per share in accordance with the provisions
of Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS 128") and SEC Staff Accounting Bulletin No. 98 ("SAB 98"). Under the
provisions of SFAS 128 and SAB 98, basic and diluted net loss per share is
computed by dividing the net loss available to common stockholders for the
period by the weighted average number of common shares outstanding for the
period. The calculation of diluted net loss per share excludes all shares of
common stock issuable upon exercise of employee stock options as the effect of
the exercise would be antidilutive.

Options to purchase 3,033,537, 1,892,826 and 863,500 shares of common stock
were outstanding at December 31, 2000, 1999 and 1998, respectively, but were not
included in the computation of diluted net loss per share because inclusion of
such options would have been anti-dilutive.

Product Development Costs

Costs attributable to the development of new products are expensed as
incurred. The Company develops software that enables users to access information
on its Web sites and subscription services. Development costs incurred prior to
technological feasibility were expensed as incurred. Costs eligible for
capitalization have been immaterial for all periods presented.

Promotion and Advertising

Advertising costs are expensed as incurred. Promotion and advertising
provided by CBS under the Contribution Agreement are recognized as an expense
during the period in which the services are provided based on the rate card
value of such services (See Notes 3 and 8).

Income Taxes

Income taxes are computed using the asset and liability method. Under the
asset and liability method, deferred income tax assets and liabilities are
determined based on the differences between the financial reporting and tax
bases of assets and liabilities and are measured using the currently enacted tax
rates and laws. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to a
significant concentration of credit risk consist primarily of cash and cash
equivalents and accounts receivable. Management deposits its cash with three
financial institutions. Management periodically performs credit evaluations of
its customers' financial condition and generally does not require collateral on
accounts receivable. A significant portion of of the Company's accounts
receivable are derived from Internet-related businesses. As of December 31,
2000, none of our customers accounted for 10% or more of our gross accounts
receivable. As of December 31, 1999, one customer comprised 11% of the gross
accounts receivable balance. The fair value of accounts receivable approximates
cost due to their short-term nature.



Comprehensive Income

Effective January 1, 1998, the Company adopted the provisions of SFAS No.
130, "Reporting Comprehensive Income," which 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. During each of the three years in the period ended
December 31, 2000, the Company has not had any significant transactions that are
required to be reported in comprehensive income.

Stock-Based Compensation

The Company accounts for its stock-based employee compensation agreements
in accordance with the provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" and complies with the disclosure
provisions of Statement of Financial Accounting Standards No. 123 ("SFAS No.
123"), "Accounting for Stock Based Compensation." In accounting for stock-based
transactions with non-employees, the Company records compensation expense in
accordance with SFAS No. 123 and Emerging Issues Task Force 96-18, "Accounting
for Equity Instruments That are Issued to Other Than Employees for Acquiring, or
in Conjunction with Selling, Goods or Services".

Recently Issued Accounting Pronouncements

In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements." SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
The Company was required to adopt SAB 101 in the year ended December 31, 2000.
The adoption of SAB 101 did not have a material effect on the Company's results
of operations or financial position.

In April 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44 ("FIN 44"), "Accounting for Certain Transactions Involving
Stock Compensation", an interpretation of APB Opinion No. 25. FIN 44 is
generally effective for transactions occurring after July 1, 2000. The
application of FIN 44 did not have a material effect on the Company's results of
operations or financial position.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities", subsequently amended by SFAS 137 and SFAS
138. SFAS 133 establishes accounting and reporting standards for derivative
instruments and for hedging activities. The Company will adopt SFAS 133 in the
first quarter of 2001 and does not
expect the adoption to have a material effect on its results of operations or
financial position.



Note 3 - Agreements with CBS and DBC

In January 1999, the Company entered into a Stockholders' Agreement
("Stockholders' Agreement"), under which CBS reduced the advertising commitment
from the Contribution Agreement to an aggregate rate card amount of $30.0
million in return for a change in the royalty rate payable under the License
Agreement, extension of the License Agreement to 2005 and modification to
certain non-competition provisions. Additionally, both CBS and Pearson will have
a right of first refusal in the event either party desires to sell any
securities of the Company to a third party or if the Company issues new
securities.

In addition, the Company and CBS entered into an Amended and Restated License
Agreement (the "Amended and Restated License") that superseded and replaced the
License Agreement and became effective immediately prior to the IPO. Under the
Amended and Restated License, in return for the right to use the CBS name and
logo as well as the CBS Television Network news content, the Company is
obligated to pay a royalty to CBS of: (i) during 1999: (a) 8% of Gross Revenues
in excess of $500,000 and up to and including $50.5 million and (b) 6% of Gross
Revenues in excess of $50.5 million; and (ii) in subsequent years through the
termination of the license agreement on October 29, 2005: (a) 8% of Gross
Revenues up to and including $50.0 million and (b) 6% of Gross Revenues in
excess of $50.0 million.

