**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, 2002**

**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.
[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. [   ]

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b 2 of the Act)
Yes  [   ]    No  [X]

As of June 30, 2002, the aggregate market value of voting stock held by
non-affiliates of the Registrant was $26,882,910.

The number of shares of the Registrant's Common Stock outstanding as of
March 20, 2003 was 17,216,532.

Documents incorporated by reference: portions of the Registrant's proxy
statements to be filed pursuant to Regulation 14A within 120 days after Registrant's
fiscal year end of December 31, 2002 are hereby incorporated by reference into
Part II, Item 5 and Part III of this report.







MARKETWATCH.COM, INC.
2002 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS







|**PART I.**                                                                                       | **Page**
|------------------------------------------------------------------------------------------------- | --------
|                                                                                                  |         
|Item 1.    Business                                                                               | 3       
|                                                                                                  |         
|Item 2.    Properties                                                                             | 29      
|                                                                                                  |         
|Item 3.     Legal Proceedings                                                                     | 29      
|                                                                                                  |         
|Item 4.     Submission of Matters to a Vote of Security Holders                                   | 30      
|                                                                                                  |         
|**PART II.**                                                                                      |         
|                                                                                                  |         
|Item 5.     Market for the Registrant's Common Equity and Related Stockholder
Matters             | 32      
|                                                                                                  |         
|Item 6.     Selected Financial Data                                                               | 33      
|                                                                                                  |         
|Item 7.    Management's Discussion and Analysis of Financial Condition and
Results of  Operations | 34      
|                                                                                                  |         
|Item 7A.  Quantitative and Qualitative Disclosures About Market Risks                             | 46      
|                                                                                                  |         
|Item 8.    Consolidated Financial Statements and Supplementary Data                               | 47      
|                                                                                                  |         
|Item 9.    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure   | 69      
|                                                                                                  |         
|**PART III.**                                                                                     |         
|                                                                                                  |         
|Item 10.   Directors and Executive Officers of the Registrant                                     | 70      
|                                                                                                  |         
|Item 11.   Executive Compensation                                                                 | 70      
|                                                                                                  |         
|Item 12.   Security and Ownership of Certain Beneficial Owners and
Management                     | 70      
|                                                                                                  |         
|Item 13.   Certain Relationships and Related Transactions                                         | 70      
|                                                                                                  |         
|Item 14.   Controls and Procedures
Management                                                     | 70      
|                                                                                                  |         
|PART IV.                                                                                          |         
|                                                                                                  |         
|Item 15.   Exhibits, Financial Statement Schedules and Reports on Form 8-
K                       | 70      
|                                                                                                  |         
|SIGNATURES                                                                                        | 72      
|                                                                                                  |         
|INDEX TO EXHIBITS                                                                                 | 75      

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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 Our 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 a subsidiary of Pearson plc 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 financial media company providing Web-based comprehensive,
real-time business news, financial programming and analytic tools through our
Web sites, CBS.MarketWatch.com and BigCharts.com, and licensing a wide array of
content and tools in custom-designed formats for brokerages and other online
businesses. We also sell subscription-based content for evaluating
investment newsletters under the Hulbert Financial Digest brand. We produce the
syndicated CBS MarketWatch Weekend television program, air financial reports
over The CBS Television Network, and provide business and financial news updates
every 30 minutes on the MarketWatch.com Radio Network.We
have important strategic relationships with our principal stockholders, CBS
Broadcasting Inc., or CBS, and Pearson International Finance Ltd., or Pearson.

Our goal is to create the pre-eminent brand for real-time business news and
financial information on the Web and other media and monetize that brand. 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 2002, our Web sites attracted an
average of approximately 10.7 million unique visitors per month, who generated
approximately 832 million page views. In the fourth quarter of 2001, our Web
sites attracted an average of approximately 9.2 million unique visitors per
month, who generated approximately 739 million page views.  Our visitor
information is provided to us by digiMine, Inc., our third-party provider of
audience traffic data.

CBS.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 80 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.  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 New York,
Washington D.C., Chicago, San Francisco, Tokyo and London to inform our audience
of the latest news as it breaks. Unlike some 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 80 professional journalists and freelance
journalists consists of 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;
Marshal Loeb, personal finance author and former managing editor of Money
magazine; David Callaway, former financial columnist for the Boston Herald and
head of financial services news for Bloomberg News in Europe; 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 our CBS.MarketWatch.com Web sites include:

- Front Page.
- Investor Tools.
- 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.
- Marketplace and Market Advisors.
- Newsletters and Research.

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.
- Price 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;

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

- Data.

Our array of communication tools provides our audience with the means to
communicate 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, which are stored in accordance with
our privacy policy.

Online Advertising Sales

We are focused on providing our advertisers with a large, demographically
desirable audience. Over the last several years, we increased the number of
advertisers from industries other than financial services.  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. Online advertising revenues represented 36%, 39% and 65% of our total net
revenues for the years ended December 31, 2002, 2001 and 2000, respectively.

We currently derive, and expect to continue to derive significant revenue
from online advertising sales. Our sales force seeks to provide advertisers
unique advertising positions with creative and innovative advertising solutions.
We offer a variety of advertising options that may be purchased individually or
in packages.  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 Web sites. The following is a sampling
of advertising options that are currently being offered:

- Introductory Message
- Embedded Commercial Unit
- Rich Media Window
- Email Newsletters
- Exclusive E-mail Drop.
- Run of Site or Run of Network.
- Targeted Advertising.
- Sponsorships.
- Content Sidebars.

Additionally, we offer advertisers access to a consortium of major publishers
called the At-Work Brand Network.  Sites included in the network are
CBS.MarketWatch.com, the NY Times.com, CNET Networks, USATODAY.com and, on some
occasions, weather.com. The network provides advertisers with the efficiency of
a one-order one-report system. The client only has to submit its creative
advertising units to one party for distribution across the system. According to
Media Metrix, the five sites in the At-Work Brand Network provide advertising
clients with an at-work audience of more than 20 million unique users. This
represents, according to Media Metrix, over 45% of the total at-work online
audience.

Our online advertising direct sales force consists of more than 15
specialists. 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, developing
presentations and promotional materials and building relationships with
advertising buyers. 24-7/Real Media's Open Ad Stream software provides the
advertising management and delivery services for our Web sites and provides
advertisers with reports describing the delivery of their advertisements.

Content Licensing

Our licensing business focuses on business-to-business relationships with
partners of all sizes to generate fee revenue. We license interactive stock
research tools such as charting, screeners, portfolios and alerts, along with
news and editorial content from the CBS.MarketWatch.com newsroom and third-party
news providers.  Our clients include a wide variety of Internet Web site
operators, with a particular focus on companies in the banking, brokerage,
publishing and financial services industries. For the years ended December 31,
2002, 2001 and 2000, licensing revenue accounted for 55%, 54% and 29%,
respectively, of our total net revenue.

Our licensing sales and development group works to provide customized
solutions for businesses that want to seamlessly integrate financial charting,
analytic tools and other financial content into their Web sites. 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, Merrill Lynch Online, Morgan Stanley
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 copyrighted as our own on all of our licensing
partners' Web sites.

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 stations capable of
reaching 85% of U.S. households as of December 31, 2002. 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.

Other television reporting includes contributions to CBS The Early Show,
CBS Evening Newsweekend broadcasts 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 cash payments from CBS for this reporting.
However, all reports delivered by our correspondents are identified as our
reports. We believe the provision of services to CBS by our correspondents helps
to strengthen our brand awareness. We do not have a formal agreement with CBS
with respect to our correspondents who provide reports to CBS or its affiliates.
Therefore, we cannot assure you that these services will continue in the
future.

We also produce radio reports from our Washington, D.C. bureau for
distribution by the Westwood One Radio Network to over 225 stations as of
December 31, 2002. Our contract with Westwood One provides us with revenue based
on a pre-determined revenue share and requires contribution of content by us and
distribution and marketing services by Westwood One.

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 pre-eminent 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 operation of the CBS.MarketWatch.com Web site.
Under the terms of the amended and restated license agreement, we pay CBS a
percentage of our gross revenues, excluding certain revenue. The agreement is
subject to termination if competitors of CBS acquire specified amounts of our
common stock or in other specific circumstances.

Our license agreement with CBS will expire on October 29, 2005, and CBS has
no obligation to renew it. CBS will also have 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 CBS.MarketWatch.com trademark and do not establish
a substitute mark acceptable to CBS.

Advertising.  CBS agreed under the terms of the contribution agreement
(as amended by a stockholders' agreement),subject to certain
limitations, to provide us an aggregate rate card amount of $30.0 million in
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.  CBS also agreed under the terms of the stock purchase
agreement that was entered into with CBS in March 2000 to provide an additional
$30.0 million in advertising during the period from March 1, 2000 through May 5,
2002. As of December 31, 2002, CBS had delivered $29.9 million rate card amount
of promotion and advertising under these commitments.  The remaining $56,000 of
rate card advertising and promotion from CBS has been extended through April 25,
2003.  This advertising and on-air promotion was an important element of our
strategy to build our brand awareness. CBS' obligation will terminate if our
license agreement terminates.

Reporting. We believe we have increased and will continue to expand
our brand awareness by providing financial news reports for CBS News and
Infinity Broadcasting ("Infinity") 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, and produce periodic reports for the CBS Evening News
weekend broadcasts and The Early Show on the CBS network. We do not
receive any cash payments from CBS for this reporting. However, we believe such
contributions help to strengthen our brand awareness.

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, now known as
Interactive Data Corporation, or IDC, is now a majority-owned subsidiary of an
affiliate of Pearson plc, one of our principal stockholders.

Data and Hosting. IDC currently provides real-time financial data to
us for dissemination to subscribers of certain of CBS.MarketWatch.com
subscription services in exchange for a percentage of the subscription fee.

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

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, or
user requested, quotes to individual subscribers.

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 1,136,814 additional shares of our 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 an affiliate of Pearson plc.  As of March 1, 2003, CBS and
Pearson each owned approximately 33% of our outstanding common stock. The
percentage ownership by CBS and Pearson has decreased from the percentage owned
at the time of our initial public offering due to an increase in shares
outstanding resulting from the issuance of shares pursuant to stock option
exercises, our employee stock purchase plan, and the purchases of BigCharts and
the Hulbert Financial Digest.

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 each have three
representatives 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
ownership. 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 a leading
provider of business and financial news on the Web.  CBS agreed to provide the
CBS.MarketWatch.com Web site with promotion and advertising with an aggregate
rate card amount of $30.0 million from March 2000 through December 2002. This
promotion and advertising was carried or displayed on CBS Television Network
programming, programming on CBS owned-and-operated television stations and
Infinity radio stations and/or Viacom Outdoor advertising. These advertising
placements took the form of 30-, 15- or 10-second commercial units, on-air
mentioning of our Web site, billboards 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, 2002, CBS had delivered $29.9 million rate card amount of promotion
and advertising.  The remaining $56,000 of rate card advertising and promotion
from CBS was extended through April 25, 2003.

CBS has displayed our CBS.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 journalist appearances on CBS Television and Infinity 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
CBS.MarketWatch.com brand. The CBS MarketWatch Weekend television show was
launched in September 1999.  As of December 31, 2002, the program was aired
weekly to stations capable of reaching over 85% of Designated Market Areas. The
CBS.MarketWatch.com Web site is also linked from CBS's primary web sites cbs.com
and cbsnews.com, as well as many of those owned and operated by CBS affiliate
television stations. We also have an agreement with Westwood One to distribute
our content over the Westwood One Radio Network. As of December 31, 2002, we
produced radio reports for distribution to over 225 stations in 133 broadcasting
markets, including all of the top 50 markets.

In addition to our CBS-related promotional activities, we conduct a variety
of other marketing and public relations programs and participate in personal
finance, online journalism and Internet-related conferences.

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 payments per click to our
CBS.MarketWatch.com site.
- America Online. In September 1999, we entered into a three-year distribution
agreement with America Online, Inc., or AOL, to be a provider of business and
financial news for AOL's network including its proprietary services, 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. The agreement with AOL was amended and, as of January
2003, the Company is committed to paying $1.5 million to AOL over the next two
years in fulfillment of the amended agreement.  AOL has the unilateral right to
cancel the agreement in November 2003.  If AOL cancels the agreement, our
commitment would be reduced to $842,000.
- Quicken.com. Intuit has been displaying certain of our news columns and
features in portions of its Quicken.com Web site and in return we receive a
share of any revenue from the sale of advertising on the Quicken.com pages that
display our content. In addition, Quicken.com has indexed certain news headlines
from us in their quote lookup section for which we agreed to pay Quicken a fee
per click to our Web site.
- Wireless applications. We have entered into strategic partnerships in the
wireless arena with Sprint, AT&T, Palm, Nextel and AvantGo.  Our wireless
presence, coupled with our traditional and online media assets, further extends
our distribution and branding, as well as present 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.

Subscription and Other Services

Increasingly in addition to offering free content, subsidized by
advertising on the CBS.MarketWatch.com Web site, we are developing and selling
subscription offers, including the Hulbert Financial Digest, a publication
devoted to tracking and analyzing investment newsletters.The monthly Hulbert Financial Digest and customized reports on specific
newsletter sectors are offered by paid subscription.  In addition,
CBS.MarketWatch.com launched a new online newsletter center featuring the
Hulbert Financial Digest that also includes free content including a directory
of financial newsletters as well as commentary about the financial newsletter
industry, including features from and about top newsletter editors and their
strategies.

