**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, 2001**

**OR**

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

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

**Commission file number 000-25113**

**MARKETWATCH.COM, INC.**
(Exact name of Registrant as Specified in its Charter)



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

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

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

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

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

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

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

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

As of March 20, 2002, the aggregate market value of voting stock held by
non-affiliates of the Registrant was $23,099,390.

The number of shares of the Registrant's Common Stock outstanding as of
March 20, 2002 was 16,839,746.

Documents incorporated by reference: portions of the registrant's proxy
statements for its 2002 annual meeting of stockholders are incorporated by
reference.







MARKETWATCH.COM, INC.
2001 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS







|**PART I.**                                                                                       | **Page**
|------------------------------------------------------------------------------------------------- | --------
|                                                                                                  |         
|Item 1.    Business                                                                               | 3       
|                                                                                                  |         
|Item 2.    Properties                                                                             | 28      
|                                                                                                  |         
|Item 3.     Legal Proceedings                                                                     | 28      
|                                                                                                  |         
|Item 4.     Submission of Matters to a Vote of Security Holders                                   | 28      
|                                                                                                  |         
|**PART II.**                                                                                      |         
|                                                                                                  |         
|Item 5.     Market for the Registrant's Common Equity and Related Stockholder
Matters             | 30      
|                                                                                                  |         
|Item 6.     Selected Financial Data                                                               | 32      
|                                                                                                  |         
|Item 7.    Management's Discussion and Analysis of Financial Condition and
Results of  Operations | 33      
|                                                                                                  |         
|Item 7A.  Quantitative and Qualitative Disclosures About Market Risks                             | 44      
|                                                                                                  |         
|Item 8.    Financial Statements and Supplementary Data                                            | 44      
|                                                                                                  |         
|Item 9.    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure   | 67      
|                                                                                                  |         
|**PART III.**                                                                                     |         
|                                                                                                  |         
|Item 10.   Directors and Executive Officers of the Registrant                                     | 67      
|                                                                                                  |         
|Item 11.   Executive Compensation                                                                 | 67      
|                                                                                                  |         
|Item 12.   Security and Ownership of Certain Beneficial Owners and
Management                     | 68      
|                                                                                                  |         
|Item 13.   Certain Relationships and Related Transactions                                         | 68      
|                                                                                                  |         
|PART IV.                                                                                          |         
|                                                                                                  |         
|Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-
K                       | 68      
|                                                                                                  |         
|SIGNATURES                                                                                        | 69      
|                                                                                                  |         
|INDEX TO EXHIBITS                                                                                 | 70      

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 MartketWatch.com and BigCharts.com and licensing a wide array of
content and tools in custom designed format for brokerages and other online
businesses. We carefully design and regularly update our Web sites to provide
well-organized and relevant financial content. We have important strategic
relationships with our principal stockholders, CBS Broadcasting Inc., or CBS,
and Pearson International Finance Ltd., or Pearson.

Our goal is to create the preeminent brand for real-time business news and
financial information on the Web and other media. 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 2001, our Web sites attracted an average of approximately
9.2 million unique visitors per month, who generated approximately 739 million
page views. In the fourth quarter of 2000, our Web sites attracted an average of
approximately 8.4 million unique visitors per month, who generated approximately
700 million page views (adjusted to compare with 2001 data).  Our visitor
information for 2001 is provided to us by digiMine, Inc. and our 2000
information is based on information provided to us by DoubleClick, Inc.

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.

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

News and Editorial Content

The CBS Marketwatch.com front page is carefully designed and frequently
updated throughout the trading day by our journalists and editors in San
Francisco, New York, Washington D.C., Chicago, London and Tokyo 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 are experienced editors, bureau chiefs and reporters with high
standards for reporting and editing. We believe our staff provides us with a
significant competitive advantage. For example, Larry Kramer, our Chief
Executive Officer, was Executive Editor of the San Francisco Examiner and a
financial reporter and Metro Editor of The Washington Post. Our staff also
includes Thom Calandra, who has been a financial columnist for the San Francisco
Examiner, the London-based, lead markets editor for Bloomberg News and Online
Money Editor for USA Today Online; Paul Erdman, a renowned economist and author;
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 Web sites include:

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

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

- Personal Finance.

- Tax Guide.

- Marketplace.

Data and Analytic Tools



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

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

- Track up to 200 ticker symbols in multiple portfolios;

- Access portfolios from any computer with Internet access;

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

- Automatically update portfolio price views every five minutes;

- Monitor short and long positions;

- View transaction history and capital gains reports and;

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

- Data.

Community Features

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

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

Advertising Sales

We are focused on providing our advertisers with a large, demographically
desirable audience. Over the last two 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. Advertising revenues represented 39%, 65% and 72% of our net revenues for
the years ended December 31, 2001, 2000 and 1999, respectively.

We currently derive, and expect to continue to derive significant revenue
from 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. These are 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.

Our direct sales force consists of more than 20 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.

Licensing Sales

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,
2001, 2000 and 1999, licensing revenue accounted for 54%, 29% and 21%,
respectively, of total revenue.

Our licensing sales and development group works to provide customized
solutions for businesses that want to seamlessly integrate financial charting,
analytic tools and 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, Datek, 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, 2001. The show's content is
determined by the top stories of the week. Segments produced for CBS MarketWatch
Weekend are included on our Web site to attract broadband viewers and also
appear on AOL Plus and Yahoo Finance Vision.

Other television reporting includes contributions to CBS The Early Show,
CBS 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. Our correspondents file these reports or provide services to CBS which
we believe helps to strengthen our brand awareness. We do not have a formal
agreement with CBS with respect to all of our correspondents who provide reports
to CBS or its affiliates. Therefore, there can be no assurance that these
services will continue in the future.

We also produce radio reports from our Washington, D.C. bureau for
distribution by the Westwood One Radio Network to over 200 stations as of
December 31, 2001. Our contract with Westwood One provides us 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 preeminent brand for real-time business news and financial
programming on the Web.

CBS

CBS Name and Logo. In connection with our formation in 1997, we
entered into a license agreement, which was subsequently amended and restated,
under which our Web site was renamed "CBS Marketwatch.com" and we were granted
the right to use the CBS name and logo, as well as CBS Television Network news
content in connection with the CBS Marketwatch.com Web site during this period.
This agreement will expire on October 29, 2005. Under the terms of the amended
and restated license agreement, we pay CBS a percentage of 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.  The timing and placement of these advertisements and promotions are
subject to CBS's discretion.  CBS also makes no guarantees to us as to the
demographic composition or size of the audience that views these advertisements
or promotions. This advertising and on-air promotion, as well as our association
with the CBS brand, are important elements of our strategy to increase our brand
awareness. CBS' obligation will terminate if our license agreement terminates.
As of December 31, 2001, CBS had delivered $20.1 million rate card amount of
promotion and advertising under these commitments.  In March 2002, $460,000 of
the remaining $9.9 million of rate card advertising and promotion from CBS has
been extended to December 31, 2002.