CBS has the right to terminate the agreement in certain circumstances,
including breach of a material term or condition of the agreement, insolvency,
bankruptcy or other similar proceeding, discontinuance of use of the MarketWatch
logo without providing an acceptable substitute, or acquisition or issuance of
certain percentages of the Company's common stock or voting power by or to a CBS
competitor. In addition, CBS has retained significant editorial control over the
use and presentation of the CBS news content and the CBS logo and has the
ability to prevent the Company from displaying certain types of content, which
are unacceptable to CBS.

Gross Revenues means gross operating revenues that are derived from an
Internet service or Web site that provides information or services of a
financial nature or uses the CBS trademarks licensed to the Company.

Gross Revenues excludes revenues from DBC, an amount equal to certain
commissions paid to sales representatives and an amount equal to certain
revenues attributable to an acquired company's results of operations for the 12
months prior to the acquisition.

The terms of the Amended and Restated License do not prohibit CBS from
licensing its name and logo to another Web site or Internet service that does
not have as its primary function and its principal theme and format the
delivering of comprehensive real-time or delayed stock market quotations and
financial news in the English language to consumers. CBS is also not prohibited
from licensing its news content to, or investing in, another Web site or
Internet service.

In January 1999, the Company and DBC entered into an Amended and Restated
Services Agreement (the "Amended Services Agreement"), which superseded and
replaced the Services Agreement. Under the Amended Services Agreement, DBC
provides the Company with hosting services, software programming assistance,
data feeds, communications lines, office space and related facilities, network
operations and Web site management services, as well as certain administrative
and engineering services if requested by the Company. The Amended Services
Agreement provides for DBC to grant the Company certain nonexclusive licenses to
its data and information feeds and provides for certain network Web site hosting
performance standards. DBC also pays the Company a monthly per subscriber fee
ranging from $2.50 to $5.00, subject to a monthly minimum of $100,000 through
October 2002, for delivery of the Company's news to all DBC subscribers, as
defined. The Company is also required to pay DBC 25% and 75% of subscription
revenues for MarketWatch RT(TM) and MarketWatch Live(TM), respectively. The term
of the Amended Services Agreement will expire on October 29, 2005.

In January 1999, the Company, CBS and DBC entered into a Registration Rights
Agreement ("Registration Agreement"). CBS and DBC, and their affiliates and
permitted transferees were given certain registration rights for the securities
of the Company held by them under the Registration Agreement.

As described above, CBS has committed to provide advertising and promotions
over a five-year period in return for its ownership position. The Company had
recorded the $50.0 million commitment by CBS as a contribution receivable and
reduced the receivable and recorded an expense based on the rate card amount of
the advertising and promotion during the period provided. Under the terms of the
Stockholders' Agreement, the Company recorded a $20.0 million reduction to the
contribution receivable and additional paid-in capital upon completion of the
IPO.

In January 2001, Pearson, Overseas Holding Ltd. acquired Data Broadcasting
Corporation's 34.1 % stake in MarketWatch.com, Inc.

Note 4 - Balance Sheet Components

Allowance for bad debts was as follows (in thousands):

`Years ended
                                                     December 31,
                                               ------------------------
                                                  2000         1999
                                               -----------  -----------
Balance at beginning of period............... $       280  $       226
Charged to expenses..........................       1,046          280
Write-offs, net of recoveries................        (698)        (226)
                                               -----------  -----------
Balance at end of period..................... $       628  $       280
                                               ===========  ===========`

Prepaid expenses were as follows (in thousands):

`December 31,
                                               ------------------------
                                                  2000         1999
                                               -----------  -----------
Prepaid marketing............................ $     2,117  $     3,045
Other........................................         380          654
                                               -----------  -----------
                                              $     2,497  $     3,699
                                               ===========  ===========`

Property and equipment, net, consisted of the following (in thousands):

`December 31,
                                               ------------------------
                                                  2000         1999
                                               -----------  -----------
Computers and equipment...................... $    10,555  $     5,066
Leasehold improvements.......................       3,858          762
Furniture and fixtures.......................       1,412          787
                                               -----------  -----------
                                                   15,825        6,615
Less accumulated depreciation and
  amortization...............................      (4,979)      (1,580)
                                               -----------  -----------
       Total property and equipment, net..... $    10,846  $     5,035
                                               ===========  ===========`