The CBS.MarketWatch.com Web site also offers subscription-based third-party
financial data services that are targeted at sophisticated investors. These
services are currently created and provided by IDC on a non-exclusive basis
under a revenue sharing arrangement.  We act as IDC's sales agent with respect
to certain IDC services in exchange for a fee for new subscribers obtained
through the CBS.MarketWatch.com Web site.

Our CBS.MarketWatch.com 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.

The CBS.Marketwatch.com site also has free membership services available with
personalized features and settings such as access to news alerts, links to
members' broker Web sites, personalized portfolios and charting, e-newsletters,
archived content and other free offers.

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 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 the Microsoft Windows 2000
operating systems and use Microsoft Internet Information Server.

Internet access in the Minneapolis, New York and Redwood City data centers is
provided primarily by AT&T. The computer equipment used to operate our Web
sites at all facilities is powered by uninterruptible power supplies. The
AT&T co-location facilities are also equipped with backup generators to
provide an indefinite amount of runtime in the event of a local utility
failure.

We are continually developing new and enhanced services, tools and features.
We also use third-party technology for certain of our services and tools.

Competition

We are in a highly competitive industry and some of our competitors may
be more successful in attracting and retaining customers.

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 and CNN;
- 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 the Motley Fool;
- Web search and retrieval and other online services, such as Google, Yahoo!,
Lycos and other high-traffic Web sites, which offer quotes, financial news and
other programming and links to other business and finance-related Web sites;
- data companies that provide value-added tools, including charts, portfolios,
and stock screeners, such as Reuters and Thomson Financial Corporation; and
- providers of standardized and customized investment research tools, such as
Pinnacor and SmartMoney.
- Publishers of financial news for an institutional audience such as Reuters
and Dow Jones.

We anticipate that the number of direct and indirect competitors will
increase in the future. This could result in price reductions for our
advertising or licensed content and tools, 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 some 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, we cannot assure you 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.



Intellectual Property

Our intellectual property rights are costly and difficult to protect.
We may be subject to intellectual property infringement claims and related
indemnity obligations to our clients and business partners to whom we license
such intellectual property, which are costly to defend and could limit our
ability to use and license certain technologies in the future.

We rely primarily on a combination of copyrights, trademarks, trade
secret laws, our user policy and content license agreement and user agreement
restrictions on disclosure and use to protect our intellectual property, such as
our content, copyrights, trademarks, 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.  Also, these precautions may not 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, trademarks 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 from any claim by a third-party that the licensed
technology or content infringes any person's intellectual property rights.
However, we can not assure you 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 unavailable from the licensor, 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 new community features. However, any such licenses may not be
available on commercially reasonable terms, if at all. The loss of or inability
to obtain or maintain any of these technology or content licenses could result
in delays in introduction of new services until equivalent technology or
content, if available, is identified, licensed and integrated, which could harm
our business, results of operations and financial condition.

Infringement or other claims may be asserted or prosecuted against us and/or
our clients 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,
technology or trademarks, develop non-infringing technology or content 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
technology, content or trademarks, develop non-infringing technology or content
or license the infringed or similar technology or content on a timely basis, our
business, results of operations and financial condition could be materially
adversely affected.

Employees

As of December 31, 2002, there were 211 employees dedicated full-time to
our business, 37 of these personnel worked in product and content development,
44 in sales and marketing, 76 in editorial, 28 in Web site operations and 26 in
administration.

Factors That May Affect Our Operating Results

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

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:

- Fluctuations in traffic levels on our Web sites, which can be significant as
a result of business, financial and other 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, disruption of business due to threats of conflict or
military action by the United States, or other factors;
- Changes in demand for licenses of our technology and news;
- The ability to develop new products and services;
- Our ability to enter into or renew on favorable terms 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;
- New services introduced by us or our competitors;
- The level of Web usage;
- Competitive factors;
- Costs associated with restructuring activity;
- 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.

Although we generated net income for the first time in the fourth quarter of
2002 and positive operating cash flow for the first time in the fourth quarter
of 2001 and were cash flow positive for the twelve months ended December 31,
2002, you should not rely on the results for those periods as an indication of
future performance.  In particular, given the general economic uncertainty and
the softness of the advertising market, we may not remain cash flow positive or
generate net income for fiscal 2003 or any particular quarter in fiscal
2003.

Over time, our revenues have come from a mix of advertising, content
licensing, broadcasting and subscription service fees. Our revenue has declined
over the past year primarily 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 than we
expect, we may not be able to quickly reduce our spending in response. 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 traffic levels on our Web sites typically fluctuate with the
occurrence of significant events in business, financial and other 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. Over the last two years, we and other Web
advertisers have experienced a significant softening in demand for our
advertising services due to decreased spending on Web advertising by companies
and due to general uncertainty about the economy. We expect this reduced demand
to continue for the foreseeable future. In addition, threats of conflict or
military action by the United States may further disrupt business, curb spending
by companies or otherwise slow down economic recovery.  The continued decline in
the advertising market would substantially harm our business and could result in
a further decline in the trading price of our common stock.

Furthermore, 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 were not perceived as an effective
advertising medium. Also, advertisers that have traditionally relied upon other
advertising media may be reluctant to advertise on the Web especially given the
general uncertainty in the economy. Advertisers that already have invested
substantial resources in other advertising methods may be reluctant to adopt a
new advertising strategy and may find it more difficult to measure the
effectiveness of Web advertising. In addition, our online advertising packages
are sold in campaigns ranging from less than two 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.

Moreover, a substantial portion of our online advertising revenue comes from
Internet commerce and financial services companies that have been adversely
affected by the recent market downturn, which has resulted in these companies
spending less for on-line advertising.  If we do not diversify our advertiser
base and continue to attract advertisers from other industries, our business
could be adversely affected.  Moreover, diversification of our advertising base
may require us to adapt to different requirements and expectations that these
new advertisers may have with respect to advertising programs.  If we fail to
adapt accordingly, our business, operating results and financial condition may
be adversely affected.

Further, the existing brokerage and financial services companies and
customers in other markets that we target may merge which would
further reduce the number of our existing and potential customers.
For example, in the current year, Ameritrade, one of our customers, acquired
Datek, who was also one of our customers. As a result, our online
advertising revenue was adversely affected.

We Rely Significantly On Revenue From Advertising, Which Is Difficult to
Forecast Accurately

Currently, a significant amount of our revenues come from
advertisements displayed on our Web sites. We derive the majority of our
revenues from the sale of advertisements under short-term contracts, which are
difficult to forecast accurately. In addition, our advertising packages are sold
in campaigns ranging from less than two weeks to a year or more. Advertisers
generally have the right to cancel a campaign with two weeks notice without
penalty. In cases where the advertiser is providing services, the agreements
often have payments contingent on usage levels. Some of our advertisers are
Internet companies that, in certain cases, may lack financial resources to
fulfill their commitments. Accordingly, it is difficult to accurately forecast
these revenues. Our expense levels are based in part on expectations of future
revenues and are fixed over the short term with respect to certain categories.
We may be unable to adjust spending quickly enough to compensate for any
unexpected revenue shortfall. Accordingly, the cancellation or deferral of
advertising agreements could have a material adverse effect on our financial
results.

No Standard Has Been Widely Accepted to Measure the Effectiveness of Web
Advertisement and Changes in Current Pricing Models Could 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. In addition, 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 License Revenues, and If License Revenues Were to Decline,
Our Business Would Be Harmed

We expect to derive a substantial portion of our revenues from licensing
of our content for the foreseeable future. Licensing revenue depends 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. We derive a significant percentage of our licensing
revenue from a small number of large clients. Also, a significant amount of our
licensing revenue is earned from brokerages and financial services companies. In
many cases, the amount of licensing revenue depends on the number of qualified
account holders these customers have each month. If the number of qualified
account holders were to decrease, our licensing revenue could decrease. A number
of these brokerages and financial services companies have experienced a decrease
in account holders as a result of recent market downturns. The growth of our
licensing revenue could also be limited as there are a limited number of
brokerages and financial services companies. In addition, certain license
contracts guarantee the performance of our Web sites. If our sites do not
perform as guaranteed, our licensing revenue would be adversely affected.

Also, some of the licensing tools we have created and currently market to
existing and potential customers require users to disclose personally
identifiable information and would allow us access to such confidential
information. Due to concerns about user privacy issues, existing and potential
licensing customers may be deterred from licensing these tools, which could harm
our future licensing revenue.

In addition, we receive a portion of the data incorporated in our licensing
products from third parties. For example, we receive data from Dow Jones and
Thomson Financial Corporation who are also competitors.  If they or others
perceive us as a competitor, they may discontinue providing services to us.
Also, some of our third party data providers have restrictions on access to and
use of these data, which may make our licensing products incorporating these
data less attractive to our existing and potential customers, which in turn may
adversely affect our licensing revenue.

Further, the existing brokerage and financial services companies and
customers in other markets that we target may merge which would further reduce
the number of our existing and potential customers. As a result, our licensing
revenue may be adversely affected. Moreover, a substantial portion of our
licensing revenue comes from media and financial services companies, which have
been adversely affected by the recent market downturn. If we do not diversify
our client base and continue to attract customers from other industries, our
business could be adversely affected.

Because We Depend on CBS and Pearson for a Number of Services and Other
Rights, Our Business Would be Materially Adversely Affected if Either One of
Them Terminates Their Strategic Relationships With Us

Pursuant to our license agreement with CBS, we were granted the right to
use the CBS name and logo, as well as CBS Television Network news content in
connection with the operation of the CBS.MarketWatch.com Web site. This license
agreement will expire on October 29, 2005 and CBS has no obligation to renew it.
Also, under specific circumstances, CBS may terminate the license agreement
earlier. If we are not able to renew our license agreement with CBS or CBS
terminates the license agreement earlier than October 29, 2005, we would need to
change the name of our Web site and devote substantial resources toward building
a new brand name. Regardless of such expenditures, 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.

Moreover, we are subject to a number of restrictions in consideration for the
license grant and provision of news content from CBS. For example, CBS can
require us to remove any content on our Web sites that it determines conflicts,
interferes with or is detrimental to its reputation or business or which CBS
deems inappropriate. 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. However, if we fail to comply with these restrictions, CBS
may terminate the license agreement.

Similarly, pursuant to the service agreement, Pearson provides us with
real-time financial data for dissemination to license clients and subscribers of
certain of CBS.MarketWatch.com subscription services. If Pearson suspends
delivery of delayed financial data or fails to provide such 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.

The Interests of CBS and Pearson Could Conflict with the Interests of Our
Stockholders and Given Their Substantial Stock Ownership in the Company, We May
Not Be Able to Resolve Any Future Conflict with Either of Them on Terms
Favorable to Us

CBS and Pearson may experience conflicts of interest in their business
dealings with us with respect to decisions involving business opportunities and
other similar matters. 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.

The occurrence of any of the above actions could adversely affect our
business. For example, these sites or services supported by CBS or Pearson could
compete with us or CBS and Pearson might promote these other sites or services
more actively than they promote our Web sites.

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 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, if at all. Even if we enter
into distribution relationships with these Web sites, they themselves may not
attract a significant number 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 types 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 sites. 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 Third-Party Software 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-party software to provide these measurement services.
If the third-party is 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 have implemented and 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.

Our Business Will Be Adversely Affected If We Do Not Develop and Maintain an
Effective Sales Force

We depend on our sales force to sell online advertising on our Web sites and
license our content. 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.

If we are unable to attract and retain an appropriate sales force, our
revenue may fail to increase or may decline.

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

We believe that we will need to expand our 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 growth
could be constrained and 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. For
example, we acquired Hulbert Financial Digest and have begun to offer Hulbert
newsletters through subscription. Furthermore, we intend to introduce additional
or enhanced services in the future in order to retain our current users and
attract new users. If the Hulbert newsletters or other services we introduce are
not favorably received, our current users may not continue to access our Web
sites or use our services as frequently. New users could also choose competitive
Web sites or services 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 sites 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.

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

Because we expect to depend significantly 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.

However, 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 in general and usage of our Web sites in particular,
could grow more slowly or decline.

We Depend on Key Personnel Who May Not Continue to Work For Us

We believe that our future success will depend in part on our continued
ability to attract, integrate, retain and motivate highly qualified sales,
technical, editorial 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 employment with us at any time for any reason. At times we have
experienced difficulties in attracting new personnel. We may not successfully
attract, integrate, retain and motivate a sufficient number of qualified
personnel to conduct our business in the future.

We May Have Difficulty Scaling and Adapting Our Existing Architecture to
Accommodate Increased Traffic and Technology Advances

Our business relies on our ability to serve Web pages in a consistent and
timely manner. 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. 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. Our Web sites have in the past and may
in the future experience slower response times and other problems for a variety
of reasons. Also, 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 also depend on multiple information providers, including but not limited
to FT Interactive Data, S&P Comstock, Dow Jones, Thompson Financial
Corporation and Reuters 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 sites 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, which are exacerbated by the
recent growth of the Web and the intense competition in our industry. We may
fail to successfully 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.

Unauthorized Break-Ins and Other Disruptions 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 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. We also provide indemnification to some of our licensing
customers for unauthorized access to and use of customer data as a result of
break-ins and other unauthorized access. Our defense of any action brought
against us based upon improper access to confidential customer data or
indemnification of our licensing customers for similar claims brought against
them could be costly and involve significant distraction of our management and
other resources. Also, our operations are dependent upon our ability to protect
systems against damage from fire, earthquakes, power loss, telecommunications
failure, 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.