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, produce periodic reports for the CBS Evening News
weekend broadcasts and contribute a daily report to 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 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 pays us through October 2002 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.

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

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

Control by CBS and Pearson

Current Ownership

Following our initial public offering in January 1999, CBS and DBC
each owned approximately 38% of our outstanding common stock.  In March 2000,
CBS and DBC each purchased additional shares of our common stock and each then
held approximately 32% of our outstanding common stock.  In February 2000, DBC
completed a merger with an affiliate of Pearson plc. Upon the closing of the
merger, the affiliate of Pearson acquired approximately 60% of the outstanding
common stock of DBC.  In January 2001, DBC sold its shares of our common stock
to an affiliate of Pearson plc.  As of March 1, 2002, CBS and Pearson each owned
approximately 33.5% of our outstanding common stock.

Corporate Governance

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

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

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

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

Marketing and Distribution

We have established and are planning to maintain our brand as the Web's
leading provider of business and financial news.  CBS has agreed to provide the
CBS Marketwatch.com Web site with promotion and advertising with an aggregate
rate card amount of $30.0 million available from March 2000 through December
2002. This promotion and advertising will be 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 may take 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, 2001, CBS had delivered $20.1 million rate card
amount of promotion and advertising.

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

We use 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, 2001, the program was aired weekly to
stations capable of reaching over 85% of  U.S. households. The CBS
Marketwatch.com Web site is also linked from most of the Web sites of CBS owned
and operated, as well as affiliate, television stations. Each time a user at
these Web sites clicks on the "Finance" section, he or she receives a direct
link to the CBS Marketwatch.com Web site. We also have an agreement with
Westwood One to distribute our content over the Westwood One Radio Network. As
of December 31, 2001, we produced radio reports for distribution to over 200
stations across the country.

In addition to our CBS-related promotional activities, we advertise on
heavily trafficked Web sites, such as Yahoo! and AOL, conduct a variety of other
marketing and public relations programs, purchase advertisements in print
publications 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 certain slotting fees and advertisements
and/or payment 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
2002, the Company is committed to paying $2.5 million to AOL over the next three
years in fulfillment of the amended agreement.  AOL has the unilateral right to
cancel the agreement in November 2002 or November 2003.  If AOL cancels the
agreement in 2002 or 2003, the Company's commitment would be reduced to $852,000
or $1.7 million, respectively.
- Quicken.com. Since Intuit has been displaying certain of our news columns
and features in portions of its Quicken.com Web site, we receive a share of any
revenues from the sale of advertising on the Quicken.com pages that display this
content. In addition, Quicken.com has indexed certain news headlines from us in
their quote lookup section.  We have agreed to pay Quicken a fee per click to
our Web site.
- Wireless applications. We have entered into strategic partnerships in the
wireless arena with Sprint, AT&T, ClearNet, Palm, Omnisky, and AvantGo.  Our
wireless presence, coupled with our traditional and online media assets, further
extends our distribution and branding, as well as presenting advertisers with
integrated campaigns across platforms that include access to the cellular phone,
personal digital assistant, and pager.  We currently offer advertising and
sponsorships as well as content licensing agreements.

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

Subscription Services

While substantially all of the programming available on the CBS
Marketwatch.com Web site is currently free of charge, the CBS Marketwatch.com
Web site offers subscription-based third-party financial data services which are
targeted at sophisticated investors. These services are currently created and
provided by 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. The
IDC services include MarketWatch RT, a browser-based, real-time financial data
service providing on demand real-time quotes from the American and New York
Stock Exchanges and NASDAQ, and MarketWatch LIVE, a Windows-based, real-time
financial data service providing "streaming" real-time quotes over the Internet
from all major U.S. equity and futures exchanges.

Our 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.

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

Infrastructure, Operations and Technology

The CBS Marketwatch.com Web site, the BigCharts.com Web site, and
substantially all content licensing business are hosted in our 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, CNN and CNBC;
- General purpose consumer online services such as AOL and Microsoft Network,
each of which provides access to financial and business-related content and
services;
- Web sites targeted to business, finance and investing needs, such as
TheStreet.com and Motley Fool; and
- Web search and retrieval and other online services, such as Lycos, Yahoo!,
and other high-traffic Web sites, which offer quotes, financial news and other
programming and links to other business and finance-related Web sites.

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

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



Intellectual Property

Our intellectual property rights are costly and difficult to protect.
We may be subject to intellectual property infringement claims, which are costly
to defend and could limit our ability to use certain technologies in the
future.

We rely primarily on a combination of copyrights, trademarks, trade
secret laws, our user policy and 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.  However, 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 with respect to any claim by a third-party that
the licensed software or content infringes any person's intellectual property
rights. There is no assurance that the outcome of any litigation between such
licensors and a third-party or between us and a third-party will not lead to
royalty obligations for which we are not indemnified or for which such
indemnification is insufficient, or that we will be able to obtain any
additional license on commercially reasonable terms if at all. In the future, we
may seek to license additional technology or content in order to enhance our
current features or to introduce new services, such as certain of the community
features we may introduce. 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 licenses could result in delays in introduction
of new services until equivalent technology, if available, is identified,
licensed and integrated, which could harm our business, results of operations
and financial condition.

Infringement or other claims may be asserted or prosecuted against us in the
future whether resulting from our internally developed intellectual property or
licenses or content from third parties. Any future assertions or prosecutions
could materially adversely affect our business, results of operations and
financial condition. Any such claims, with or without merit, could be time-
consuming, result in costly litigation and diversion of technical and management
personnel or require us to introduce new content or trademarks, develop non-
infringing technology or enter into royalty or licensing agreements. Such
royalty or licensing agreements, if required, may not be available on acceptable
terms, if at all. In the event of a successful claim of infringement and our
failure or inability to introduce new content or trademarks, develop non-
infringing technology or license the infringed or similar technology on a timely
basis, our business, results of operations and financial condition could be
materially adversely affected.

Employees

As of December 31, 2001, there were 201 employees dedicated full time to
our business,   24 of these personnel worked in product and content development,
45 in sales and marketing, 72 in editorial, 33 in Web site operations and 27 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 Continue to 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 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.

We have incurred operating losses in each fiscal quarter since we were
formed. We may continue to experience operating losses in the future.  Although
we became operating cash flow positive for the first time in the fourth quarter
of 2001, you should not rely on the results for that quarter as an indication of
future performance. In particular, given the general economic uncertainty and
the softening of the advertising market, we may not remain cash flow positive
for fiscal 2002 or any particular quarter in fiscal 2002.