Accrued expenses and other liabilities were as follows (in thousands):

`December 31,
                                               ------------------------
                                                  2000         1999
                                               -----------  -----------
Accrued television production................ $       494  $       509
Accrued royalty..............................       1,176          492
Accrued compensation.........................       2,809        1,746
Accrued other................................         346          668
                                               -----------  -----------
                                              $     4,825  $     3,415
                                               ===========  ===========`

Note 5 - Income Taxes

At December 31, 2000, the Company had federal and state net operating
loss carry forwards of approximately $77.2 million and $59.2 million,
respectively, available to offset future regular and alternative minimum taxable
income. The Company's net operating loss carry forwards expire on various dates
after the year 2001, if not utilized. The availability of net operating losses
to offset future taxable income may be limited as a result of ownership changes
in 1999 and earlier years. The amount of such limitation, if any, has not been
determined.

The components of the net deferred tax assets and liabilities are presented
below (in thousands):

`December 31,
                                               ------------------------
                                                  2000         1999
                                               -----------  -----------
Deferred tax assets:
Net operating loss carryforwards............. $    29,695  $    14,720
Accruals and reserves........................         443          205
Property and equipment.......................       1,281        1,402
                                               -----------  -----------
      Total deferred tax assets..............      31,419       16,327
Valuation allowance..........................     (30,970)     (15,225)
                                               -----------  -----------
      Deferred tax assets....................         449        1,102
                                               -----------  -----------
Deferred tax liabilities:
Intangible assets............................        (449)      (1,069)
Other........................................                      (33)
                                               -----------  -----------
      Total deferred tax liabilities.........        (449)      (1,102)
                                               -----------  -----------
Net deferred tax asset....................... $         -  $         -
                                               ===========  ===========`

Due to the uncertainty surrounding the realization of the favorable tax
attributes in future tax returns, the Company has placed a valuation allowance
against its deferred tax asset. The valuation allowance for the period ended
December 31, 2000 increased by $15.7 million.

The difference between the income tax benefit at the statutory rate of 34%
and the company's effective tax rate is due primarily to the valuation allowance
established to offset the deferred tax assets. The provision for income tax is
different than the amount computed using the applicable statutory federal income
tax rate with the difference for the years summarized below:

`Years ended
                                                       December 31,
                                               ------------------------
                                                  2000         1999
                                               -----------  -----------
Provision computed at federal statutory rate.      (34.00)%     (34.00)%
State taxes, net of federal benefit..........       (4.68)       (5.85)
Amortization of goodwill.....................       22.19        19.41
Other permanent differences..................       (0.68)        0.22
Other........................................           -        (0.18)
Valuation allowance..........................       17.17        20.40
                                               -----------  -----------
Provision for income taxes...................           - %          - %
                                               ===========  ===========`

Note 6 - Commitments and Contingencies

Leases

Beginning in April 1998, the Company subleases office space from CBS for
its corporate headquarters in San Francisco, California; in New York City; and
in Washington DC through 2008. In addition, the Company subleases space in
Minneapolis, Minnesota. Rent expense under the lease properties was $744,000,
$675,000 and $137,000 for the years ended December 31, 2000, 1999 and 1998,
respectively. Future annual minimum lease payments under the leases were as
follows (in thousands):

`Year ending December 31,
   2001.................................................. $ 1,814
   2002..................................................   1,829
   2003..................................................   1,883
   2004..................................................   1,868
   2005..................................................   1,926
   Thereafter............................................   5,895
                                                           -------
                                                          $15,215
                                                           =======`

Commitments

The Company has entered into employment agreements with four of its
officers. These agreements expire through June 2002. Such agreements provide for
minimum annual salary levels ranging from $120,000 to $270,000, as well as
annual bonuses of up to 50% of the base salary.

During August 1998, the Company entered into a license agreement with Yahoo!
Inc. whereby the Company was required to provide news headlines, make payments
for advertising and slotting and remit referral fees monthly based on the number
of click-throughs to the Company's Web site. Payments under the agreement for
advertising were expensed in the period in which the advertising was provided.
Payments for slotting fees were recognized ratably over the term of the
agreement. Payments for referral fees were expensed in the month incurred. In
January 2001, the agreement was amended to include advertising and slotting fees
of $1.5 million over a twelve-month period beginning January 1, 2001.