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 conduct financial transactions or 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. 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 libel, slander, defamation, negligence,
copyright or trademark infringement or based on other theories relating to the
information we publish on our Web sites or license to our clients. 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. Moreover, because we license some data and content
from third parties, our exposure to various claims may increase. Although we
generally obtain representations as to the origins and ownership of licensed
content from third parties and generally obtain indemnification from these third
parties to cover any breach of any such representations, we do not generally
receive representations or indemnification to cover libel, slander, defamation,
or negligence relating to the third party content. Moreover, the representations
we do receive from third parties may be in error and the indemnification
provided by these parties may be insufficient to provide adequate compensation
for any breach of such representations. Also, our insurance may not adequately
protect us against these types of claims and related indemnification
obligations. Moreover, our defense of any action brought against us based upon
the content that is accessible from our Web sites could be costly and involve
significant distraction of our management and other resources.



Future Regulation of the Internet May Slow Its Growth, Resulting in
Decreased Demand for Our Products and Services and Increased Costs of Doing
Business

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.

Terrorist Attacks and Threats or Actual War May Negatively Impact All
Aspects of Our Operations, Revenues, Costs and Stock Price

Recent terrorist attacks in the United States, as well as future events
occurring in response or connection to them, including future terrorist attacks
against United States targets, rumors or threats of war, actual conflicts
involving the United States or its allies, including war with Iraq, or military
disruptions may impact our operations. For example, the disruption of the global
financial markets due to September 11, 2001, events, including the shutdown of
NASDAQ and NYSE, impacted the reporting of financial information on our Web
sites. More generally, any of these events could cause consumer confidence and
spending, including spending on the Web, to decrease, which may impact our
online advertising revenues. Also, volatility in the United States and worldwide
financial markets and economy has contributed to volatility in the stock prices
of United States publicly traded companies. Further acts of terrorism and civil
disturbances in the United States or elsewhere could have a significant impact
on our operating results, revenues and costs.

We Are Involved in a Securities Class Action Litigation and Are At Risk of
Additional Similar Litigation



In the past, securities class action litigation has often been brought
against a company following periods of volatility in the market price of
securities. We are a party to the securities class action litigation described
in Item 3, "Legal Proceedings." The defense of the litigation described in Item
3 may increase our expenses and divert our management's attention and resources,
and an adverse outcome in this litigation could seriously harm our business and
results of operations. In addition, we may in the future be the target of other
securities class action or similar litigation.

We Face Risks Associated with Potential Acquisitions

We have made acquisitions in the past and may make acquisitions in the
future. Acquisitions of companies, products or technologies entail numerous
risks, including an inability to successfully assimilate acquired operations and
products, diversion of management's attention, loss of key employees of acquired
companies and substantial transaction costs. Some of the services acquired may
require significant additional development before they can be marketed and may
not generate revenue at anticipated levels. Moreover, future acquisitions by us
may result in dilutive issuances of equity securities, the incurrence of
additional debt, large one-time write-offs and the creation of goodwill or other
intangible assets that could result in significant amortization expense. Any of
these problems or factors could seriously harm our business, financial condition
and operating results.

Because Two of Our Large Stockholders Beneficially Own Approximately 66% of
Our Stock, They Have Substantial Control Over the Management of Our Company and
Significant Sales of Stock Held by Them Could Have a Negative Effect on Our
Stock Price

CBS and Pearson beneficially owned 66% of our outstanding common stock as of
December 31, 2002. Each of CBS and Pearson has three representatives on our
board of directors. As a result of their ownership and board positions, CBS and
Pearson individually and collectively are able to significantly influence all
matters requiring stockholder approval, including the election of directors and
approval of significant corporate transactions. Such concentration of ownership
may also have the effect of delaying or preventing a change in control of our
company. In addition, sales of significant amounts of shares held by either of
CBS or Pearson or collectively, or the prospect of these sales, could adversely
affect the market price of our common stock.

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 the last 52 week period ended December 31, 2002, the
closing sale prices of our common stock on the NASDAQ National Market ranged
from $3.25 to $5.09. As of March 20, 2003, the closing sale price was $6.09. 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, news reports relating to trends in our markets and general economic
conditions. In addition, the stock market in general, and the market prices for
Internet-related companies in particular, have experienced extreme volatility.
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. This lease expires in May
2009.  A portion of our news and sales teams are located out of 7,367 square
feet of office spaces in New York, New York, also leased from CBS.  We also have
data centers in Minneapolis, New York and Redwood City, California.

Item 3. Legal Proceedings

On and after April 17, 2001, five putative shareholder class action
lawsuits were filed against us, certain of our current and former officers and
directors (the "Individual Defendants"), and a number of investment banks,
including some of the underwriters of our initial public offering. The lawsuits
were filed in the Southern District of New York.  Four of the lawsuits purport
to be class actions filed on behalf of purchasers of our stock during the period
January 15, 1999 through April 16, 2001, and the fifth lists the period January
14,1999 through April 21, 2001.  The complaints have been consolidated into a
single action and a Consolidated Amended Complaint, which is now the operative
complaint, was filed on April 19, 2002.

Plaintiffs allege that the underwriter defendants agreed to allocate stock in
the initial public offering to certain investors in exchange for excessive and
undisclosed commissions and agreements by those investors to make additional
purchases of stock in the aftermarket at pre-determined prices. Plaintiffs
allege that the prospectus for our initial public offering was false and
misleading in violation of the securities laws because it did not disclose these
arrangements. We and our current and former officers and directors vigorously
deny all allegations of wrongdoing and intend to vigorously defend the actions.
The action seeks damages in an unspecified amount.

The action against us is being coordinated with approximately three hundred
other nearly identical actions filed against other companies.  On July 15, 2002,
we moved to dismiss all claims against us and the Individual Defendants.  On
October 9, 2002, the Court dismissed the Individual Defendants from the case
without prejudice based upon Stipulations of Dismissal filed by the plaintiffs
and the Individual Defendants.  On February 19, 2003, the Court denied the
motion to dismiss the complaint against us.  Prior to the decision on the motion
to dismiss, there were settlement discussions among the plaintiffs, the company
defendants and their insurance carriers which did not contemplate the payment of
any Company funds but would involve the assignment of claims to the plaintiffs.
We cannot predict as to whether or when a settlement might occur.

Due to the inherent uncertainties of litigation, we cannot accurately predict
the ultimate outcome of the litigation, including whether the settlement
discussions described above will be successful. Any unfavorable outcome of this
litigation could have an adverse impact on our business, financial condition,
and results of operations.

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

None.

Item 4A. Executive Officers of the Registrant

The following table sets forth certain information regarding the
executive officers of MarketWatch.com as of March 15, 2003:

`Name               Age                  Position
------------------------------ ----- ----------------------------------------
Larry S. Kramer...............   52  Chief Executive Officer and Chairman
                                     of the Board of Directors
Kathy Yates...................   48  President and Chief Operating Officer
Joan P. Platt.................   49  Chief Financial Officer and Secretary
William Bishop................   34  Executive Vice President and General Manager
Scot McLernon.................   45  Executive Vice President, Advertising Sales
                                     and Marketing
Scott Kinney..................   41  Executive Vice President, Licensing
Jamie Thingelstad.............   31  Chief Technology Officer
Dave Callaway.................   39  Editor-in-Chief`

Mr. Kramer has served as Chief Executive Officer and a member of the Board of
Directors of MarketWatch.com since October 1997, and is the founder of
MarketWatch.com. 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. Loeb 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 holds a
B.S. degree in Journalism from Syracuse University and an M.B.A. degree from the
Harvard Business School.  Mr. Kramer was a founding board member of the Online
Press Association in 2001.

Ms. Yates was named President and Chief Operating Officer of MarketWatch.com
in December 2001. She is a veteran Internet media executive, having started or
lead several Internet ventures since 1995. Her roles have included founder and
Vice President/Business Development for Knight Ridder Digital, founding Board
Member of CareerPath (now CareerBuilder) and Classified Ventures (parent company
of HomeHunter.com, Cars.com and NewHomes.com), and Vice President/Product
Development for Women.com. Prior to founding Knight Ridder Digital, Ms.
Yates spent 13 years in executive positions with the San Jose Mercury News and
its parent, Knight Ridder, Inc. She began as Assistant to the Publisher of the
Mercury News in 1981, was promoted to Chief Financial Officer in 1982 and served
as Senior Vice President and General Manager from 1988 to 1994. Yates
earned an M.B.A. from Stanford University Graduate School of Business and
graduated from Trinity College with a degree in Economics.

Ms. Platt has served as Chief Financial Officer since December 1999. From May
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 is a Certified Public Accountant and holds a B.S. in
business administration from The Pennsylvania State University.

Mr. Bishop has served as Executive Vice President and General Manager since
June 2001.  From October 2000 until June 2001, Mr. Bishop served as Executive
Vice President of Business and Product Development. He served as Executive Vice
President of Business Development from February 2000 until October 2000, and was
Vice President of Business Development of MarketWatch.com from the Company's
formation in October 1997 until February 2000. 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 and Marketing 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 Inc.

Mr. Kinney has served as Vice President of Licensing 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 Graduate School of
Business.

Mr. Thingelstad has served as Chief Technology Officer of MarketWatch.com
since February 2002, and also served in that capacity from June 1999 until
February 2001. From February 2001 to February 2002, he was self-employed as an
Internet industry consultant.  From June 1996 to June 1999, Mr. Thingelstad
served as Chief Technology Officer and a Director of BigCharts, Inc. From
February 1995 to March 1996, he served as a Director of Technology at WebSpan,
Inc., an Internet service provider. From early 1993 to January 1996, Mr.
Thingelstad served as the Technical Coordinator for the Disability Services
Department at the University of Minnesota. Mr. Thingelstad attended the
University of Minnesota's Institute of Technology.

Mr. Callaway was named editor-in-chief of MarketWatch.com in March of 2003
after serving three years as executive editor and one year as managing editor.
He has been a vice president in charge of all news operations since March 2000.
Mr. Callaway has more than 15 years of journalism experience, including five
years as a London correspondent for Bloomberg News and six years as a reporter
and financial columnist for The Boston Herald. In 2001, Mr. Callaway was named
one of the 100 most influential business journalists in the U.S. by The Journal
of Financial Reporters. Mr. Callaway holds a B.A and M.A. degree in journalism
from the Medill School of Journalism at Northwestern 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 National Stock Market under the symbol "MKTW". The
approximate number of record holders of our common stock as of March 20, 2003
was 278 (although we believe there was a greater number of beneficial
owners).

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, 2002           High        Low
---------------------------  ----------  ----------
First Quarter.............. $     4.50  $     3.11
Second Quarter............. $     5.49  $     3.90
Third Quarter.............. $     4.93  $     3.81
Fourth Quarter............. $     5.05  $     3.88

       Year ended
    December 31, 2001           High        Low
---------------------------  ----------  ----------
First Quarter.............. $     6.25  $     2.91
Second Quarter............. $     4.29  $     2.07
Third Quarter.............. $     3.01  $     1.06
Fourth Quarter............. $     4.71  $     1.50`

Dividend Policy

Equity Compensation Plan Information

`Number of Shares
                                      Number of Shares                                 of Common Stock
                                       of Common Stock                               Remaining Available
                                        to be Issued           Weighted Average      for Future Issuance
                                       Upon Exercise of         Exercise Price of       Under our Stock
                                      Outstanding Options      Outstanding Options        Option Plans
                                      --------------------   ----------------------   --------------------
Stock Option Plans Approved by
Shareholders........................        3,281,723           $      6.17                1,203,569`

Item 6.  Selected Financial Data

The following selected financial data has been derived from
MarketWatch's consolidated statements of operations for the fiscal years ended
December 31, 2002, December 31, 2001, and December 31, 2000, and consolidated balance sheets
as of December 31, 2002 and December 31, 2001, which are included herein, and
have been audited by PricewaterhouseCoopers LLP, independent auditors. The
information set forth below is not necessarily indicative of future operating
results and should be read in conjunction with the consolidated financial
statements and notes thereto appearing elsewhere in this Annual Report on Form
10-K.

`Years Ended December 31,
                                     ----------------------------------------------------------
                                        2002        2001        2000        1999        1998
CONSOLIDATED STATEMENTS              ----------  ----------  ----------  ----------  ----------
OF OPERATIONS DATA

(in thousands except per share data)

Net revenues....................... $   44,524  $   45,856  $   53,907  $   24,935  $    7,027
Gross profit.......................     28,185      27,233      32,895      15,034       4,190
Operating expenses.................     38,548     103,834     121,448      77,324      16,444
Net loss...........................     (9,653)    (76,523)    (91,263)    (60,878)    (12,413)
Basic and diluted net loss
  per share(1)..................... $    (0.57) $    (4.60) $    (5.83) $    (4.68) $    (1.38)
Shares used to compute basic and
  diluted net loss per share (1)(2)     16,959      16,648      15,659      13,004       9,000



                                     ----------------------------------------------------------
                                                         Years Ended December 31,
                                     ----------------------------------------------------------
                                        2002        2001        2000        1999        1998
                                     ----------  ----------  ----------  ----------  ----------
CONSOLIDATED BALANCE SHEET DATA

(in thousands)

Cash and cash equivalents.......... $   43,328  $   37,637  $   45,356  $    9,500  $      140
Working capital (deficit)..........     41,040      38,194      48,868      18,544      (5,889)
Total assets.......................     78,645      77,513     144,240     156,855       4,487
Advances from DBC(3)...............          -           -           -           -       3,946
Total stockholders' equity
  (deficiency)..................... $   70,297  $   69,051  $  133,417  $  149,148  $   (3,130)`



---

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

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

(3)  Advances from DBC by DBC Online/News at October 28, 1997 were neither
paid by the Predecessor business nor assumed by CBS.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
previously under the caption "Business - Factors That May Affect Our Operating
Results," and in other sections of this Annual Report on Form 10-K entitled
"Competition" and "Intellectual Property" 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

The year ended December 31, 2002 was a challenging year.  Despite the
continued economic downturn, we generated net income for the first time in the
fourth quarter of 2002 and positive operating cash flow for the twelve months
ended December 31, 2002.  We were also able to decrease the cost of net revenues
by 12% from the previous year to $16.3 million for fiscal 2002.