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 year, 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 in the economy. We expect this reduced demand to continue for the
foreseeable future. This continued decline 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 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 advertising revenue comes from
Internet commerce and financial services companies which have been adversely
affected by the recent market downturn.  If we do not diversify our advertiser
base and continue to attract advertisers from other industries, our business
could be 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 which, in certain cases, may lack financial
resources to fulfill their commitments.  Accordingly, it is difficult to
accurately forecast these revenues.  However, 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 amount of our revenues from licensing
of our content for the foreseeable future. License revenues depend on new
customer contracts and customer contract renewals and could decrease if new
business is not found or customers choose to renew for lesser amounts, terminate
early or forego renewal. We derive a significant percentage of our licensing
revenue from a small number of large clients.  Also, a significant amount of our
license revenues is earned from brokerages and financial service companies. The
amount of license revenues depends on the number of users these customers have
each month. If the number of users were to decrease, our license revenues would
decrease. The growth of our license revenues could also be limited as there are
a limited number of brokerages and financial service companies. Further, the
existing brokerage and financial service companies may merge which would further
reduce the number of customers. 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.

Moreover, a substantial portion of our license revenue comes from Internet
commerce 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 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 towards 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 subscribers of certain of
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 significant portion of our traffic. There is
intense competition for placements on these sites, and we may not be able to
enter into such relationships on commercially reasonable terms, if at all. Even
if we enter into distribution relationships with these Web sites, they
themselves may not attract significant numbers of users. Therefore, our sites
may not receive additional users from these relationships. Moreover, we may have
to pay significant fees to establish these relationships and continue to pay
significant fees to maintain these 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 implementation of the software is unsuccessful or 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 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 advertising on our Web sites. This
involves a number of risks including:

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

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.
Accordingly, we intend to introduce additional or enhanced services in the
future in order to retain our current users and attract new users. If we
introduce a service that is not favorably received, our current users may not
continue using our service as frequently. New users could also choose a
competitive service over ours.



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

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.

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

We 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, and managerial personnel, and upon the continued service of our
senior management and key sales and technical personnel. Although we have
employment agreements with some of our key executives, none of our personnel are
bound by an employment agreement that prevents such person from terminating his
or her relationship at any time for any reason. Competition for qualified
personnel is intense, particularly in the San Francisco Bay Area, where our
headquarters are located. 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 and Dow Jones, to provide information
and data feeds on a timely basis. Our Web sites could experience disruptions or
interruptions in service due to the failure or delay in the transmission or
receipt of this information. In addition, our users depend on Internet service
providers, online service providers and other Web site operators for access to
our Web sites. Each of them has experienced significant outages in the past, and
could experience outages, delays and other difficulties due to system failures
unrelated to our systems. These types of occurrences could cause users to
perceive our Web site as not functioning properly and therefore cause them to
use other methods to obtain their business and financial news and other
information.

Our market is characterized by rapidly changing technology, evolving industry
standards and frequent new product announcements. These are exacerbated by the
recent growth of the Web and the intense competition in our industry. 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.  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. This policy is accessible to users
of our personalized services when they initially register. Despite this policy,
however, if third persons were able to penetrate our network security or
otherwise misappropriate our users' personal information or credit card
information, we could be subject to liability. These could include claims for
unauthorized purchases with credit card information, impersonation or other
similar fraud claims. They could also include claims for other misuses of
personal information, such as for unauthorized marketing purposes. These claims
could result in litigation. In addition, the Federal Trade Commission and
certain states have been investigating certain Internet companies regarding
their use of personal information. We could incur additional expenses if new
regulations regarding the use of personal information are introduced or if
federal and state agencies chose to investigate our privacy practices.

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

We may be subjected to claims for defamation, negligence, copyright or
trademark infringement or based on other theories relating to the information we
publish on our Web sites. These types of claims have been brought, sometimes
successfully, against online services as well as other print publications in the
past. We could also be subjected to claims based upon the content that is
accessible from our Web sites through links to other Web sites. Moreover,
because we license some data and content from third parties, our exposure to
copyright infringement actions may increase because we must rely upon such third
parties for information as to the origin and ownership of such licensed content.
We generally obtain representations as to the origins and ownership of such
licensed content and generally obtain indemnification to cover any breach of any
such representations. However, such representations may be in error and any such
indemnification may be insufficient to provide adequate compensation for any
breach of such representations.  Our insurance may not adequately protect us
against these types of claims.



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 or military disruptions may
impact our operations.  For example, the disruption of the global financial
markets due to September 11th 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 advertising
revenues.  Also, volatility in the United States and worldwide financial markets
and economy have 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.

Because Two of Our Large Stockholders Beneficially Own Approximately 67%
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 approximately 67% of our outstanding
common stock as of December 31, 2001.  Each of CBS and Pearson has four
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, 2001, the
closing sale prices of our common stock on the NASDAQ National Market ranged
from $1.26 to $5.88. As of March 20, 2002, the closing sale price was $4.15. 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. 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, 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.
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 complaints have been consolidated into a single action. The action against
us is being coordinated with approximately three hundred other nearly identical
actions filed against other companies and no date has been set for any response
to the complaints. Due to the inherent uncertainties of litigation, we cannot
accurately predict the ultimate outcome of the litigation. 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 April 1, 2002:

`Name               Age                  Position
------------------------------ ----- ----------------------------------------
Larry S. Kramer...............   51  Chief Executive Officer and Chairman
                                     of the Board of Directors
Kathy Yates...................   47  President and Chief Operating Officer
Joan P. Platt.................   48  Chief Financial Officer and Secretary
William Bishop................   33  Executive Vice President & General Manager
Scot McLernon.................   44  Executive Vice President, Advertising Sales
                                     and Marketing
Scott Kinney..................   40  Executive Vice President, Licensing
Jamie Thingelstad.............   30  Chief Technology Officer`

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. Leob and Associated Press Awards.
During Mr. Kramer's tenures at The Washington Post and the San Francisco
Examiner, his staffs at each paper won a Pulitzer Prize.  Mr. Kramer 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 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, Kathy
spent 13 years in executive positions with the San Jose Mercury News and its
parent, Knight Ridder. She began as Assistant to the Publisher of the Mercury
News in 1981, was promoted to Chief Financial Officer in 1982 and served as
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
of 1999 through November 1999, Ms. Platt was Chief Financial Officer of Indus
International, a provider of enterprise asset management software. From April
1996 to April 1999, Ms. Platt served as Chief Financial Officer for Splash
Technologies Holdings, Inc., a Sunnyvale-based international supplier of color
servers. Previously, Ms. Platt served a 20-year tenure at Coopers & Lybrand,
including 10 years as a partner, where she specialized in high technology
companies. Ms. Platt holds a B.S. in business administration from The
Pennsylvania State University.