In September 1999, the Company entered into a three-year distribution
agreement with America Online, Inc. ("AOL") to be AOL's premiere provider of
business and financial news for AOL's network including AOL's proprietary
service, AOL.com, CompuServe and Netscape (collectively, "AOL Members"). Under
the agreement, the Company created a co-branded site that enables AOL Members to
access MarketWatch.com content and investment management tools through the AOL
portal. The Company and AOL have also agreed to collaborate in sales and
marketing efforts. As of January 1, 2001, the Company is committed to paying
$3.8 million to AOL over the next two years in fulfillment of the agreement.

Under the Company's joint venture agreement with the Financial Times Group,
it has a commitment to continue funding our joint venture, Financial Times
Marketwatch.com, up to an additional $5.8 million.

The Company maintains agreements with independent content providers for
certain news, stock quotes and other information. The terms of these agreements
are generally one year, with optional extension periods ranging from one to
three years.

Contingencies

From time to time the Company is subject to legal proceedings and claims
in the ordinary course of business. The Company is not currently aware of any
legal proceedings or claims that will have a material adverse effect on the
Company's financial position or results of operations.

Note 7 - Employee Benefit Plans

401K

The Company has a 401(k) deferred savings plan covering substantially
all employees. Employee contributions are matched 33% by the Company, up to a
maximum of $2,500 per employee per year for all prior periods. Matching
contributions by the Company in 2000, 1999 and 1998 were approximately $327,000,
$180,000 and $31,000, respectively.

Employee Stock Purchase Plan

Effective August 15, 2000, the Company's Board of Directors adopted
the Employee Stock Purchase Plan (the "Purchase Plan"), which provides for the
issuance of a maximum of 500,000 shares of Common Stock. Eligible employees can
have up to 15% of their earnings withheld, up to certain maximums, to be used to
purchase shares of the Company's common stock on every February 15th and
August 15th. The price of the common stock purchased under the Purchase
Plan will be equal to 85% of the lower of the fair market value of the common
stock on the commencement date of each six month offering period or the
specified purchase date. In addition, on each January 1, the aggregate number of
shares of the Company's common stock reserved for issuance under the Plan shall
be increased automatically by a number of shares purchased under the Plan in the
preceding calendar year, provided that the Board may in its sole discretion
reduce the amount of the increase in any particular year.No
shares were purchased during 2000 and 500,000 shares were available under the
Purchase Plan for future issuance.

Stock Option Plans

The Members and the management committee of the LLC authorized options to
purchase membership interests in the Company to be granted to employees of the
Company. The management committee of the LLC granted options at the fair market
value of the membership interest as determined by the management committee of
the LLC on the date of grant.

In determining the fair market value of the membership interest on each grant
date, the management committee of the LLC considered, among other things, the
value of assets contributed to the Company from DBC, the Company's absolute and
relative level of revenues and other operating results, the state of the
Company's Web site development, the absence of a public trading market for the
Company's securities, the intensely competitive nature of the Company's market
and the appreciation of stock values of a number of generally comparable
Internet companies.

Each option converted into an option to purchase the equivalent percentage of
common stock upon the reorganization of the limited liability company into a
corporation, as discussed in Note 1. The converted options became part of the
1998 Equity Incentive Plan (the "1998 Plan"). In September 1998, the Board of
Directors adopted, subject to stockholder approval, the 1998 Plan and the 1998
Directors' Stock Option Plan (the "1998 Directors' Plan"). The 1998 Plan and
1998 Directors' Plan became effective upon the completion of the Company's IPO.
To date, the Company has reserved an aggregate of 3.1 million shares for
issuance under both plans.

The Plans allow for the issuance of incentive stock options and non-qualified
stock options. The stated exercise price of all options granted are not less
than 100% of the fair market value on the date of grant. Options are generally
granted for a term of ten years and vest one third after each year of service
over a three year period.

Pursuant to the consummation of the acquisition of BigCharts, Inc. during
1999, the Company assumed the BigCharts, Inc. 1995 Stock Plan (the "BigCharts
Plan"). Options issued become exercisable over varying periods as provided in
the individual plan agreements. BigCharts issued 585,824 shares under the
Plan.

In the calendar year 2000, the Board of Directors reserved an additional
1,500,000 shares for issuance under the 1998 Plan.