Organization

We are a leading 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,
earn advertising revenue from our television and radio programming, license our
content and tools to electronic brokers, financial publishers and portals, and
sell subscriptions to certain IDC products and the Hulbert Financial Digest.

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, now
known as Interactive Data Corporation, or IDC, 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
reorganized from a limited liability company into a corporation.

We have several agreements with our principal stockholders, including the
following:

- Upon conversion of CBS.MarketWatch.com into a corporation, CBS agreed to
contribute $30.0 million in advertising through October 2002 which was delivered
in full by June 30, 2000;
- In May 2000, CBS contributed an additional $30.0 million in rate card
advertising and promotion of which $29.9 million was delivered by December 31,
2002 and the delivery of the remaining $56,000 has been extended through April
25, 2003;
- CBS licenses its trademark and certain news content for royalties
approximating 8% of all of our net revenues other than revenue attributable to
IDC and certain other revenue. The license agreement expires in October 2005;
and
- IDC provided us with part of our Web site infrastructure and certain
operational and administrative services at IDC's cost, as required by the
Amended and Restated Services Agreement. IDC's service obligation expires on
October 29, 2005. We ceased using these services in 2001.  In addition, IDC paid
us a monthly, per subscriber fee for delivery of our news to IDC subscribers,
subject to a minimum payment of $100,000 per month.  This obligation expired in
October 2002.

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. In 2001 and 2000, we contributed
$1.5 million and $5.0 million, respectively, to the joint venture to fund
operations in accordance with the agreement. In
November 2001, we signed a sale and purchase agreement with the Financial Times
Group to transfer our ownership of the joint venture to the Financial Times
Group. As part of the ownership transfer, we signed a transitional services
agreement with the Financial Times Group under which we would migrate the
technology developed for the joint venture Web site to the Financial Times Group
for a fee.  The agreement also assigned certain equipment to us that was owned
by the joint venture.  In addition, we signed a license agreement with the
Financial Times Group under which we will provide certain content and tools for
a monthly fee.  Our portion of the loss in the joint venture was $1.5 million
and $5.0 million for the years ended December 31, 2001 and 2000, respectively.
Since we no longer had a commitment to fund the joint venture, we reversed the
previously recorded losses of $645,000 during the three months ended September
30, 2001.

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

The interests of CBS and Pearson could conflict with the interests of our
other stockholders and given their substantial stock ownership in the company,
we may not be able to resolve any future conflict with either of them on terms
favorable to us.  CBS and Pearson may experience conflicts of interest in their
business dealings with us with respect to decisions involving business
opportunities and other similar matters.  The occurrence of any of these actions
could adversely affect our business.

Revenue

We generate revenue from three primary sources: the sale of advertisements
and sponsorships on our Web sites; the license of our content and tools; and
other revenues including television, radio, membership center and subscription
products.  We operate in one segment.

Our net revenues decreased by 3% from the previous year to $44.5 million for
fiscal 2002.  The decrease was primarily a result of a reduction in on-line
advertising revenue due to a decrease in the number of advertisers on our web
site and smaller advertising buys from some existing customers.  However, the
decrease in net revenues was partially offset by an increase in subscription,
radio and television revenue.  The acquisition of the Hulbert Financial Digest
in April 2002 and its related revenue stream contributed to the increase in
subscription revenue.

Our ability to generate significant revenue or profits in the future remains
uncertain due to the weakened economy.  We may not generate net income or remain
cash flow positive for fiscal 2003 or any particular fiscal quarter.  Further,
in view of the rapidly evolving nature of our business and our limited operating
history, we have little experience forecasting our revenues.

We expect to derive a substantial portion of our revenues from advertising
for the foreseeable future.  Over the last two years, we and other Web
publishers have experienced a significant softening in demand for advertising
services due to decreased spending on Web advertising by companies and due to
general uncertainty about the economy.  We expect this reduced demand to
continue for the foreseeable future.  We derive a majority of our revenues from
the sale of advertisements under short-term contracts.  Advertisers generally
have the right to cancel a campaign with two weeks notice without penalty and
some have done so in the past.  Moreover, a substantial portion of our on-line
advertising revenue comes from Internet commerce and financial services
companies that have been adversely affected by the recent market downturn, which
has resulted in less spending for on-line advertising.  If we do not diversify
our advertiser base and continue to attract advertisers from other industries,
our business could be adversely affected.  Also, 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 for
any reason, future revenues could be adversely affected.

Our licensing revenue depends 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 licensing revenue is earned from brokerages and financial services
companies.  In many cases, the amount of licensing revenue depends on the number
of qualified account holders these customers have each month.  If the number of
qualified account holders were to decrease, our licensing revenue would
decrease.  A number of these brokerages and financial services companies have
experienced a decrease in account holders as a result of recent market
downturns.  Also, the growth of our licensing revenue could be limited as there
are a limited number of brokerages and financial services companies.

Liquidity

At December 31, 2002, cash and cash equivalents totaled $43.3 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 twelve
months.  However, we may need to raise funds sooner if we acquire any additional
businesses, products or technologies.  We are unable to predict whether and when
any prospective acquisition will become available or the likelihood that any
acquisition will be completed and successfully integrated.  Further, we cannot
assure you that additional financing will be available to us in any required
time frame on commercially reasonable terms, if at all.

Furthermore, we believe that we will need to expand our 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 growth could be constrained and our business could be adversely
affected.

Results of Operations

`Years ended December 31,
                                 --------------------------------------
                                      2002        2001        2000
                                   ----------  ----------  ----------
                                  (in thousands, except per share data)
Net revenues:
  Online Advertising............. $   16,036  $   17,988  $   34,952
  Licensing......................     24,631      24,775      15,809
  Other..........................      3,857       3,093       3,146
                                   ----------  ----------  ----------
       Total net revenues........     44,524      45,856      53,907
Cost of net revenues.............     16,339      18,623      21,012
                                   ----------  ----------  ----------
       Gross profit..............     28,185      27,233      32,895
                                   ----------  ----------  ----------
Operating expenses:
  Product development............      6,954       8,308       8,725
  General and administrative.....     11,315      12,600      14,211
  Sales and marketing............     20,279      29,975      47,130
  Amortization of goodwill
    and intangibles..............          -      51,542      51,382
  Restructuring costs............          -       1,409           -
                                   ----------  ----------  ----------
       Total operating expenses..     38,548     103,834     121,448
                                   ----------  ----------  ----------
          Loss from operations...    (10,363)    (76,601)    (88,553)
   Interest income...............        710       1,554       2,285
   Loss in joint venture.........          -      (1,476)     (4,995)
       Net loss.................. $   (9,653) $  (76,523) $  (91,263)
                                   ==========  ==========  ==========
Basic and diluted net loss per
  share.......................... $    (0.57) $    (4.60) $    (5.83)
                                   ==========  ==========  ==========
Shares used in the calculation of
  basic and diluted net loss per
  share..........................     16,959      16,648      15,659
                                   ==========  ==========  ==========

                                          Years ended December 31,
                                 ------------------------------------
                                      2002        2001        2000
                                   ----------  ----------  ----------
                                     (as a percentage of net revenues)
Net revenues:
  Online Advertising.............         36 %        39 %        65 %
  Licensing......................         55          54          29
  Other..........................          9           7           6
                                   ----------  ----------  ----------
       Total net revenues........        100         100         100
Cost of net revenues.............         37          41          39
                                   ----------  ----------  ----------
       Gross profit..............         63          59          61
                                   ----------  ----------  ----------
Operating expenses:
  Product development............         16          18          16
  General and administrative.....         25          28          26
  Sales and marketing............         46          65          88
  Amortization of goodwill
    and intangibles..............          -         112          95
  Restructuring costs............          -           3           -
                                   ----------  ----------  ----------
       Total operating expenses..         87         226         225
                                   ----------  ----------  ----------
          Loss from operations...        (23)       (167)       (164)
Interest income..................          2           3           4
Loss in joint venture............          -          (3)         (9)
                                   ----------  ----------  ----------
       Net loss..................        (22)%      (167)%      (169)%
                                   ==========  ==========  ==========`

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these consolidated financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, we evaluate our
estimates, including those related to bad debts, investments, goodwill,
restructuring, contingencies and litigation. We base our estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements:

We generate our net revenues from three primary sources: the sale of
advertising on our Web sites; the license of content; and other revenues
including television, radio, membership center and subscription products.

Online advertising revenues, derived from the sale of advertisements and
sponsorships on our Web sites, are 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 obligations remain on our part and collection of
the resulting receivable is probable. Our obligations typically include
guarantees of a minimum number of "impressions" or times that an advertisement
is viewed by users of our 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 our
content and tools. License revenues consist 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,
membership center revenues, and subscription revenues. We produce a weekend
television program for distribution on CBS affiliates and daily radio broadcasts
for distribution by Westwood One Radio Network. We share in the revenue earned
through the sale by CBS sales forces and Westwood One of advertising space
during their respective television and radio 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.  Membership center revenues consist of fees for leads generated from
promotions placed in the membership center section of the CBS.MarketWatch.com
Web site and are recognized in the month the leads are generated.  Membership
center customers pay us a fixed fee for each customer that comes to our site and
registers for their product from the CBS.MarketWatch.com Web site.Subscription revenue relates to customer subscriptions
to the Hulbert Financial Digest, a publication devoted to tracking and analyzing
investment newsletters, and IDC online services, MarketWatch RT and MarketWatch
Live, which provide subscribers access to real-time exchange data and analytical
products and are sold through our Web sites. Revenue from subscriptions is
recognized ratably over the subscription period. Deferred revenues relate to
prepayments of license and advertising contracts and subscription fees for which
amounts have been collected but for which revenue has not been recognized.

Revenues from barter transactions, in accordance with the provisions of
Accounting Principles Board Opinion No. 29 "Accounting for Nonmonetary
Transactions,"or APB 29, are recognized during the period in which the
advertisements are displayed on our Web sites. Under the provisions of APB 29,
barter transactions are recorded at the fair value of the goods or services
received. For the years ended December 31, 2002, 2001 and 2000, we recognized
$483,000, $1.5 million and $508,000, respectively, in barter revenue.

We maintain an allowance for doubtful accounts for estimated losses from the
inability of our customers to make required payments.  We analyze specific
accounts receivable, historical bad debts, customer concentrations, customer
credit-worthiness, current economic trends and changes in our customer payment
history when evaluating the adequacy of the allowance for doubtful accounts.
Changes in the above factors can have a material impact on actual bad debts
incurred.

As discussed in Note 2 of the consolidated financial statements, we
are required to regularly review all of our long-lived assets, including
goodwill and other intangible assets, for impairment whenever events or changes
in circumstances indicate that the carrying value may not be recoverable.
Factors we consider important which could trigger an impairment review include,
but are not limited to, significant underperformance relative to historical or
projected future operating results, significant changes in the manner of use of
the acquired assets or the strategy for our overall business, significant
negative industry or economic trends, a significant decline in our stock price
for a sustained period, and our market capitalization relative to net book
value. When we determine that an impairment review is necessary based upon the
existence of one or more of the above indicators of impairment, we measure any
impairment based on a projected undiscounted cash flow method. Significant
judgement is required in the development of projected cash flows for these
purposes including assumptions regarding the appropriate level of aggregation of
cash flows, their term and discount rate as well as the underlying forecasts of
expected future revenue and expense.  We have not recorded significant
impairment charges for goodwill and intangible assets in the past.  However, to
the extent that events or circumstances cause our assumptions to change, we may
be required to record a charge in the future that could be material.



In conjunction with preparing our consolidated financial statements, we must
estimate our income taxes in each of the jurisdictions in which we operate. This
process involves estimating our actual current tax expense together with
assessing temporary differences resulting from differing treatment of items for
tax and accounting purposes. These differences result in deferred tax assets and
liabilities. We must then assess the likelihood that our deferred tax assets
will be recovered from future taxable income and to the extent we believe that
recovery is not likely, we must establish a valuation allowance. Given that we
have incurred yearly losses since inception and therefore, have not been
required to pay income taxes, we have established a valuation allowance for the
entire amount of our deferred tax assets at December 31, 2002. In the event that
we are able to realize our deferred tax assets in the future, an adjustment to
the valuation allowance would increase income in the period that this is
determined.

Recently Issued Accounting Pronouncements

In December 2002, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 148 ("SFAS 148"),
"Accounting for Stock-Based Compensation - Transition and Disclosure."
 SFAS 148 amends the Statement of Financial Accounting Standards Statement
No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation."
Although the standard does not require use of fair value method of accounting
for stock-based employee compensation, it does provide alternative methods of
transition. It also amends the disclosure provisions of SFAS 123 and APB Opinion
No. 28 ("APB 28"), "Interim Financial Reporting," to require
disclosure in the summary of significant accounting policies of the effects of
an entity's accounting policy with respect to stock-based employee compensation
on reported net income and earnings per share in annual and interim consolidated
financial statements. These amended transition and annual disclosure
requirements are effective for interim periods and fiscal years ending after
December 15, 2002.
The company expects to adopt SFA 148 in 2003, but has not determined
what effect it will have on the Company's earnings and financial position.