Mr. 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.

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.

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, 2001
was 273 (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, 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


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

Dividend Policy

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

Item 6.  Selected Financial Data

`DBC
                                                                                                      ONLINE/
                                                             MARKETWATCH.COM                          NEWS(1)
                                     ---------------------------------------------------------------------------
                                                                                      Inception
                                                                                     (October 29,    January 1,
                                                                                        1997)           1997
                                                                                       Through        Through
                                                    Years Ended December 31,        December 31,     October 28,
                                     ---------------------------------------------------------------------------
                                        2001        2000        1999        1998         1997           1997
                                     ----------  ----------  ----------  ----------  ------------   ------------
STATEMENTS OF OPERATIONS DATA
(in thousands except per share data)
Net revenues....................... $   45,856  $   53,907  $   24,935  $    7,027           630   $      1,172
Gross profit.......................     27,233      32,895      15,034       4,190           482            512
Operating expenses.................    103,834     121,448      77,324      16,444           563          1,895
Net loss...........................    (76,523)    (91,263)    (60,878)    (12,413)          (81)  $       (943)
Basic and diluted net loss
  per share(2)..................... $    (4.60) $    (5.83) $    (4.68) $    (1.38)        (0.01)
Shares used to compute basic
  and diluted net loss
  per share (2)(3)                      16,648      15,659      13,004       9,000         9,000




                                                             MARKETWATCH.COM
                                     ------------------------------------------------------------
                                                          Years Ended December 31,
                                     ------------------------------------------------------------
                                        2001        2000        1999        1998         1997
                                     ----------  ----------  ----------  ----------  ------------
BALANCE SHEET DATA
(in thousands)
Cash and cash equivalents.......... $   37,637  $   45,356  $    9,500  $      140             -
Working capital (deficit)..........     38,194      48,868      18,544      (5,889)          139
Total assets.......................     77,513     144,240     156,855       4,487           237
Advances from DBC(4)...............          -           -           -       3,946             -
Total stockholders' equity
   (deficiency).................... $   69,051  $  133,417  $  149,148  $   (3,130) $        152`



---

(1) Reflects the results of operations of the predecessor
business for the period indicated.

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

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

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



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

This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934, including, without limitation, statements regarding our expectations,
beliefs, intentions or future strategies that are signified by the words
"expects," "anticipates," "intends," "believes" or similar language. All
forward-looking statements included in this document are based on information
available to us on the date hereof, and we assume no obligation to update any
such forward-looking statements. Actual results could differ materially from
those projected in the forward-looking statements. In evaluating our business,
prospective investors should carefully consider the information set forth
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

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.

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

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

- Upon conversion of MarketWatch.com into a corporation, CBS agreed to
contribute $30.0 million in advertising through October 2002. The $30.0 million
contribution was delivered in full by the end of the quarter ended June 30,
2000;
- CBS licenses its trademark and certain news content for royalties
approximating 8% of all of our net revenues other than revenue attributable to
IDC and certain other revenue. The license agreement expires in October 2005;
- IDC provided us with part of our Web site infrastructure and certain
operational and administrative services at IDC's cost, as required. IDC's
service obligation expires on October 29, 2005. In addition, IDC pays 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 will expire in
October 2002; and
- In May 2000, CBS contributed an additional $30.0 million in rate card
advertising and promotion to be delivered between March 1, 2000 and May 5, 2002.
CBS has delivered $20.1 million of the additional $30.0 million in advertising
as of December 31, 2001.  In March 2002, CBS agreed to extend $460,000 of the
advertising for delivery of mentions through December 31, 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 acquired Data Broadcasting Corporation's 34.1%
stake in MarketWatch.com, Inc.

Our ability to generate significant revenue or reach profitability in the
future is uncertain. Further, in view of the rapidly evolving nature of our
business and our limited operating history, we have little experience
forecasting our revenues. Therefore, we believe that period-to-period
comparisons of our financial results are not necessarily meaningful and you
should not rely upon them as an indication of our future performance. To date,
we have incurred substantial costs to create, introduce and enhance our
services, to develop content, to build brand awareness and to grow our business.
As a result, we have incurred operating losses in each fiscal quarter since we
were formed. We expect operating losses to continue for the foreseeable future.
Although we were cash flow positive for the first time in the fourth quarter of
2001, given the general economic uncertainty and the continued uncertainty of
the advertising market, we may not remain cash flow positive for fiscal 2002 or
any particular fiscal quarter.  We may also incur additional costs and expenses
related to content creation, technology, marketing or acquisitions of businesses
and technologies to respond to changes in our rapidly changing industry. These
costs could have an adverse effect on our future financial condition or
operating results.

Results of Operations

`Years ended December 31,
                                   ----------------------------------
                                      2001        2000        1999
                                   ----------  ----------  ----------
   '                               (in thousands except per share data)
Net revenues:
  Advertising.................... $   17,988  $   34,952  $   18,033
  Licensing......................     24,775      15,809       5,262
  Other..........................      3,093       3,146       1,640
                                   ----------  ----------  ----------
       Total net revenues........     45,856      53,907      24,935
Cost of net revenues.............     18,623      21,012       9,901
                                   ----------  ----------  ----------
       Gross profit..............     27,233      32,895      15,034
                                   ----------  ----------  ----------
Operating expenses:
  Product development............      8,308       8,725       4,762
  General and administrative.....     12,600      14,211       8,948
  Sales and marketing............     29,975      47,130      33,430
  Purchased in-process research
    and development..............          -           -         200
  Amortization of goodwill
    and intangibles..............     51,542      51,382      29,984
  Restructuring costs............      1,409           -           -
                                   ----------  ----------  ----------
       Total operating expenses..    103,834     121,448      77,324
                                   ----------  ----------  ----------
          Loss from operations...    (76,601)    (88,553)    (62,290)
   Interest income, net..........      1,554       2,285       1,412
   Loss in joint venture.........     (1,476)     (4,995)          -
                                   ----------  ----------  ----------
       Net loss.................. $  (76,523) $  (91,263) $  (60,878)
                                   ==========  ==========  ==========
Basic and diluted net
   loss per share.................$    (4.60) $    (5.83) $    (4.68)
                                   ==========  ==========  ==========
Shares used in the calculation
   of basic and diluted
   net loss per share............     16,648      15,659      13,004
                                   ==========  ==========  ==========

                                          Years ended December 31,
                                  -----------------------------------
                                      2001        2000        1999
                                   ----------  ----------  ----------
                                    (as a percentage of net revenues)
Net revenues:
  Advertising....................         39 %        65 %        72 %
  Licensing......................         54          29          21
  Other..........................          7           6           7
                                   ----------  ----------  ----------
       Total net revenues........        100         100         100
Cost of net revenues.............         41          39          40
                                   ----------  ----------  ----------
       Gross profit..............         59          61          60
                                   ----------  ----------  ----------
Operating expenses:
  Product development............         18          16          19
  General and administrative.....         28          26          36
  Sales and marketing............         65          88         134
  Purchased in-process research
    and development..............          -           -           1
  Amortization of goodwill
    and intangibles..............        112          95         120
  Restructuring costs............          3           -           -
                                   ----------  ----------  ----------
       Total operating expenses..        226         225         310
                                   ----------  ----------  ----------
          Loss from operations...       (167)       (164)       (250)
  Interest income, net...........          3           4           6
  Loss in joint venture..........         (3)         (9)          -
                                   ----------  ----------  ----------
       Net loss..................       (167)%      (169)%      (244)%
                                   ==========  ==========  ==========`

---

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of
operations are based upon our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these 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 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 and subscription products.