The following summarizes the activity in the Company's stock option
plans:

`Weighted
                                                           Average
                                              Options     Exercise
                                             Outstanding    Price
                                             ----------  -----------
Options outstanding, December 31, 1997.....    446,250  $      4.09
Options granted at fair value..............    231,500        10.64
Options granted below fair value...........    198,000         5.87
Options cancelled..........................    (12,250)        4.41
                                             ----------
Options outstanding, December 31, 1998.....    863,500         6.25
Options granted at fair value..............    777,111        44.94
Options assumed from BigCharts purchase....    585,824         6.92
Options cancelled..........................   (155,536)       23.12
Options exercised..........................   (178,073)        5.51
                                             ----------
Options outstanding, December 31, 1999.....  1,892,826        21.11
Options granted at fair value..............  1,668,172        20.80
Options cancelled..........................   (335,029)       35.68
Options exercised..........................   (342,432)        5.02
                                             ----------
Options outstanding, December 31, 2000.....  2,883,537  $     21.31`

At December 31, 2000, 1999 and 1998, 258,913, 114,925 and 636,500 options
were available for future grant, respectively, and 806,432, 747,370 and 144,690
options were exercisable, respectively. The weighted average exercise price and
weighted average remaining contractual life of the vested options are $13.18 and
8.62 years, respectively, at December 31, 2000, $5.73 and 8.57 years,
respectively, at December 31, 1999 and $4.00 and 8.43 years, respectively, at
December 31, 1998.

For the years ended December 31, 2000, 1999 and 1998, the Company expensed
$43,000, $621,000 and $247,000, respectively, of deferred compensation
representing the difference between the deemed fair value by the Company's Board
of Directors of the Common Stock on the date of grant and the option exercise
price on the date of grant. Deferred compensation is amortized over the three
year vesting period of the options.

The following table summarizes information about options at December 31,
2000:

`Options Outstanding           Options Exercisable
                      ----------------------------------  -----------------------
                                   Weighted
                                    Average    Weighted                 Weighted
                        Number     Remaining    Average                  Average
                         Out-     Contractual  Exercise     Number      Exercise
   Exercise Price      standing      Life        Price    Exercisable     Price
--------------------  ----------  -----------  ---------  ----------    ---------
$ 1.32 - $ 4.00.....    476,278         6.67  $    3.40     420,063   $     3.54
$ 4.03 - $ 4.19.....    508,460         9.82       4.05           -            -
$ 4.31 - $ 21.25. ..    662,806         8.41      10.83     248,782        10.12
$ 21.31 - $ 39.75...    678,122         9.15      32.83      51,829        35.22
$ 39.88 - $ 90.88...    557,871         8.79      50.76      85,758        55.94
                      ----------                          ----------
                      2,883,537         8.62  $   21.31     806,432   $    13.18
                      ==========                          ==========`

For the year ended December 31, 1999, 150,000 options were issued outside of
the option plans, none of which were exercisable at December 31, 1999. As of
December 31, 2000, 50,000 of the options issued outside the plans were
exercisable. In addition, the Company also recorded amortization expense of
$370,000 and $229,000 for the years ended December 31, 2000 and 1999,
respectively, in connection with stock options issued for services. For the year
ended December 31, 2000, the Company estimated the fair value of options issued
for services using the Black-Scholes option pricing model using the following
assumptions: no dividend yield, weighted average expected option term of 10
years, risk free interest rate of 4.94%, and an expected volatility factor of
97%.

Fair Value Disclosures

The Company applies APB No. 25 and related interpretations in accounting
for its stock option plans. Had the Company's stock-based compensation cost been
determined based on the minimum value at the grant date for awards under the
method prescribed by SFAS No. 123, the Company's net loss would have been
increased to the pro forma amounts indicated below (in thousands, except per
share data):

`Years ended December 31,
                                  -----------------------------------
                                     2000        1999         1998
                                  ----------  -----------  ----------
Net loss:
  As reported................... $  (91,263) $   (60,878) $  (12,413)
                                  ==========  ===========  ==========

  Pro forma..................... $ (105,072) $   (66,913) $  (13,289)
                                  ==========  ===========  ==========
Net loss per share:
  As reported................... $    (5.83) $     (4.68) $    (1.38)
                                  ==========  ===========  ==========

  Pro forma..................... $    (6.71) $     (5.15) $    (1.48)
                                  ==========  ===========  ==========`

Prior to the Company's initial public offering, the Company calculated the
value of each option grant using the minimum value method with the following
assumptions: no dividend yield, weighted average expected option term of 10
years; risk free interest rates of 5.5% and 5.8% for the year ended December 31,
1998 and expected volatility factor of 72%.

Subsequent to the offering, the fair value was determined using the Black-
Scholes model with the following assumptions for the years ended December 31,
2000 and December 31, 1999: no dividend yield, weighted average expected option
term of four years, risk free interest rates of 4.2% to 6.5% and an expected
volatility factor of 108% and 97% respectively.