Net Revenues

Net revenues are derived from the sale of advertising on our Web
sites, licensing of our content, distribution of television and radio
broadcasts, subscription sales of Hulbert Financial Digest and IDC products,
fees from our membership center and the sale of news to IDC, CBS and other
customers.  Net revenues decreased by 3% to $44.5 million for the year ended
December 31, 2002 from $45.9 million for the year ended December 31, 2001. The
decrease is primarily a result of a reduction in online advertising revenue,
which was partially offset by an increase in subscription, radio and television
revenue. Online advertising revenue declined due to a decrease in the number of
advertisers on our Web sites and smaller advertising buys from some existing
customers. Spending by our customers on Web advertising has primarily decreased
in response to generally uncertain economic conditions. The increase in
subscription revenue was due to the acquisition of the Hulbert Financial Digest
in April 2002 and its related revenue stream.  Radio and television advertising
revenue increased due to an improvement in rates charged for advertising
sold.

Net revenues decreased by 15% to $45.9 million for the year ended December
31, 2001 from $53.9 million for the year ended December 31, 2000. The decrease
is primarily a result of a reduction in advertising revenue, which was partially
offset by an increase in licensing revenue. Advertising revenue declined due to
a decrease in the number of advertisers on our Web sites and smaller advertising
buys from some existing customers. Spending by our customers on Web advertising
has primarily decreased in response to generally uncertain economic conditions.
The increase in license revenue was caused by several interrelated factors,
including the increase in the number of licensees, increase in license products
available, and increased size and productivity of our sales force.

Substantially all of our advertising customers purchase advertising
under short-term contracts. Customers can and have ceased 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 significant amount of our future
net revenues from selling advertisements. The market for Web advertising is
intensely competitive and has experienced a significant softening in demand.
Therefore, 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 for any reason, future
revenues could be adversely affected.

License revenues depend on customer contract renewals and could decrease if
customers choose to renew for lesser amounts, terminate early or forego renewal,
or we do not obtain new customers. A significant amount of our license revenue
is earned from brokerages and financial services companies, which have
experienced hardship due to the recent economic downturns. The amount of license
revenues depends, in part, 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 revenues could also be limited as there are
a limited number of brokerages and financial services companies to license our
content. 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.

Net revenues in future periods remain uncertain due to the weakened economy.

Cost of Net Revenues

Cost of net revenues primarily consists of news staff
compensation, royalties payable to CBS and content providers, bandwidth costs
associated with serving pages on our Web properties and licensing clients, fees
paid for data, Web site infrastructure costs, costs of serving ads, exchange
fees and communication lines and costs related to subscriptions, including
printing and mailing costs.  Cost of net revenues decreased by 12% to $16.3
million for the year ended December 31, 2002 from $18.6 million for the year
ended December 31, 2001, and by 11% for the year ended December 31, 2001 from
$21.0 million for the year ended December 31, 2000. As a percentage of net
revenues, cost of net revenues were 37%, 41% and 39% for the years ended
December 31, 2002, 2001 and 2000, respectively.  Cost of net revenues decreased
in 2002 from 2001 primarily due to the decrease in online advertising serving
costs from the implementation of an in-house ad serving solution, and a decrease in
bandwidth costs and in data source fees from the negotiation of new
contracts. Cost of net revenues decreased in 2001 from 2000 primarily due to the
decrease in news production personnel and CBS production costs and the
royalties' payable due to CBS resulting from decreased revenues.

Product Development

Product development expenses primarily consist of data source
fees, compensation and benefits for Web site developers, designers and engineers
to maintain the sites and software engineers, and expenses for contract
programmers and developers.Product development expenses
decreased by 16% to $7.0 million for the year ended December 31, 2002 from $8.3
million for the year ended December 31, 2001, and decreased by 5% for the year
ended December 31, 2001 from $8.7 million for the year ended December 31,
2000.As a percentage of net revenues, product development
expenses were 16%, 18% and 16% for the years ended December 31, 2002, 2001 and
2000, respectively.  Product development expenses decreased in 2002 from 2001
primarily due to a reduction in headcount, data source fees and equipment costs.
Product development expenses decreased in 2001 from 2000 primarily due to a
reduction in headcount and data source fees.

General and Administrative

General and administrative expenses primarily consist of
compensation and benefits for finance, business development and administrative
personnel, public company expenses, professional fees, corporate depreciation
charges and charges for bad debt. General and administrative expenses decreased
by 10% to $11.3 million for the year ended December 31, 2002 from $12.6 million
for the year ended December 31, 2001, and decreased by 11% for the year ended
December 31, 2001 from $14.2 million for the year ended December 31, 2000.  As a
percentage of net revenues, general and administrative costs were 25%, 28% and
26% for the years ended December 31, 2002, 2001 and 2000, respectively.  General
and administrative expenses decreased in 2002 from 2001 primarily due to a
reduction in bad debt expense from improved aging of accounts receivable,
decreased use of temporary help and a decrease in equipment expenses.  General
and administrative expenses decreased in 2001 from 2000 due primarily to a
reduction in headcount, legal, travel and consulting expenses.

Sales and Marketing

Sales and marketing expenses primarily consist of non-cash
promotion and advertising provided by CBS, online and offline advertisements,
promotional materials, compensation, benefits and sales commissions to our
direct sales force and marketing personnel. Sales and marketing expenses
decreased by 32% to $20.3 million for the year ended December 31, 2002 from
$30.0 million for the year ended December 31, 2001, and decreased by 36% for the
year ended December 31, 2001 from $47.1 million for the year ended December 31,
2000.  As a percentage of net revenues, sales and marketing expenses were 46%,
65% and 88% for the years ended December 31, 2002, 2001 and 2000, respectively.
Sales and marketing expenses decreased in 2002 from 2001 due to a decrease in
CBS in-kind advertising, cash advertising spending, travel and related expenses
and commissions due to lower sales. Sales and marketing expenses decreased in
2001 from 2000 due to similar factors.

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. Non-cash advertising expense relating to services provided by CBS
was $9.8 million, $11.6 million and $17.4 million for the years ended December
31, 2002, 2001 and 2000, respectively.

Amortization of Intangibles

Of the $157.5 million purchase price for BigCharts, Inc., $152.5
million was allocated to goodwill, which was being amortized over 3 years, and
$3.6 million was allocated to intangible assets, which was being amortized over
periods ranging from 1.5 to 3.5 years. The adoption of FAS 142 on January 1,
2002 resulted in the cessation of amortization of our goodwill balance.  From
this date, we were required to periodically evaluate goodwill for impairment.
Had amortization of our goodwill balance continued, we would have recorded a
charge of $21.2 million in 2002.

2001 Restructuring Plan

In response to the continuing economic slowdown, we implemented a plan in
the second quarter of 2001 to reduce costs and improve operating efficiencies by
discontinuing initiatives and enhancements of our wireless and broadband
businesses. We recorded a restructuring charge of $1.4 million consisting
primarily of severance and benefits of $300,000 related to the involuntary
termination of approximately 35 employees; lease costs of $510,000 pertaining to
the estimated future obligations for non-cancelable lease payments for excess
facilities in California, New York and Minnesota that were vacated due to the
reductions in workforce; write-off of leasehold improvements, furniture and
fixtures, software and computer equipment with a net book value totaling
$530,000; and legal and consulting costs of $70,000 related to the
restructuring. At December 31, 2002, we had $110,000 remaining in our
restructuring accrual.

Interest Income

Interest income of $710,000 for the year ended December 31, 2002
decreased 56% from the prior year as a result of lower returns on investments.
Interest income of $1.6 million for the year ended December 31, 2001 decreased
30% from the prior year due to continued depletion of cash in 2001 and lower
returns on investments.  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.

Loss in Joint Venture

On October 2, 2001, we signed a non-binding memorandum of
understanding, or MOU, to transfer our ownership in FTMarketwatch.com to the
Financial Times Group, thereby eliminating the joint venture relationship. Prior
to the signing of the MOU, we recorded 50% of the loss incurred by
FTMarketWatch.com based on our ownership in the joint venture through August 31,
2001. In November 2001, we signed the purchase and sale agreement finalizing the
transfer of our ownership in the joint venture to the Financial Times Group.  As
part of the ownership transfer, we signed a transitional services agreement with
the Financial Times Group under which we would migrate the technology developed
for the joint venture Web site to the Financial Times Group for a fee.  The
agreement also assigned certain equipment to us that was owned by the joint
venture.  In addition, we signed a license agreement with the Financial Times
Group under which we will provide content and tools for a monthly fee.  Our
portion of the loss related to the joint venture for the years ended December
31, 2001 and 2000 was $1.5 million and $5.0 million, respectively. Since we no
longer had a commitment to fund the joint venture, we reversed previously
recorded losses of $645,000 during the three months ended September 30,
2001.

Liquidity and Capital Resources

Since inception, we have funded our operations primarily from cash
contributed and advanced by IDC and CBS, revenues from advertising and license
sales and the proceeds of our initial public offering. At December 31, 2002,
cash and cash equivalents totaled $43.3 million compared to $37.6 million at
December 31, 2001 and $45.4 million at December 31, 2000.

Cash provided by operating activities was $7.3 million for the year ended
December 31, 2002.  The cash provided in 2002 was primarily due to the net loss
of $9.7 million, offset by non-cash charges of $4.8 million in depreciation and
amortization of property and equipment and $9.8 million in advertising provided
by CBS.  Significant sources of cash from operations for the year ended December
31, 2002 included a decrease in accounts receivable, partially offset by a
decrease in accounts payable and accrued expenses.  We recognized $483,000 in
barter revenue and marketing expense for the year ended December 31, 2002.

Cash used in operating activities was $2.3 million for the year ended
December 31, 2001.  The cash used in 2001 was primarily due to the net loss of
$76.5 million, offset by non-cash charges of $57.7 million in depreciation and
amortization of property and equipment and goodwill and intangibles, $11.6
million in advertising provided by CBS, the loss in the joint venture of $1.5
million and bad debt expense of $1.0 million.  Significant sources of cash from
operations for the year ended December 31, 2001 include a decrease in accounts
receivable and prepaid expenses and other assets, partially offset by a decrease
in accounts payable and accrued expenses.  We recognized $1.5 million in barter
revenue and marketing expense for the year ended December 31, 2001.



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 non-cash 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 for 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, an increase in headcount and
related expenses and an increase in accounts receivable, partially offset by an
increase in accounts payable and accrued expenses. We recognized $508,000 in
barter revenue and marketing expense for the year ended December 31, 2000.

Cash used in investing activities was $2.1 million for the year ended
December 31, 2002 and consisted primarily of capital expenditures and the
purchase of the Hulbert Financial Digest.  Capital expenditures have generally
consisted of purchases of computer hardware and software and leasehold
improvements related to leased facilities.

Cash used in investing activities was $5.9 million for the year ended
December 31, 2001 and consisted primarily of additional 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.

Cash used in investing activities was $9.2 million for the year ended
December 31, 2000 and consisted primarily of an investment in our joint venture
and capital expenditures, partially offset by the sale of short-term
investments.

Cash provided by financing activities was $456,000 and $517,000 for the years
ended December 31, 2002 and 2001, respectively, and primarily reflects the
proceeds from the employee stock purchase plan and stock option exercises
throughout the respective years.

Cash provided by financing activities was $57.7 million for the year ended
December 31, 2000 and primarily reflected the proceeds from the additional cash
contribution from CBS and IDC.  In May 2000, we issued 1,136,814 shares of our
common stock to IDC 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 two years ended May 2002.

Contractual Obligations and Commercial Commitments

We incur various contractual obligations and commercial commitments in
our normal course of business.  Such obligations and commitments consist of the
following as of December 31, 2002:

Operating lease obligations - We have various operating leases
covering facilities in San Francisco, California, Minneapolis, Minnesota, New
York, New York, Washington DC, Los Angeles, California, Chicago, Illinois, and
Dallas, Texas.  Commitments under noncancellable operating leases totaled $11.3
million through December 31, 2010.

Commercial commitments - We are committed to pay $1.5 million to AOL
over the next two years.  AOL has a unilateral right to cancel the agreement in
November 2003.  If AOL cancels the agreement in 2003, our commitment would be
reduced to $842,000.

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. We are unable to predict whether and when
any prospective acquisition will become available or the likelihood that any
acquisition will be completed and successfully integrated.  Further, we cannot
assure you that additional financing will be available to us in any required
time frame on commercially reasonable terms, if at all.  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 respective stockholders' agreement, 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, 2002, 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                                                                         | 48  
|Consolidated Balance Sheets as of December 31, 2002 and 2001                                              | 49  
|Consolidated Statements of Operations for the years ended
  
 December 31, 2002, 2001 and 2000            | 50  
|Consolidated Statements of Stockholders' Equity for the years
  
 ended  December 31, 2002, 2001 and 2000 | 51  
|Consolidated Statements of Cash Flows for the years ended
  
 December 31, 2002, 2001 and 2000            | 52  
|Notes to Consolidated Financial Statements                                                                | 53  

---

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, 2002 and
2001, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2002 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.

As discussed in Note 10 to the consolidated financial statements, the Company
changed its method of accounting for goodwill and other intangible assets during
2002 in accordance with Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets."