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 the our Web sites.

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 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 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 our product from the MarketWatch.com website.Subscription revenue relates to customer subscriptions
to 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 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, 2001 and 2000, we recognized $1.5
million and $508,000, respectively, in barter revenue. No barter revenue was
recorded in calendar year 1999.

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 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 judgment 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 which could be material.



In conjunction with preparing our 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 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, 2001. 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.

Net Revenues

Net revenues are derived from the licensing of our content, sale
of advertising on our Web sites, distribution of television and radio
broadcasts, subscription sales of IDC products, fees from our membership center
and the sale of news to IDC, CBS and other customers.  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.

Net revenues increased by 116% to $53.9 million for the year ended December
31, 2000 from $24.9 million for the same period of 1999.  The increase in
advertising revenue was caused by several interrelated factors including the
following: a greater number of advertisers; an increase in users of our Web
sites and resultant page views with advertisements contained on those pages; an
increase in inventory available for sale due to the BigCharts acquisition and
the formation of strategic relationships such as Yahoo! and AOL;  an increase in
size and productivity of our direct sales force; increased rate card pricing for
ad placements; and greater flexibility and sophistication of advertising
packages offered to advertisers. The increase in license revenue was due to
increases in the number of licenses, products available and size 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 recent 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 service companies. The amount of license
revenues depends on the number of users these customers have each month. If the
number of users were to decrease, our license revenue would decrease. The growth
of our license revenues could also be limited as there are a limited number of
brokerages and financial service 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 are expected to remain flat or decrease in future periods 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, amortization of intangibles associated with the purchase of
BigCharts, Web site infrastructure costs, costs of serving ads, and costs
related to subscriptions including exchange fees and communication lines.

Cost of net revenues decreased by 11% to $18.6 million for the year ended
December 31, 2001 from $21.0 million for the year ended December 31, 2000.
Cost of net revenues decreased primarily due to the decrease in
news production personnel and CBS production costs and a decrease in the
royalties' payable due to CBS resulting from decreased revenues.

Cost of net revenues increased by 112% to $21.0 million for the year ended
December 31, 2000 from $9.9 million for the same period of 1999.  Cost of net
revenues increased due to the addition of news reporters and editors, additional
network communications lines, equipment and personnel to accommodate increased
traffic on our Web sites and license services, costs to serve advertisements on
the site, and royalties paid to CBS.

As a percentage of net revenues, cost of net revenues were 41% for the year
ended December 31, 2001, 39% for the year ended 2000 and 40% in the same period
in 1999. The increase as a percentage of net revenues in 2001 is primarily due
to the fixed nature of the costs and the decrease in 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 5% to $8.3 million for the year ended December 31, 2001 from $8.7
million for the year ended December 31, 2000 and increased 83% comparing the
year ended December 31, 2000 with the same period in 1999.Product development expenses decreased in 2001 due to a decrease in
personnel costs and data source fees, and increased in 2000 due to higher
headcount, the purchase of BigCharts, Inc. and associated expenses in 1999 and
an increase in depreciation expense related to capital expenditures for
technology as we developed our Web sites' infrastructure to replace DBC
services.

As a percentage of net revenues, product development expenses were 18%, 16%
and 19% for the years ended December 31, 2001, 2000 and 1999, respectively. The
increase as a percentage of net revenues occurred in calendar 2001 as net
revenues declined.

General and Administrative

General and administrative expenses primarily consist of
compensation and benefits for finance, business development and administrative
personnel, allocations from IDC for administrative services in 2000 and 1999,
occupancy and facility costs, professional fees, depreciation charges and
charges for bad debt. General and administrative expenses decreased by 11% to
$12.6 million for the year ended December 31, 2001 from $14.2 million for the
year ended December 31, 2000 and increased 59% comparing the year ended December
31, 2000 with the same period in 1999.  General and administrative expenses
decreased in 2001 due primarily to a decrease in headcount, legal, travel and
consulting expenses and increased in 2000 primarily due to additional personnel,
increased facilities, and higher legal and consulting costs of a public company.

As a percentage of net revenues, general and administrative costs were 28%,
26% and 36% for the years ended December 31, 2001, 2000 and 1999, respectively.

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. Sales and marketing expenses decreased by 36% to $30.0
million for the year ended December 31, 2001 from $47.1 million for the year
ended December 31, 2000.  Sales and marketing expenses decreased in 2001 due to
a number of factors, including a decrease in CBS in-kind advertising, a
reduction in cash advertising spending and a decrease in commissions due to
lower advertising sales.

Sales and marketing expenses increased 41% to $47.1 million for the year
ended December 31, 2000 from $33.4 million for the same period in 1999.  Sales
and marketing expenses increased due to a number of factors including: an
increase in the utilization of promotions and advertising contributed by CBS in
each of the two years; growth of our direct sales force in 1999 and 2000 and
increased sales commissions from higher advertising sales; an increase in
purchases of Web banner ads to promote our products and services; an increase in
purchases of traditional print and broadcast advertising in each of the two
years to promote our products and services; and an increase in distribution
partners and related payments.

As a percentage of net revenues, sales and marketing expenses were 65%, 88%
and 134% for the years ended December 31, 2001, 2000 and 1999, respectively.

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 $11.6 million, $17.4 million and $14.0 million for the years ended December
31, 2001, 2000 and 1999, 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. We would have amortized $21.2 million in
2002, however, on January 1, 2002, we will adopt SFAS No. 142 and cease
amortization of our goodwill balance and instead periodically evaluate goodwill
for impairment.

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, 2001, we had $345,000 remaining in our
restructuring accrual.

Interest Income

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 the
current year 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.  Interest income of $1.4 million for
the year ended December 31, 1999 resulted from income earned on the proceeds
from our initial public offering in January 1999.

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 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, 2001,
cash and cash equivalents totaled $37.6 million compared to $45.4 million at
December 31, 2000 and  $9.5 million at December 31, 1999.