According to the Black-Scholes option-pricing model, the weighted average
estimated fair value of employee stock option grants during 2000, 1999 and 1998
was $15.66, $31.19 and $7.43 per share, respectively.

Because additional stock options are expected to be granted each year, the
above pro forma disclosures are not representative of pro forma effects on
reported financial results for future years.

Note 8 - Related Party Transactions

Under its license agreement with CBS, the Company expensed $3.8 million,
$1.3 million and $307,000 for the years ended December 31, 2000, 1999 and 1998,
respectively, related to licensing of CBS news content and trademarks. In
addition, the Company has recorded advertising expenses of $17.4 million, $14.0
million and $7.1 million at rate card value for the years ended December 31,
2000, 1999 and 1998, respectively, for advertising and promotion provided by
CBS. Rental payments to CBS for leasing of certain facilities were $559,000,
$338,000 and $0 for the years ended December 31, 2000, 1999 and 1998,
respectively.

Licensing revenues from DBC were $2.7 million, $1.6 million and $1.3 million
for the three year ended December 31, 2000, 1999 and 1998, respectively. In
addition, the Company recognized revenue of $1.9 million, $854,000, and $0 for
the years ended December 31, 2000, 1999 and 1998, respectively, from television
programming on CBS stations, and costs to CBS of $1.2 million, $509,000 and $0
for the years ended December 31, 2000, 1999 and 1998, respectively, for
production of the television programming.

DBC purchased $297,500, $435,000, and $0 for the years ended December 31,
2000, 1999 and 1998, respectively, of advertising under an insertion order.
Direct charges for subscription revenues for certain DBC data feeds were
$262,000, $227,000 and $158,000 for the years ended December 31, 2000, 1999 and
1998, respectively. Under the terms of the Amended and Restated Services
Agreement, DBC agreed to provide the Company with certain general services
including accounting, network operations, hosting of the Company's Web pages and
data feeds. Allocated charges for these services totaled $735,000, $1.6 million
and $755,000 for the years ended December 31, 2000, 1999 and 1998, respectively.

At December 31, 2000, $1.2 million is included in accounts receivable for
radio and television revenue due from CBS. In addition, $501,000 is included in
the Company's accounts receivable related to license and subscription revenues
due from DBC. At December 31, 2000, the Company has a liability of $1.2 million
owed to CBS for royalty fees.

An executive of the Company is also a member of the Board of Directors of two
customers. For the years ended December 31, 2000, 1999 and 1998, $175,000,
$235,000 and $80,000, respectively, of advertising revenues were attributable to
these customers.



Note 9 - Comparative Quarterly Financial Data (unaudited)

`Quarter Ended
                                       -------------------------------------------------------
                                           March 31      June 30   September 30   December 31
                                       ------------  ------------ ------------- --------------
2000:
Net revenues......................... $     12,401   $    13,319  $     13,517  $      14,670
Gross profit......................... $      7,962   $     7,964  $      7,911  $       9,058
Net loss............................. $    (22,706)  $   (23,941) $    (20,309) $     (24,307)
Net Loss per share basic and diluted. $      (1.62)  $     (1.54) $      (1.23) $       (1.47)
Shares used in per share
   calculation, basic and diluted....       14,024        15,578        16,473         16,541


                                                           Quarter Ended
                                       -------------------------------------------------------
                                           March 31      June 30   September 30   December 31
                                       ------------  ------------ ------------- --------------
1999:
Net revenues......................... $      3,148   $     4,818  $      6,965  $      10,004
Gross profit......................... $      1,948   $     2,619  $      4,231  $       6,236
Net loss............................. $     (6,069)  $   (12,813) $    (19,996) $     (22,000)
Net loss per share basic and diluted. $      (0.52)  $     (1.02) $      (1.45) $       (1.58)
Shares used in per share
   calculation, basic and diluted....       11,635        12,548        13,800         13,902`

Item 9. Changes In and Disagreement with Accountants In Accounting and
Financial Disclosure

Not applicable.

PART III

Certain information required by Part III is omitted from this Report in
that we will have filed our definitive proxy statement pursuant to Regulation
14A no later than 120 days after the end of the fiscal year covered by this
report, and certain information is incorporated herein by reference.

Item 10. Directors and Executive Officers of the Registrant

Information relating to our executive officers is present under Item 4A
of this report. Information relating to our directors will be set forth under
the caption "Proposal No. 1 -- Election of Directors" in our definitive proxy
statement in connection with the Annual Meeting of Stockholders to be held in
May 2001. Such information is incorporated herein by reference in this report.
Our definitive proxy statement will be filed with the Securities and Exchange
Commission as required no later than 120 days after the end of the fiscal year
covered by this report.