PricewaterhouseCoopers LLP



San Francisco, California
January 27, 2003

---





MARKETWATCH.COM, INC.
CONSOLIDATED BALANCE SHEETS





`December 31,
                                                           ----------------------
                                                              2002        2001
                                                           ----------  ----------
                         ASSETS
Current assets:
  Cash and cash equivalents.............................. $   43,328  $   37,637
  Accounts receivable, net of allowances for bad
    debts of $450 and $752 at December 31, 2002
    and 2001, respectively...............................      5,364       8,263
  Prepaid expenses.......................................        696         756
                                                           ----------  ----------
          Total current assets...........................     49,388      46,656
Property and equipment, net..............................      6,680       9,533
Goodwill, net............................................     22,429      21,179
Other assets.............................................        148         145
                                                           ----------  ----------
          Total assets................................... $   78,645  $   77,513
                                                           ==========  ==========

          LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable....................................... $    3,198  $    4,004
  Accrued expenses.......................................      4,233       4,162
  Deferred revenue.......................................        917         296
                                                           ----------  ----------
          Total current liabilities......................      8,348       8,462
                                                           ----------  ----------
Commitments and contingencies (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;
    17,060,711 shares and 16,741,530  shares issued and out-
    standing at December 31, 2002 and 2001, respectively.        171         168
  Additional paid-in capital.............................    320,993     319,940
  Contribution receivable................................        (56)     (9,899)
  Accumulated deficit....................................   (250,811)   (241,158)
                                                           ----------  ----------
          Total stockholders' equity ....................     70,297      69,051
                                                           ----------  ----------
          Total liabilities and stockholders' equity..... $   78,645  $   77,513
                                                           ==========  ==========`

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



---

MARKETWATCH.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)



`Years ended December 31,
                                   ----------------------------------
                                      2002        2001        2000
                                   ----------  ----------  ----------

Net revenues:
  Online Advertising............. $   16,036  $   17,988  $   34,952
  Licensing......................     24,631      24,775      15,809
  Other..........................      3,857       3,093       3,146
                                   ----------  ----------  ----------
       Total net revenues........     44,524      45,856      53,907
Cost of net revenues.............     16,339      18,623      21,012
                                   ----------  ----------  ----------
       Gross profit..............     28,185      27,233      32,895
                                   ----------  ----------  ----------
Operating expenses:
  Product development............      6,954       8,308       8,725
  General and administrative.....     11,315      12,600      14,211
  Sales and marketing............     20,279      29,975      47,130
  Amortization of goodwill
    and intangibles..............          -      51,542      51,382
  Restructuring costs............          -       1,409           -
                                   ----------  ----------  ----------
       Total operating expenses..     38,548     103,834     121,448
                                   ----------  ----------  ----------
          Loss from operations...    (10,363)    (76,601)    (88,553)
   Interest income...............        710       1,554       2,285
   Loss in joint venture.........          -      (1,476)     (4,995)
                                   ----------  ----------  ----------
       Net loss.................. $   (9,653) $  (76,523) $  (91,263)
                                   ==========  ==========  ==========
Basic and diluted net loss per
  share.......................... $    (0.57) $    (4.60) $    (5.83)
                                   ==========  ==========  ==========
Shares used in the calculation of
  basic and diluted net loss
  per share......................     16,959      16,648      15,659
                                   ==========  ==========  ==========`

The accompanying notes are an integral part of these
consolidated 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
                                -----------  -------  ----------  ---------  ----------  ------------  ----------
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

Issuance of common stock
  upon exercise of  options....     60,962        1          79                                               80
Issuance of common stock
  through employee stock
  purchase plan................    139,165        1         436                                              437
Advertising received from CBS..                                                 11,640                    11,640
Net loss.......................                                                              (76,523)    (76,523)
                                -----------  -------  ----------  ---------  ----------  ------------  ----------
Balances, December 31, 2001.... 16,741,530      168     319,940          -      (9,899)     (241,158)     69,051

Issuance of common stock
  upon exercise of  options....     18,491        -          67                                               67
Issuance of common stock
  through employee stock
  purchase plan................    162,039        2         387                                              389
Issuance of common stock upon
  acquisition of Hulbert
  Financial Digest.............    138,651        1         599                                              600
Advertising received from CBS..                                                  9,843                     9,843
Net loss.......................                                                               (9,653)     (9,653)
                                -----------  -------  ----------  ---------  ----------  ------------  ----------
Balances, December 31, 2002.... 17,060,711  $   171  $  320,993  $       -  $      (56) $   (250,811) $   70,297
                                ===========  =======  ==========  =========  ==========  ============  ==========`

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

---



MARKETWATCH.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)



`Years ended December 31,
                                               -------------------------------
                                                 2002       2001       2000
                                               ---------  ---------  ---------
Cash flows provided by (used in)operating
  activities:
  Net loss................................... $  (9,653) $ (76,523) $ (91,263)
  Adjustments to reconcile net loss to net
   cash provided by (used in)
   operating activities:
     Provision for bad debt..................         -      1,020      1,046
     Depreciation and amortization...........     4,753     57,713     56,196
     Loss in joint venture...................         -      1,476      4,995
     Noncash charges from stockholder........     9,843     11,640     17,413
     Changes in operating assets
      and liabilities:
       Accounts receivable...................     2,978      2,555     (4,811)
       Prepaid expenses and other
          assets.............................        73      2,160        684
       Accounts payable and
          accrued expenses...................      (746)    (2,469)     3,272
       Deferred revenue......................        74        108       (156)
                                               ---------  ---------  ---------
          Net cash provided by (used in)
           operating activities..............     7,322     (2,320)   (12,624)
                                               ---------  ---------  ---------

Cash flows used in investing activities:
  Sale of short-term investments.............         -          -      4,979
  Purchase of property and equipment.........    (1,856)    (4,440)    (9,210)
  Acquisition of business, net
     of cash acquired........................      (231)         -          -
  Investment in joint venture                         -     (1,476)    (4,995)
                                               ---------  ---------  ---------
          Net cash used in investing
           activities........................    (2,087)    (5,916)    (9,226)
                                               ---------  ---------  ---------

Cash flows provided by financing activities:
  Issuance of common stock...................       456        517     57,706
                                               ---------  ---------  ---------
    Net cash provided by financing activities       456        517     57,706
                                               ---------  ---------  ---------
Net change in cash...........................     5,691     (7,719)    35,856
Cash and cash equivalents,
  at beginning of period.....................    37,637     45,356      9,500
                                               ---------  ---------  ---------
Cash and cash equivalents, at end of period.. $  43,328  $  37,637  $  45,356
                                               =========  =========  =========

Supplemental non-cash financing activities:
  Common stock issued for acquisition of
  business................................... $     600          -          -`



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

---



Note 1 - Organization and Nature of Business

The Company

MarketWatch.com, Inc. (the "Company"), a leading multimedia source of
financial news and information, 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"), now known as Interactive Data Corporation
("IDC"), and CBS Broadcasting Inc. ("CBS"), 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 cash and DBC's existing
"Online/News" business, which primarily consisted of customer contracts and
intellectual property, and 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. Subsequently, the $50.0 million rate card amount was revised
to $30.0 million upon completion of the Company's 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, until October 29, 2005, subject to
termination on the occurrence of certain events. Subsequently, the 30% royalty
was decreased to 8% (see Note 3).  In addition, the Company entered into a
services agreement with DBC (the "Services Agreement") on October 29, 1997 under
which DBC charged 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.

On January 6, 2000, the Company entered into a joint venture agreement with
the Financial Times Group, a part of Pearson plc, a British media company
("Pearson") 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 contributed trademarks for an ongoing royalty fee, provided 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 recorded 50% of the loss incurred by FT MarketWatch.com
based on our ownership percentage and accounted for the joint venture under the
equity method.

In October 2001, the Company signed a non-binding memorandum of understanding
("MOU") to transfer its ownership of the joint venture to the Financial Times
Group.  Since the Company no longer had a commitment to fund the joint venture,
previously recorded losses of $645,000 were reversed during the three months
ended September 30, 2001.  In November 2001, the Company completed the sale and
purchase agreement finalizing the transfer of ownership in the joint venture to
the Financial Times Group.  As part of the ownership transfer, the Company
signed a transitional services agreement with the Financial Times Group under
which the Company would migrate the technology developed for the joint venture
Web site to the Financial Times Group for a fee.  The agreement also assigned
certain equipment to the Company that was owned by the joint venture.  In
addition, the Company signed a license agreement with the Financial Times Group
under which it will provide content and tools for a monthly fee.  The total
contributions to the joint venture for the years ended December 31, 2001 and
2000 were $1.5 million and $5.0 million, respectively.

On May 5, 2000, the Company issued 1,136,814 shares of the Company's common
stock to 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,
expiring May 5, 2002.  The remaining $56,000 of rate card advertising and
promotion from CBS has been extended through April 25, 2003.

In January 2001, an affiliate of Pearson acquired Data Broadcasting
Corporation's 34.1 % stake in the Company.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

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 consolidated financial statements include the accounts of MarketWatch.com
and its wholly owned subsidiary.  All significant intercompany balances and
transactions have been eliminated.

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect amounts
reported in the consolidated 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, membership fees, and subscription
products.

Advertising revenues, derived from the sale of advertisements and
sponsorships on the Company's Web sites, are 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 consist of fixed monthly amounts
related to the license of financial tools and news content that are recognized
ratably over the term of the licensing agreement or amounts based on the number
of qualified account holders.

Other revenues consist of revenue from the Company's television and radio
shows, membership center revenues, 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 and
Westwood One of advertising space during its television and radio programming,
respectively. 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.  Membership center revenues consist of fees
for leads generated from promotions placed in the membership center section of
the Company's Web site.  Membership center customers pay MarketWatch a fixed fee
for each customer that comes to their site and registers for their product from
the Company's Web site.Revenue from the
membership center is recognized in the month the leads are generated.
Subscription revenue relates to customer subscriptions to the Hulbert Financial
Digest, a publication devoted to tracking and analyzing investment newsletters,
and the IDC 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 prepayments of
license and advertising contracts and subscription fees for which amounts have
been collected but for which revenue has not been recognized.

Revenues from barter transactions, in accordance with the provisions of
Accounting Principles Board Opinion No. 29 ("APB 29"),
"Accounting for Nonmonetary Transactions," 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 years ended December 31, 2002,
2001 and 2000, the Company recognized $483,000, $1.5 million and $508,000,
respectively, in barter revenue.

The Company did not record barter revenue and the related expenses for
advertising provided to AOL under an agreement in accordance with Emerging
Issues Task Force 99-17, ("EITF 99-17") "Accounting for
Advertising Barter Transactions".  Under the provisions of EITF 99-17,
revenue and expense should be recognized at fair value from an advertising
barter transaction only if the fair value of the advertising surrendered in the
transaction is determinable based on the entity's own historical practice of
receiving cash, marketable securities, or other consideration that is readily
convertible to a known amount of cash for similar advertising from buyers
unrelated to the counterparty in the barter transaction.  Since these criteria
were not met with respect to the Company's barter agreement with AOL, the
Company did not recognize revenue.

Cash and Cash Equivalents

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



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 and amortization expense relating to property and equipment for the
years ended December 31, 2002, 2001 and 2000 was $4.8 million, $5.1 million and
$3.3 million, respectively.

Intangible Assets and Goodwill

On January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and
other Intangible Assets" and ceased amortization of the Company's goodwill
balance.  In lieu of amortization, the Company was required to perform an
impairment review of its goodwill balance upon the initial adoption of SFAS
No. 142 and, thereafter, periodically evaluate goodwill for impairment.
The Company will use a two-step process to evaluate impairment.  The first step
is to identify a potential impairment by comparing the fair value of the Company
to the carrying value, including goodwill.  The second step of the goodwill
impairment test measures the amount of the impairment loss (measured as of the
beginning of the year of adoption), if any.  The Company has completed the
impairment review under SFAS No. 142 and has determined that an adjustment for
impairment will not be required.

Amortization of goodwill and intangibles for the years ended December 31,
2002, 2001 and 2000 was $0, $52.0 million and $52.4 million, respectively, of
which $0, $416,000 and $1.0 million, respectively, was included in cost of
sales.

Net Loss per Share

The Company computes net loss per share in accordance with the
provisions of Statement of Financial Accounting Standards No. 128 ("SFAS 128"),
"Earnings per Share" 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 are
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 anti-dilutive.

Options to purchase 3,281,723, 1,828,026, and 3,033,537 shares of common
stock were outstanding at December 31, 2002, 2001 and 2000, 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 are 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).  Advertising expense for
the years ended December 31, 2002, 2001 and 2000 were $11.0 million, $15.1
million and $26.3 million, respectively.

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 six
financial institutions. Management periodically performs credit evaluations of
its customers' financial condition and generally does not require collateral on
accounts receivable. As of December 31, 2002, 2001 and 2000, none of the
Company's customers accounted for 10% or more of its gross accounts receivable.
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
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income," which establishes standards for reporting comprehensive income and its
components in consolidated 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,
2002, 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 ("APB No.25"), "Accounting for Stock Issued to Employees" and its
related interpretations 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."

The following table illustrates the effect on income from continuing
operations and earnings per share if the Company had applied the fair-value
recognition provisions of SFAS No. 123 to stock-based employee compensation.
The estimated fair value of each Company option is calculated using the
Black-Scholes option-pricing model.