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.  The Company 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. The Company recognized
$508,000 in barter revenue and marketing expense for the year ended December 31,
2000.

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

Cash used in 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 sale of short-term investments, an
investment in our joint venture and capital expenditures.

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

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

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

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

As of December 31, 2001, commitments under noncancellable operating
leases totaled $12.6 million through December 31, 2010. In addition, we are
committed to pay $2.5 million to AOL over the next three years.  AOL has a
unilateral right to cancel the agreement in November 2002 or November 2003.  If
AOL cancels the agreement in 2002 or 2003, our commitment would be reduced to
$852,000 or $1.7 million, respectively.

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, 2001, 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.Financial Statements and Supplementary Data

Index to Financial Statements

|                                                                                        | **Page**
|--------------------------------------------------------------------------------------- | --------
|                                                                                        |         
|Report of Independent Accountants                                                       | 45      
|                                                                                        |         
|Balance Sheets as of December 31, 2001 and 2000                                         | 46      
|                                                                                        |         
|Statements of Operations for the years ended December 31, 2001, 2000 and
1999           | 47      
|                                                                                        |         
|Statements of Stockholders' Equity for the years ended December 31, 2001,
2000 and 1999 | 48      
|                                                                                        |         
|Statements of Cash Flows for the years ended December 31, 2001, 2000 and
1999           | 49      
|                                                                                        |         
|Notes to Financial Statements                                                           | 50      





---



REPORT OF INDEPENDENT ACCOUNTANTS



To the Board of Directors and Stockholders

of MarketWatch.com, Inc.

In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of
MarketWatch.com, Inc.  at December 31, 2001 and 2000, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2001 in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibility
of the Company's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.





PricewaterhouseCoopers LLP
San Francisco, California
January 25, 2002

---





MARKETWATCH.COM, INC. 
BALANCE SHEETS

(in thousands, except share amounts)







`December 31,
                                                           ----------------------
                                                              2001        2000
                                                           ----------  ----------
                         ASSETS
Current assets:
  Cash and cash equivalents.............................. $   37,637  $   45,356
  Accounts receivable, net of allowances for bad debts
     of $752 and $628 at December 31, 2001 and
     2000, respectively..................................      8,263      11,838
  Prepaid expenses.......................................        756       2,497
                                                           ----------  ----------
          Total current assets...........................     46,656      59,691

Property and equipment, net..............................      9,533      10,846
Intangible assets, net...................................          -       1,129
Goodwill, net............................................     21,179      72,010
Other assets.............................................        145         564
                                                           ----------  ----------
          Total assets................................... $   77,513  $  144,240
                                                           ==========  ==========

          LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable....................................... $    4,004  $    5,810
  Accrued expenses.......................................      4,162       4,825
  Deferred revenue.......................................        296         188
                                                           ----------  ----------
          Total current liabilities......................      8,462      10,823
                                                           ----------  ----------
Commitments and contingencies (Note 7)

Stockholders' equity:
  Preferred stock, $.01 par value; 5,000,000 shares;
     authorized; no shares issued and outstanding........          -           -
  Common stock, $.01 par value; 30,000,000 shares authorized;
     16,741,530 shares and 16,541,403 shares
     issued and outstanding at December 31,
     2001 and 2000, respectively.........................        168         166
  Additional paid-in capital.............................    319,940     319,425
  Contribution receivable................................     (9,899)    (21,539)
  Accumulated deficit....................................   (241,158)   (164,635)
                                                           ----------  ----------
          Total stockholders' equity ....................     69,051     133,417
                                                           ----------  ----------
          Total liabilities and stockholders' equity..... $   77,513  $  144,240
                                                           ==========  ==========`







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

---





MARKETWATCH.COM, INC.
STATEMENTS OF OPERATIONS

(in thousands, except per share data)



`Years ended December 31,
                                  -----------------------------------
                                      2001        2000        1999
                                   ----------  ----------  ----------

Net revenues:
  Advertising.................... $   17,988  $   34,952  $   18,033
  Licensing......................     24,775      15,809       5,262
  Other..........................      3,093       3,146       1,640
                                   ----------  ----------  ----------
       Total net revenues........     45,856      53,907      24,935
Cost of net revenues.............     18,623      21,012       9,901
                                   ----------  ----------  ----------
       Gross profit..............     27,233      32,895      15,034
                                   ----------  ----------  ----------
Operating expenses:
  Product development............      8,308       8,725       4,762
  General and administrative.....     12,600      14,211       8,948
  Sales and marketing............     29,975      47,130      33,430
  Purchased in-process research
    and development..............          -           -         200
  Amortization of goodwill
    and intangibles..............     51,542      51,382      29,984
  Restructuring costs............      1,409           -           -
                                   ----------  ----------  ----------
       Total operating expenses..    103,834     121,448      77,324
                                   ----------  ----------  ----------
          Loss from operations...    (76,601)    (88,553)    (62,290)
   Interest income, net..........      1,554       2,285       1,412
   Loss in joint venture.........     (1,476)     (4,995)          -
                                   ----------  ----------  ----------
  Net loss....................... $  (76,523) $  (91,263) $  (60,878)
                                   ==========  ==========  ==========
Basic and diluted net
  loss per share................. $    (4.60) $    (5.83) $    (4.68)
                                   ==========  ==========  ==========
Shares used in the calculation
   of basic and diluted net
   loss per share.................    16,648      15,659      13,004
                                   ==========  ==========  ==========`







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



---



MARKETWATCH.COM, INC.
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, 1998....  9,000,000  $    90  $   53,366  $  (1,144) $  (42,948) $    (12,494) $   (3,130)

Issuance of common stock,
  net of issuance costs,
  pursuant to the initial
  public offering..............  3,162,500       31      47,832                                           47,863
Issuance of common stock
  pursuant to the purchase
  of BigCharts.................  1,589,138       16     149,539                                          149,555
Issuance of common stock
  upon exercise of options.....    175,039        2         830                                              832
Amortization of deferred
  compensation.................                                        621                                   621
Compensation and other
  expenses related to
  option grants................                             179        110                                   289
Reduction in CBS advertising
  contribution.................                         (20,000)                20,000
Advertising received from CBS..                                                 13,996                    13,996
Net loss.......................                                                              (60,878)    (60,878)
                                -----------  -------  ----------  ---------  ----------  ------------  ----------
Balances, December 31, 1999.... 13,926,677      139     231,746       (413)     (8,952)      (73,372)    149,148