Item 11. Executive Compensation

Information relating to executive compensation will be presented under
the caption "Executive Compensation" in our definitive proxy statement. This
information is incorporated by reference in this report.

Item 12. Security Ownership of Certain Beneficial Owners and
Management

Information relating to the security ownership of our common stock by
our management and other beneficial owners will be presented under the caption
"Security Ownership of Certain Beneficial Owners and Management" in our
definitive proxy statement. This information is incorporated by reference in
this report.

Item 13. Certain Relationships and Related Transactions

Information relating to certain relationships of our directors and
executive officers and related transactions will be presented under the caption
"Certain Relationships and Related Transactions" in our definitive proxy
statement. This information is incorporated by reference in this report.

PART IV

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

(a) Documents to be filed as part of this Annual Report on Form 10-K
 .

1. Consolidated Financial Statements (see index to Item 8).

2. Consolidated Financial Statement Schedules.

All consolidated financial statement schedules have been omitted since the
required information is not present in amounts sufficient to require submission
of the schedules, or because the information required is included in the
consolidated financial statements or notes thereto.

3. List of Exhibits.

The exhibits filed as part of this Form 10-K are listed in the Index to
Exhibits immediately preceding such exhibits, which Index to Exhibits is
incorporated by reference in this report.

(b) Reports on Form 8-K.

None.

(c) Exhibits. See Item 14(a)(3) above.

(d) Financial Statements. See Item 14(a)(1) above.











---

**SIGNATURES**

Pursuant to the requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has
duly caused the report to be signed on its behalf by the undersigned, thereunto
duly authorized, on the 2nd day of April, 2001.



| |                                  
| | ---------------------------------
| | MarketWatch.com, Inc.(Registrant)



| |                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | /s/ LARRY S. KRAMER
      
                         Larry S. KramerPresident and Chief Executive Officer 
                    (Principal Executive Officer)



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



|Signature                               | Title                                                                              | Date          
|--------------------------------------- | ---------------------------------------------------------------------------------- | --------------
|/s/ LARRY S. KRAMER
Larry S. Kramer     | President, Chief Executive
Officer and Chairman (Principal
Executive Officer)      | March 30, 2001
|/s/ JOAN P. PLATT
Joan P. Platt         | Chief Financial Officer and
Secretary (Principal Financial
and Accounting Officer) | March 30, 2001
|/s/ PETER GLUSKER
 Peter Glusker        | Director                                                                           | March 30, 2001
|/s/ ANDREW HEYWARD
Andrew Heyward       | Director                                                                           | March 30, 2001
|/s/  STEPHEN HILL
Stephen Hill          | Director                                                                           | March 30, 2001
|/s/ ROBERT LESSIN
Robert Lessin         | Director                                                                           | March 30, 2001
|/s/ JOHN MAKINSON
John Makinson         | Director                                                                           | March 30, 2001
|/s/ DANIEL MASON
Daniel Mason           | Director                                                                           | March 30, 2001
|/s/ RUSSELL I. PILLAR
Russell I. Pillar | Director                                                                           | March 30, 2001
|/s/ GILES SPACKMAN
Giles Spackman       | Director                                                                           | March 30, 2001