`Year ended December 31,
                                               ------------------------------------
                                                  2002        2001          2000
                                               ----------  ----------    ----------
Net loss:
  As reported................................ $   (9,653) $  (76,523)   $  (91,263)
  Stock-based employee compensation expense
    determined under fair value based method. $   (3,964)     (3,692)      (13,927)
                                               ==========  ==========    ==========
  Pro forma.................................. $  (13,617) $  (80,215)   $ (105,190)
                                               ==========  ==========    ==========
Net loss per share:
  As reported................................ $    (0.57) $    (4.60)   $    (5.83)
                                               ==========  ==========    ==========
  Pro forma.................................. $    (0.80) $    (4.82)   $    (6.72)
                                               ==========  ==========    ==========`

The Company calculated the fair value compensation expense associated
with its stock-based employee compensation plans using the Black-Scholes model.
The following assumptions were used for valuing option grants for the years
ended December 31, 2002, 2001 and 2000: no dividend yield, weighted-average
expected option term of four years, risk-free interest rates of 3.4%, 4.2% and
4.2%, respectively, and volatility factors of 105%, 115% and 108%, respectively.
The assumptions used related to calculating compensation expense associated with
the Purchase Plan for the years ended December 31, 2002, 2001 and 2000 were: no
dividend yield, weighted-average term of six months, risk-free interest rates of
1.8%, 2.6% and 6.2%, respectively, and volatility factors of 105%, 115% and
118%, respectively.

According to the Black-Scholes option-pricing model, the weighted-average
estimated fair value of employee stock option grants during 2002, 2001 and 2000
was $2.93, $2.44, and $15.66 per option, respectively, and the weighted-average
fair value of shares granted under the Purchase Plan for the years ended
December 31, 2002, 2001 and 2000 was $2.40, $2.37 and $5.51, respectively.

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's stock options have characteristics significantly different from
those of traded options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the fair
value of its stock options.

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.

Recently Issued Accounting Pronouncements

In December 2002, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 148 ("SFAS 148"),
"Accounting for Stock-Based Compensation - Transition and Disclosure."
 SFAS 148 amends the Statement of Financial Accounting Standards Statement
No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation."
Although the standard does not require use of fair value method of accounting
for stock-based employee compensation, it does provide alternative methods of
transition. It also amends the disclosure provisions of SFAS 123 and APB Opinion
No. 28 ("APB 28"), "Interim Financial Reporting," to require
disclosure in the summary of significant accounting policies of the effects of
an entity's accounting policy with respect to stock-based employee compensation
on reported net income and earnings per share in annual and interim consolidated
financial statements. These amended transition and annual disclosure
requirements are effective for interim periods and fiscal years ending after
December 15, 2002. The Company will adopt this standard for its first quarter of
fiscal year 2003.

Note 3 - Agreements with CBS and Pearson

In January 1999, the Company entered into a Stockholders' Agreement
("Stockholders' Agreement") with CBS and IDC 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, which acquired IDC's 34.1% stake in the Company (see Note 1), 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"), which became effective
immediately prior to the initial public offering. 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 (as defined below) 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 the Company's 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 certain revenues including those from Pearson, 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 IDC entered into an Amended and Restated
Services Agreement (the "Amended Services Agreement"), in which IDC would
provide 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 IDC to grant the Company certain nonexclusive licenses to
its data and information feeds and provides for certain network Web site hosting
performance standards. IDC also paid 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 IDC subscribers, as
defined. The Company is also required to pay IDC 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 Pearson entered into a Registration
Rights Agreement ("Registration Agreement"). CBS and Pearson, and their
affiliates and permitted transferees, were given certain registration rights for
the securities of the Company held by them under the Registration Agreement.

In October 1999, CBS committed to provide advertising and promotions over
a five-year period in return for its ownership position (see Note 1). 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 initial public offering.  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 April 25, 2003.  As of December 31, 2002, CBS had delivered
$29.9 million rate card amount of promotion and advertising under this
commitment.

Note 4 - Balance Sheet Components

`Years ended
                                                             December 31,
                                               -----------------------------------
                                                  2002         2001        2000
                                               -----------  -----------  ---------
Balance at beginning of period............... $       752  $       628  $     280
Charged to expenses..........................           -        1,020      1,046
Write-offs, net of recoveries................        (302)        (896)      (698)
                                               -----------  -----------  ---------
Balance at end of period..................... $       450  $       752  $     628
                                               ===========  ===========  =========`

Prepaid expenses were as follows (in thousands):

`December 31,
                                               ------------------------
                                                  2002         2001
                                               -----------  -----------
Prepaid marketing............................ $       239  $       552
Other........................................         457          204
                                               -----------  -----------
                                              $       696  $       756
                                               ===========  ===========`



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

`December 31,
                                               ------------------------
                                                  2002         2001
                                               -----------  -----------
Computers and equipment...................... $    12,288  $    11,767
Leasehold improvements.......................       5,931        5,712
Furniture and fixtures.......................       2,126        2,126
                                               -----------  -----------
                                                   20,345       19,605
Less accumulated depreciation and
  amortization...............................     (13,665)     (10,072)
                                               -----------  -----------
       Total property and equipment, net..... $     6,680  $     9,533
                                               ===========  ===========`

Accrued expenses were as follows (in thousands):

`December 31,
                                               ------------------------
                                                  2002         2001
                                               -----------  -----------
Accrued television production................ $       661  $       715
Accrued royalty..............................         807          812
Accrued compensation.........................       1,432        1,258
Restructuring accrual........................         110          345
Deferred rent................................         745          530
Accrued other................................         478          502
                                               -----------  -----------
                                              $     4,233  $     4,162
                                               ===========  ===========`

Note 5 - Income Taxes

`Years ended
                                                             December 31,
                                               -----------------------------------
                                                  2002         2001        2000
                                               -----------  -----------  ---------
Deferred tax assets:
  Net operating loss carryforwards........... $    40,107  $    37,446  $  29,695
  Property and equipment.....................       3,595        3,377      1,281
  Accruals and reserves......................       1,062          704        443
                                               -----------  -----------  ---------
Total deferred tax assets....................      44,764       41,527     31,419

Deferred tax liabilities:
  Intangible assets..........................           -         (115)      (449)
                                               -----------  -----------  ---------
Net deferred tax asset.......................      44,764       41,412     30,970
  Less valuation allowance...................     (44,764)     (41,412)   (30,970)
                                               -----------  -----------  ---------
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 years ended
December 31, 2002, 2001 and 2000 increased by $3.4 million, $10.4 million, and
$15.7 million, respectively.

At December 31, 2002, the Company had federal and state net operating loss
carry-forwards of approximately $105.1 million and $75.0 million, respectively,
available to offset future regular taxable income.  The Company's net operating
loss carryforwards expire on various dates after the year 2004 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.  The amount of such
limitations, if any, has not been determined.

Deferred tax assets and related valuation allowances of approximately $23.0
million relate to certain U.S. operating loss carryforwards resulting from the
exercise of employee stock options, the tax benefit of which, when recognized,
will be accounted for as a credit to additional paid-in capital rather than a
reduction of the income tax provision.

The difference between the income tax benefit at the statutory rate of 34%
and the Company's effective tax rate was due primarily to the valuation
allowance established to offset the deferred tax asset.  The provision for
income tax was 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,
                                               ------------------------ ----------
                                                  2002         2001        2000
                                               -----------  -----------  ---------
Provision computed at federal statutory rate.         (34)%        (34)%      (34)
State taxes, net of federal benefit..........          (4)          (5)        (5)
Amortization of goodwill.....................           -           26         23
Other permanent differences..................           3           (1)        (1)
Tax losses not benefited...................            35           14         17
                                               -----------  -----------  ---------
Provision for income taxes...................           - %          - %        -
                                               ===========  ===========  =========`

Note 6 - Commitments and Contingencies

Leases

`Year ending December 31,
   2003..................................................      1,843
   2004..................................................      1,775
   2005..................................................      1,901
   2006..................................................      1,977
   2007..................................................      2,043
   Thereafter............................................      1,712
                                                           ----------
                                                          $   11,251
                                                           ==========`

Commitments

The Company has entered into employment agreements with eight of
its officers. These agreements expire through December 2004.  Such agreements
provide for annual salary levels ranging from $120,000 to $315,000, as well as
annual bonuses of up to 100% of the base salary.

As of December 31, 2002, the Company is committed to paying $1.5 million to
AOL over the next two years in fulfillment of an agreement.  AOL has the
unilateral right to cancel the agreement in November 2003.  If AOL cancels the
agreement in 2003, the Company's commitment would be reduced to $842,000.  Under
the agreement, the Company created a co-branded site that enables AOL members to
access CBS.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.

The Company maintains agreements with independent content providers for
certain news, stock quotes and other information. The terms of these agreements
are generally one to two years, 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.

Several plaintiffs have filed class action lawsuits in federal court against
the Company, certain of its current and former officers and directors and its
underwriters in connection with its January 1999 initial public offering.  The
complaints generally assert claims under the Securities Act, the Exchange Act
and rules promulgated by the Securities and Exchange Commission. The complaints
seek class action certification, unspecified damages in an amount to be
determined at trial, and costs associated with the litigation, including
attorneys' fees.  The Company believes that the lawsuits and claims asserted
against MarketWatch.com pursuant to these class action complaints are without
merit and intends to vigorously defend against these claims. The Company does
not believe that any of these legal proceedings will have a material adverse
effect on the Company's results of operations. However, due to the inherent
uncertainties of litigation, the Company cannot accurately predict the ultimate
outcome of the litigation.

Note 7 - Employee Benefit Plans

401K

The Company has a 401(k) deferred savings plan covering
substantially all employees.  Employee contributions were matched 25% by the
Company, up to a maximum of $2,500 per employee per year in 2002 and 33% up to a
maximum of $2,500 per year for 2001 and 2000.  Matching contributions by the
Company in the years ended December 31, 2002, 2001 and 2000 were approximately
$192,000, $348,000 and $327,000, 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 the Company's 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 14th and August 14th. 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.During the years ended December 31, 2002 and 2001,
162,039 and 139,165 shares, respectively, were purchased under the Purchase
Plan.  At December 31, 2002, 337,961 shares were available under the Purchase
Plan for future issuance.

Stock Option Plans

In 1998, the Board of Directors adopted the 1998 Equity Incentive Plan
(the "1998 Plan") and the 1998 Directors' Stock Option Plan (the "1998
Directors' Plan") and all outstanding employee options became part of the 1998
Plan. The 1998 Plan and 1998 Directors' Plan became effective upon the
completion of the Company's initial public offering. Stockholders have approved
both plans.  In each of the calendar years 2000 and 2002, the Board of Directors
reserved and stockholders subsequently approved an additional 1,500,000 shares
for issuance under the 1998 Plan.  In 2002, the Board of Directors reserved and
the stockholders subsequently approved an additional 50,000 shares for issuance
under the 1998 Directors plan.  To date, the Company has reserved an aggregate
of 4.65 million shares for issuance under both plans.

The 1998 Plan allows for the issuance of incentive stock options and
non-qualified stock options.  The 1998 Directors Plan allows for the issuance of
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 during 1999, the
Company assumed the BigCharts, Inc. 1995 Stock Plan (the "BigCharts Plan").
Options issued under the BigCharts Plan become exercisable over varying periods
as provided in the individual plan agreements. BigCharts had issued 585,824
shares under the BigCharts Plan.

In June 2001, the Company offered a voluntary stock option exchange program
that provided the Company's employees and directors the opportunity to cancel
certain stock options of the Company's common stock, in exchange for new options
to purchase 75% of the shares subject to the cancelled options six months and
one day after the options were cancelled. The new options would be granted on or
after January 19, 2002 at the then fair market value of the Company's common
stock. Options to purchase approximately 2.7 million shares were eligible for
the exchange program. On July 18, 2001, the Company cancelled options to
purchase approximately 989,000 shares, and granted new options to purchase
approximately 725,000 shares on January 22, 2002.

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

`Weighted
                                                           Average
                                              Options     Exercise
                                             Outstanding    Price
                                             ----------  -----------
Options outstanding, December 31, 1999.....  1,892,826  $     21.11

Options granted at fair value..............  1,666,838  $     20.80
Options cancelled..........................   (335,029) $     35.68
Options exercised..........................   (341,098) $      5.02
                                             ----------
Options outstanding, December 31, 2000.....  2,883,537  $     21.31

Options granted at fair value..............    572,010  $      3.17
Options cancelled.......................... (1,566,559) $     31.51
Options exercised..........................    (60,962) $      1.32
                                             ----------
Options outstanding, December 31, 2001.....  1,828,026  $      8.15

Options granted at fair value..............  1,617,318  $      4.04
Options cancelled..........................   (145,130) $      7.73
Options exercised..........................    (18,491) $      3.65
                                             ----------
Options outstanding, December 31, 2002.....  3,281,723  $      6.17
                                             ==========`

At December 31, 2002, 2001 and 2000, 1,203,569, 1,125,757 and 258,913 options
were available for future grant, respectively, and 1,429,107, 813,651 and
806,432 options were exercisable, respectively. The weighted average exercise
price and weighted average remaining contractual life of the vested options were
$8.66 and 8.16 years, respectively, at December 31, 2002; $9.80 and 8.08 years,
respectively, at December 31, 2001; and $13.18 and 8.62 years, respectively, at
December 31, 2000.

For the year ended December 31, 2000, the Company expensed $43,000 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 was
amortized over the three-year vesting period of the options.  There were no
amounts expensed related to deferred compensation for the years ended December
31, 2002 and 2001.