Issuance of common stock
  upon exercise of options.....    341,098        3       1,702                                            1,705
Amortization of deferred
  compensation.................                                         43                                    43
Compensation and other
  expenses related to
  option grants................                                        370                                   370
Issuance of shares to DBC....... 1,136,814       12      42,988                                           43,000
Issuance of shares to CBS.......   341,044        4      12,997                                           13,001
Capital contribution receivable
  from CBS.....................    795,770        8      29,992                (30,000)
Advertising received from CBS..                                                 17,413                    17,413
Net loss.......................                                                              (91,263)    (91,263)
                                -----------  -------  ----------  ---------  ----------  ------------  ----------
Balances, December 31, 2000.... 16,541,403      166     319,425          -     (21,539)     (164,635)    133,417

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
                                ===========  =======  ==========  =========  ==========  ============  ==========`



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



---



MARKETWATCH.COM, INC.
STATEMENTS OF CASH FLOWS

(in thousands)

`Years ended December 31,
                                               -------------------------------
                                                 2001       2000       1999
                                               ---------  ---------  ---------
Cash flows used in operating activities:
  Net loss................................... $ (76,523) $ (91,263) $ (60,878)
  Adjustments to reconcile net loss to net
   cash used in operating activities:
     Provision for bad debt..................     1,020      1,046        280
     Depreciation and amortization...........    57,713     56,196     32,287
     Loss in joint venture...................     1,476      4,995          -
     Noncash charges from stockholders.......    11,640     17,413     13,996
     In process research and
       development write-off.................         -          -        200
     Changes in operating assets
      and liabilities:
       Accounts receivable...................     2,555     (4,811)    (6,064)
       Prepaid expenses and other
          assets.............................     2,160        684     (3,641)
       Accounts payable and
          accrued expenses...................    (2,469)     3,272      4,470
       Deferred revenue......................       108       (156)       215
                                               ---------  ---------  ---------
          Net cash used in operating
          activities.........................    (2,320)   (12,624)   (19,135)
                                               ---------  ---------  ---------

Cash flows used in investing activities:
  Purchase of short-term investments.........         -          -    (15,248)
  Sale of short-term investments.............         -      4,979     10,269
  Purchase of property and equipment.........    (4,440)    (9,210)    (4,022)
  Acquisition of business, net
     of cash acquired........................         -          -     (7,476)
  Investment in joint venture                    (1,476)    (4,995)         -
                                               ---------  ---------  ---------
          Net cash used in investing
          activities.........................    (5,916)    (9,226)   (16,477)
                                               ---------  ---------  ---------

Cash flows provided by financing activities:
  Issuance of common stock...................       517     57,706     48,918
  Advances from DBC..........................         -          -     (3,946)
                                               ---------  ---------  ---------
    Net cash provided by financing activities       517     57,706     44,972
                                               ---------  ---------  ---------
Net change in cash...........................    (7,719)    35,856      9,360
Cash and cash equivalents,
  at beginning of period.....................    45,356      9,500        140
                                               ---------  ---------  ---------
Cash and cash equivalents, at end of period.. $  37,637  $  45,356  $   9,500
                                               =========  =========  =========`









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



---

Note 1 - Organization and Nature of Business

The Company

MarketWatch.com, Inc. (the "Company"), a leading Web-based provider of
comprehensive, real-time, business news, financial programming and analytic
tools, was formed on October 29, 1997 in the state of Delaware as a limited
liability company and was jointly owned by Data Broadcasting Corporation
("DBC"), 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 our initial public offering (see Note
3).

In addition, CBS and the Company entered into a license agreement dated
October 29, 1997 (the "License Agreement") where CBS, in exchange for a royalty
of 30% of net advertising revenue, as defined, granted to the Company the non-
exclusive right and license to use certain CBS news content and registered
trademarks, including the CBS "Eye" design, for five years ending October 29,
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.

In January 1999, the Company completed an initial public offering ("IPO") of
3,162,500 shares of common stock at $17.00 per share. Total proceeds to the
Company were approximately $47.9 million, net of offering costs. Immediately
prior to the completion of the IPO, the Company was reorganized from a limited
liability company to a corporation. All share and per share data have been
retroactively adjusted to reflect the reorganization.

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

On January 6, 2000, the Company entered into a joint venture agreement with
the Financial Times Group, a part of Pearson plc, to establish Financial Times
Marketwatch.com (Europe) Limited, an Internet provider of real time business
news, financial programming and analytical tools. Under the agreement, the
Company licensed its trademark and technology to the joint venture, contributed
certain domain names and 500,000 pounds sterling in exchange for 500,000 shares
of the joint venture. The Financial Times 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 each of DBC for $43.0 million in cash and the same number of shares to
CBS for $13.0 million in cash and $30.0 million in rate card advertising and
promotion, expiring May 5, 2002.  In March 2002, $460,000 of the remaining
advertising and promotion from CBS has been extended to December 31, 2002.

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

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 preparation of 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
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 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 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 CBS MarketWatch.com 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 CBS MarketWatch.com website.Revenue from the membership center is recognized in the month the leads
are generated.  Subscription revenue relates to customer subscriptions to 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, 2001
and 2000, the Company recognized $1.5 million and $508,000, respectively, in
barter revenue. No barter revenue was recorded in calendar year 1999.

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, "Accounting for Advertising Barter
Transactions", or EITF 99-17.  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 our barter agreement with AOL, the Company did not
recognize revenue.  Under the agreement with AOL, for the year ended December
31, 2001, AOL received 65 mentions and 58 graphics on the CBS MarketWatch.com
Weekend Show and 15% of a CBS  MarketWatch.com and AOL cobranded advertisement
that ran 114 times in the NY Daily News and 104 times in the San Francisco
Examiner.  For the year ended December 31, 2000, AOL received 550 mentions and
440 graphics on the CBS MarketWatch.com Daily Show, 100 mentions and 338
graphics on the CBS MarketWatch.com Weekend Show, and 15% of a CBS
MarketWatch.com and AOL cobranded advertisement that ran 39 times in the NY
Daily News and 26 times in the San Francisco Examiner.  For the years ended
December 31, 2001, 2000 and 1999, the Company received 8.2 billion;
4.8 billion; and 174 million impressions, respectively, from AOL.

Cash and Cash Equivalents

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

Short-Term Investments

The Company classifies all investments in accordance with
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities", which requires investment securities
to be classified as either held to maturity, trading or available-for-sale.  At
December 31, 2001 and 2000, the Company did not have any short-term investments.

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, 2001, 2000 and 1999 was $5.1 million, $3.3 million and
$1.4 million, respectively.

Intangible Assets and Goodwill

Goodwill and intangibles have been amortized using the straight-
line method.  Goodwill was being amortized over three years, and intangibles
were being amortized over periods ranging from 1.5 to 3.5 years.  Through
December 31, 2001, the Company assessed the recoverability of its long term
assets by comparing the projected undiscounted cash flows associated with those
assets against their respective carrying amounts.  Impairment, if any, is based
on the excess of the carrying amount over the fair value of those assets.  If it
was probable that the projected future undiscounted cash flows of the acquired
assets were less than the carrying value of the goodwill, we would recognize an
impairment loss in accordance with the provision of Statement of Financial
Accounting Standards No. 121 ("SFAS No.121"), "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of."  In addition, if the analysis warranted revised estimated useful
lives, the Company would adjust the lives of the assets in accordance Accounting
Principles Board Opinion No. 17, "Intangible Assets."  No impairment
was identified as of December 31, 2001.