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INDEX TO EXHIBITS

|Exhibit Number | Exhibit Title                                                                                                                                                                             
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.01 (1)       | Merger Agreement dated January 13, 1999, between
Marketwatch.Com, LLC (the "LLC") and the Registrant.                                                                                     
|2.02 (2)       | Agreement and Plan of Reorganization dated April 28, 1999,
between the Registrant and BigCharts, Inc.                                                                                     
|3.01 (1)       | Registrant's Amended and Restated Certificate of Incorporation.                                                                                                                           
|3.03 (3)       | Registrant's Bylaws.                                                                                                                                                                      
|4.01 (3)       | Form of Specimen Stock Certificate for Registrant's Common
Stock.                                                                                                                         
|4.02 (1)       | Registration Rights Agreement dated January 13, 1999, among the
Registrant, CBS Broadcasting Inc. (formerly known as CBS Inc.) ("CBS") and Data
Broadcasting Corporation ("DBC").         
|4.03 (1)       | Stockholders' Agreement dated January 13, 1999, among the
Registrant, the LLC, CBS and DBC.                                                                                               
|10.01 (4)      | Form of Indemnity Agreement between the Registrant and each of
its directors.                                                                                                             
|10.02          | [Reserved]                                                                                                                                                                                
|10.03          | [Reserved]                                                                                                                                                                                
|10.04          | [Reserved]                                                                                                                                                                                
|10.05          | [Reserved]                                                                                                                                                                                
|10.06 (3)      | Lease dated as of August 27, 1998, between the Registrant and
CBS Corporation.                                                                                                            
|10.07 (1)      | Amended and Restated License Agreement dated January 13, 1999,
between the Registrant and CBS.                                                                                            
|10.08 (1)      | Amended and Restated Services Agreement dated January 13, 1999,
between the Registrant and DBC.                                                                                           
|10.09 (1)      | Revolving Credit Agreement dated January 13, 1999, between the
Registrant and DBC, together with Revolving Promissory Note dated January 13,
1999, made by the Registrant in favor of DBC.
|10.10* (3)     | Form of Non-Plan Option.                                                                                                                                                                  
|10.11* (3)     | Registrant's 1998 Directors Stock Option Plan.                                                                                                                                            
|10.12* (3)     | Registrant's 1998 Equity Incentive Plan.                                                                                                                                                  
|10.13* (3)     | Employment Agreement dated as of July 1, 1998, between the
Registrant and Lawrence Kramer.                                                                                                
|10.14          | [Reserved]                                                                                                                                                                                
|10.15          | [Reserved]                                                                                                                                                                                
|10.16* (5)     | Employment Agreement dated as of December 1, 1999, between the
Registrant and Joan Platt.                                                                                                 
|10.17 (5)      | Joint Venture Agreement dated January 6, 2000, between the
Registrant and Financial Times Group Limited.                                                                                  
|10.18          | [Reserved]                                                                                                                                                                                
|10.19 (6)      | Stock Purchase Agreement, dated March 28, 2000, among the
Registrant, CBS and DBC.                                                                                                        
|10.20 (7)      | Joint Venture Agreement dated June 19, 2000, among the
Registrant, Financial Times Group Limited, Pearson Internet Holdings BV and
Pearson Overseas Holdings Limited.                     
|10.21* (8)     | Employment Agreement dated as of October 2, 2000, between the
Registrant and William Bishop.                                                                                              
|10.22 (8)      | Employee Stock Purchase Plan.                                                                                                                                                             
|10.23*         | Employment Agreement dated April 28, 1999, between the
Registrant and Scott Kinney.                                                                                                       
|21.01 (9)      | Subsidiary of Registrant.                                                                                                                                                                 
|23.01          | Consent of PricewaterhouseCoopers LLP.                                                                                                                                                    
|               |                                                                                                                                                                                           

*	Indicates a management contract or compensatory plan or
arrangement.

(1)	Incorporated by reference to exhibit of the same number, filed with
the Registrant's Annual Report on Form 10-K (File No. 000-25113) filed with the
Securities and Exchange Commission on March 31, 1999.

(2)	Incorporated by reference to Exhibit 2.01, filed with the Registrant's
Current Report on Form 8-K (File No. 000-25113) filed with the Securities and
Exchange Commission on May 12, 1999.

(3)	Incorporated by reference to exhibit of the same number, filed with
the Registrant's Registration Statement on Form S-1 (File No. 333-65569), filed
with the Securities and Exchange Commission on October 13, 1998.

(4)	Incorporated by reference to exhibit of the same number, filed with
Amendment No. 3 to the Registrant's Registration Statement on Form S-1 (File No.
333-65569), filed with the Securities and Exchange Commission on January 13,
1999.

(5)	Incorporated by reference to exhibit of the same number, filed with
the Registrant's Annual Report on Form 10-K (File No. 000-25113) filed with the
Securities and Exchange Commission on March 30, 2000.

(6)	Incorporated by reference to Exhibit 10.1, filed with the Registrant's
Quarterly Report on Form 10-Q (File No. 000-25113) filed with the Securities and
Exchange Commission on May 15, 2000.

(7)	Incorporated by reference to Exhibit 10.2, filed with the Registrant's
Quarterly Report on Form 10-Q (File No. 000-25113) filed with the Securities and
Exchange Commission on November 14, 2000.

(8)	Incorporated by reference to exhibit of the same number, filed with
the Registrant's Quarterly Report on Form 10-Q (File No. 000-25113) filed with
the Securities and Exchange Commission on November 14, 2000.

(9)	Incorporated by reference to exhibits of the same number, filed with
the Registrant's Registration Statement on Form S-1 (File No. 333-84789), filed
with the Securities and Exchange Commission on August 9, 1999, as subsequently
amended.

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