The following table summarizes information about options at December 31,
2002:

`Options
                                                       Options Outstanding                  Exercisable
                                             -----------------------------------------------------------
                                                          Weighted
                                                           Average    Weighted                 Weighted
                                               Number     Remaining    Average                  Average
                                                Out-     Contractual  Exercise     Number      Exercise
              Exercise Price                  standing      Life        Price    Exercisable     Price
-------------------------------------------  ----------  -----------  ---------  ----------    ---------
$1.32 - $1.32..............................     10,892         4.62  $    1.32      10,892    $    1.32
$1.74 - $3.91..............................  1,180,780         8.99  $    3.51     206,388    $    3.06
$3.95 - $6.00. ............................  1,735,152         7.94  $    4.15     894,495    $    4.14
$7.50 - $11.00.............................    102,965         5.34  $    8.42     101,070    $    8.37
$11.38 - $17.00............................     34,934         6.98  $   14.29      27,932    $   14.66
$18.81 - $26.00............................     75,840         7.38  $   24.13      50,557    $   24.13
$28.81 - $42.00............................    120,160         6.99  $   37.57     116,773    $   37.58
$49.19 - $74.00............................     21,000         6.65  $   55.64      21,000    $   55.64
                                             ----------              $           ----------   $
$1.32 - $74.00.............................  3,281,723         8.16  $    6.17   1,429,107    $    8.66
                                             ==========                          ==========`

The Company recorded amortization expense of  $370,000 for the year ended
December 31, 2000 in connection with stock options issued for services. 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 contracted option term of 10 years, risk free interest rate of
4.94%, and an expected volatility factor of 97%.  There were no amortization
expenses related to the issuance of stock options for services for the years
ended December 31, 2002 or 2001.

Note 8 - Related Party Transactions

Under its license agreement with CBS, the Company expensed $2.8 million,
$2.8 million, and $3.8 million for the years ended December 31, 2002, 2001 and
2000, respectively, related to licensing of CBS news content and trademarks. In
addition, the Company has recorded advertising expenses of $9.8 million, $11.6
million, and $17.4 million at rate card value for the years ended December 31,
2002, 2001 and 2000, respectively, for advertising and promotion provided by
CBS. Rental payments to CBS for leasing of certain facilities were $1.1 million,
$1.1 million, and $559,000 for the years ended December 31, 2002, 2001 and 2000,
respectively.

Licensing revenues from IDC were $1.0 million, $1.4 million, and $2.7 million
for the years ended December 31, 2002, 2001 and 2000, respectively. Licensing
revenues from FT.com and Financial Times, subsidiaries of Pearson, were $1.8
million, $1.3 million and $374,000 for the years ended December 31, 2002, 2001
and 2000, respectively.  The Company recognized costs to IDC of $641,000,
$934,000 and $452,000, for the years ended December 31, 2002, 2001 and 2000,
respectively, for data feeds.  In addition, the Company recognized revenue of
$2.2 million, $2.6 million and $2.6 million for the years ended December 31,
2002, 2001 and 2000, respectively, from television and radio programming on CBS
stations.  The Company recognized costs to CBS of $1.6 million, $1.5 million,
and $969,000 for the years ended December 31, 2002, 2001 and 2000, respectively,
for production of the television and radio programming.

IDC purchased $33,000, $123,000, and $298,000 for the years ended December
31, 2002, 2001 and 2000, respectively, of advertising under an insertion order.
In 2000 IDC provided certain general services including accounting, network
operations, hosting of the Company's Web pages and data feeds totaling $735,000.

At December 31, 2002 and 2001, $532,000 and $1.0 million, respectively, were
included in accounts receivable for radio and television revenue due from CBS;
$135,000 and $338,000, respectively, were included in accounts receivable for
license revenue due from IDC; and $0 and $406,000, respectively, were included
in total accounts receivable for license revenue due from FT.com and Financial
Times Information, Ltd.  At December 30, 2002 and 2001, the Company had a
liability of $807,000 and $812,000, respectively, owed to CBS for royalty fees
and a liability of $70,000 and $218,000, respectively, due to IDC for data
feeds.



Direct charges for subscription revenues for certain IDC data feeds were
$58,000 and $136,000 for the years ended December 31, 2002 and 2001,
respectively. Under the terms of the Amended and Restated Services Agreement,
IDC 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 $106,000 for the year ended
December 31, 2001.

An executive of the Company was also a member of the Board of Directors of
two customers. For the year ended December 31, 2000, an aggregate of $175,000 of
advertising revenues were attributable to these customers.

Note 9 - Restructuring Charges

In the second quarter of 2001, the Company implemented a plan to reduce
costs and improve operating efficiencies by discontinuing initiatives and
enhancements of our wireless and broadband businesses, and recorded a
restructuring charge of $1.4 million. The restructuring charge consisted
primarily of severance and benefits of $300,000 related to the involuntary
termination of approximately 35 employees; the estimated lease costs of $510,000
pertaining to future obligations for non-cancelable lease payments for excess
facilities; and the write-off of leasehold improvements, furniture and fixtures,
software and computer equipment with a net book value of $530,000. The assets
were taken out of service as they were deemed unnecessary due to the reductions
in workforce. In addition, the Company accrued for legal and consulting costs of
$70,000 related to the restructuring. As of December 31, 2002, the Company had
paid out $300,000 related to severance and employee costs, $412,000 related to
obligations under non-cancelable lease obligations, and $57,000 related to legal
and consulting costs.  At December 31, 2002, $110,000 remains to be paid out for
lease costs and other expenses. The remaining accrual will be paid in cash and
the restructuring will be complete by December 31, 2003.

Note 10 - Change in Accounting for Goodwill and Certain Other Intangibles

In accordance with SFAS No. 142, goodwill amortization was discontinued as of
January 1, 2002. The carrying amount of goodwill at December 31, 2002 totaled
$22.4 million. Supplemental comparative disclosure as if the change had been
retroactively applied to the prior year periods is as follows (in thousands,
except per share amounts):

`Years ended December 31,
                                               ------------------------------------
                                                  2002        2001          2000
                                               ----------  ----------    ----------
Reported net loss ........................... $   (9,653) $  (76,523)   $  (91,263)
Add back: Goodwill amortization..............          -      50,830        50,830
Add back:  Intangible amortization...........          -       1,130         1,555
                                               ----------  ----------    ----------
  Adjusted net loss.......................... $   (9,653) $  (24,563)   $  (38,878)

Basic and diluted net loss per share:

Reported net loss per share.................. $    (0.57) $    (4.60)   $    (5.83)
Goodwill amortization........................          -        3.05          3.25
Intangible amortization......................          -        0.07          0.10
                                               ----------  ----------    ----------

  Adjusted net loss per share................ $    (0.57) $    (1.48)   $    (2.48)
                                               ==========  ==========    ==========`

Note 11 - Comparative Quarterly Financial Data (unaudited)

`Quarter Ended
                                      ---------------------------------------------
                                      March 31    June 30   September 30  December 31
2002                                  ---------  ---------  ------------  -----------
-----
Net revenues.........................  $  9,816   $ 12,012   $ 10,982    $  11,714
Gross profit.........................  $  5,942   $  7,798   $  6,676    $   7,769
Net income (loss)....................  $ (5,651)  $ (4,132)  $   (724)   $     854
Net income (loss) per share, basic...  $  (0.34)  $  (0.24)  $  (0.04)   $    0.05
Net income (loss) per share, diluted.     (0.34)     (0.24)     (0.04)        0.05
Shares used in per share
   calculation, basic................    16,792     16,954     17,028       17,060
Shares used in per share
   calculation, diluted..............    16,792     16,954     17,028       17,488


                                                      Quarter Ended
                                      ---------------------------------------------
                                      March 31    June 30   September 30  December 31
2001                                  ---------  ---------  ------------  -----------
-----
Net revenues.........................  $ 11,813   $ 11,868   $ 10,528    $  11,647
Gross profit.........................  $  7,003   $  7,094   $  6,001    $   7,135
Net loss.............................  $(19,919)  $(19,711)  $(16,045)   $ (20,848)
Net Loss per share basic and diluted.  $  (1.20)  $  (1.19)  $  (0.96)   $   (1.25)
Shares used in per share
   calculation, basic and diluted....    16,573     16,607     16,678       16,733`

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 and will
be incorporated by reference herein from our definitive proxy statement pursuant
to Regulation 14A in connection with the Annual Meeting of Stockholders to be
held in May 2003.  The definitive proxy statement will be filed with the
Securities and Exchange Commission no later than 120 days after the end of the
fiscal year covered by this report.

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. Such information is incorporated herein by reference.

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 herein 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 herein by
reference.

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 herein by reference.

Item 14. Controls and Procedures

(a) Within 90 days prior to our filing of this annual report, we
carried out an evaluation, under the supervision and with the participation of
our Chief Executive Officer and Chief Financial Officer of the effectiveness of
the design and operation of our disclosure controls and procedures.  Based on
this evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective in timely
alerting them to material information required to be included in this annual
report.

(b) There have been no significant changes in our internal controls or in
other factors which could significantly affect internal controls subsequent to
our most recent evaluation of our internal controls.

PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-
K

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

1.   Consolidated financial statements (see index to Item 8).

2.   Financial Statement Schedules.

All 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.

1. 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.

1. Reports on Form 8-K.

None.

(c) Exhibits. See Item 15(a)(3) above.

(d) Consolidated financial statements. See Item 15(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 31st day of March, 2003.



| |                      
| | ---------------------
| | MarketWatch.com, Inc.

| |             
| | ------------
| | (Registrant)



| |     |                    
| | --- | -------------------
| | By: | /s/ LARRY S. KRAMER

| |                                     
| | ------------------------------------
| |                                     
| | Larry S. Kramer                     
| | Chief Executive Officer and Chairman
| | (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         Chief Executive Officer and Chairman March 31, 2003
--------------------------- (Principal Executive Officer)
Larry S. Kramer

/s/ JOAN P. PLATT           Chief Financial Officer and          March 31, 2003
--------------------------- Secretary (Principal Financial
Joan P. Platt               and Accounting Officer)


/s/ PETER GLUSKER           Director                             March 31, 2003
---------------------------
 Peter Glusker

/s/ CHRISTIE HEFNER         Director                             March 31, 2003
---------------------------
Christie Hefner

/s/ ANDREW HEYWARD          Director                             March 31, 2003
---------------------------
Andrew Heyward

/s/  PHILIP HOFFMAN         Director                             March 31, 2003
---------------------------
Philip Hoffman


/s/ ROBERT LESSIN           Director                             March 31, 2003
---------------------------
Robert Lessin

/s/ JOHN MAKINSON           Director                             March 31, 2003
---------------------------
John Makinson


/s/ JOHN MARCOM             Director                             March 31, 2003
---------------------------
John Marcom


/s/ RUSSELL I. PILLAR       Director                             March 31, 2003
---------------------------
Russell I. Pillar

/s/ JEFFREY RAYPORT         Director                             March 31, 2003
---------------------------
Jeffrey Rayport`

---



CERTIFICATION

I, Larry S. Kramer, certify that:

1.	I have reviewed this annualreport on Form 10-K of
MarketWatch.com, Inc.;

2.	Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annualreport;

3.	Based on my knowledge, the consolidated financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this annual
report;

4.	The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) 	designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) 	evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

c) 	presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5.	The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

a) 	all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) 	any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6. 	The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.



Date:  March 31, 2003

/S/ LAWRENCE S. KRAMER

Larry S. Kramer

Chief Executive Officer & Chairman

---

CERTIFICATION

I, Joan P. Platt, certify that:

1.	I have reviewed this annualreport on Form 10-K of
MarketWatch.com, Inc.;

2.	Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annualreport;

3.	Based on my knowledge, the consolidated financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this annual
report;

4.	The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) 	designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) 	evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

c) 	presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5.	The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

a) 	all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) 	any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6. 	The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.



Date:  March 31, 2003

/S/ JOAN P. PLATT

Joan P. Platt

Chief Financial Officer

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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.                                                                                                                                                  
|10.14          | [Reserved]                                                                                                                                                                                
|10.15          | [Reserved]                                                                                                                                                                                
|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* (11)    | Employment Agreement dated April 28, 1999, between the
Registrant and Scott Kinney.                                                                                                       
|10.24   (9)    | Memorandum of understanding by and between the Registrant,
Pearson International Finance Ltd. and FTMarketWatch (Europe) Ltd., dated
September 28, 2001.                                  
|10.25   (11)   | Joint venture sale and purchase agreement dated November 16,
2001 between Registrant and Pearson Internet Holdings BV.                                                                    
|10.26*   (12)  | Employment Agreement dated December 1, 2001 between the
Registrant and Kathy Yates.                                                                                                       
|10.27*   (12)  | Employment Agreement dated January 1, 2002 between the
Registrant and Scot McLernon.                                                                                                      
|10.28*   (12)  | Employment Agreement dated January 1, 2002 between the
Registrant and Dave Callaway.                                                                                                      
|10.29*   (12)  | Employment Agreement dated February 11, 2002 between the
Registrant and Jamie Thingelstad.                                                                                                
|10.30*         | Amended and Restated Employment Agreement dated as of March 10,
2003, between the Registrant and Joan Platt.                                                                              
|10.31*   (12)  | Amended and Restated Employment Agreement dated as of July 1,
2002, between the Registrant and Lawrence Kramer.                                                                           
|21.01   (10)   | 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 exhibit of the same number, filed with
the Registrant's Quarterly Report on Form 10Q (File No. 000-25113) filed with
the Securities and Exchange Commission on November 14, 2001.

(10)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.

(11) 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 April 1, 2002.

(12) Incorporated by reference to exhibit of the same number, filed with the
Registrant's Quarterly Report on   Form 10Q (File No. 000-25113) filed with the
Securities and Exchange Commission on November 14, 2002.

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