On January 1, 2002, the Company will adopt SFAS No. 142, "Goodwill and
other Intangible Assets" and cease amortization of our goodwill balance.
In lieu of amortization, the Company will be 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 expects to complete the
initial impairment review under SFAS No. 142 during the first quarter of 2002
and, consequently, has not determined if an adjustment for impairment will be
required. The Company would have amortized $21.2 million related to goodwill
balances in 2002.

Amortization of goodwill and intangibles for the years ended December 31,
2001, 2000 and 1999 was $52.0 million, $52.4 million and $30.5 million,
respectively, of which $416,000, $1.0 million and $500,000, 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 1,828,026; 3,033,537; and 2,042,826 shares of common
stock were outstanding at December 31, 2001, 2000 and 1999, 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 9).  Advertising expenses for
the year ended December 31, 2001, 2000 and 1999 were $15.1 million, $26.3
million and $25.2 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 three
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, 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 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, 2001, 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."

Recently Issued Accounting Pronouncements

On July 20, 2001, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No. 141
("SFAS No. 141"), "Business Combinations," and Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets." These
Statements made significant changes to the accounting for business combinations,
goodwill and intangible assets.



SFAS No. 141 establishes new standards for accounting and reporting
requirements for business combinations and will require that the purchase method
of accounting be used for all business combinations initiated after June 30,
2001. SFAS No. 142 establishes new standards for goodwill acquired in a business
combination, eliminates amortization of goodwill and instead sets forth methods
to periodically evaluate goodwill for impairment. Intangible assets with a
determinable useful life will continue to be amortized over that period. On
January 1, 2002, the Company will adopt the provisions of SFAS No. 142 that
apply to goodwill and intangible assets acquired prior to June 30, 2001. SFAS
142 requires that goodwill be tested annually for impairment. The Company
expects to complete the initial impairment review under SFAS No. 142 during the
first quarter of 2002 and, consequently, has not determined if an adjustment for
impairment will be required.

On October 3, 2001, the FASB issued SFAS No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets" which supercedes SFAS No. 121.
SFAS No. 144 addresses the accounting for the impairment of long-lived assets
and develops one accounting model for long-lived assets that are to be disposed
of by sale and requires that long-lived assets that are to be disposed of by
sale be measured at the lower of book value or fair value less cost to sell.
SFAS No. 144 will be effective for the Company on January 1, 2002.  The Company
has not yet determined what effect the adoption of SFAS No. 144 will have on the
Company's earnings and financial position.

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

CBS has the right to terminate the agreement in certain circumstances,
including 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 pays the Company a monthly per subscriber fee
ranging from $2.50 to $5.00, subject to a monthly minimum of $100,000 through
October 2002, for delivery of the Company's news to all 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 IPO.  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 December 31,
2002.

Note 4 - Balance Sheet Components



`Years ended
                                                             December 31,
                                               -----------------------------------
                                                  2001         2000        1999
                                               -----------  -----------  ---------
Balance at beginning of period............... $       628  $       280  $     226
Charged to expenses..........................       1,020        1,046        280
Write-off's, net of recoveries................        (896)        (698)      (226)
                                               -----------  -----------  ---------
Balance at end of period..................... $       752  $       628  $     280
                                               ===========  ===========  =========`

Prepaid expenses were as follows (in thousands):

`December 31,
                                               ------------------------
                                                  2001         2000
                                               -----------  -----------
Prepaid marketing............................ $       552  $     2,117
Other........................................         204          380
                                               -----------  -----------
                                              $       756  $     2,497
                                               ===========  ===========`



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

``

`December 31,
                                               ------------------------
                                                  2001         2000
                                               -----------  -----------
Computers and equipment...................... $    11,767  $    10,555
Leasehold improvements.......................       5,712        3,858
Furniture and fixtures.......................       2,126        1,412
                                               -----------  -----------
                                                   19,605       15,825
Less accumulated depreciation and
  amortization...............................     (10,072)      (4,979)
                                               -----------  -----------
       Total property and equipment, net..... $     9,533  $    10,846
                                               ===========  ===========`

Accrued expenses were as follows (in thousands):



`December 31,
                                               ------------------------
                                                  2001         2000
                                               -----------  -----------
Accrued television production................ $       715  $       494
Accrued royalty..............................         812        1,176
Accrued compensation.........................       1,258        2,809
Restructuring accrual........................         345            -
Accrued other................................       1,032          346
                                               -----------  -----------
                                              $     4,162  $     4,825
                                               ===========  ===========`

Note 5 - Business Acquisition

Effective June 9, 1999, the Company completed its acquisition of
BigCharts, a Minnesota corporation, for $6.0 million in cash, $110.9 million
worth of its Common Stock, and $38.6 million worth of its stock options. The
transaction was accounted for using the purchase method; accordingly, the
purchase price was allocated to the assets acquired and liabilities assumed
based on their fair market values at the date of acquisition. In connection with
the acquisition, in the second quarter of 1999, the Company recorded expenses of
$2.0 million primarily consisting of accounting and legal fees and other related
transactions costs. The following are unaudited pro forma condensed results of
operations for the Company and BigCharts on the basis that the acquisition had
taken place at the beginning of the period presented. The Company has not
included a $200,000 charge for the write-off of acquired in-process technology
in the pro forma net loss due to its non-recurring nature. These results are not
indicative of the actual results that would have occurred had the action taken
place at the beginning of the period (in thousands):

`Year Ended
                                                     December 31, 1999
                                                    -------------------
                                                        (unaudited)

Pro forma net revenues...........................       $ 26,765
Pro forma net loss...............................        (82,558)
Pro forma net loss per share.....................       $  (5.87)`

Note 6 - Income Taxes

`December 31,
                                               -----------------------------------
                                                  2001         2000        1999
                                               -----------  -----------  ---------
Deferred tax assets:
  Net operating loss carryforwards........... $    37,446  $    29,695  $  14,720
  Property and equipment.....................       3,377        1,281      1,402
  Accruals and reserves......................         704          443        205
                                               -----------  -----------  ---------
      Total deferred tax assets..............      41,527       31,419     16,327

Deferred tax liabilities:
  Intangible assets..........................        (115)        (449)    (1,102)
                                               -----------  -----------  ---------
    Net deferred tax asset...................      41,412       30,970     15,225
  Less valuation allowance...................     (41,412)     (30,970)   (15,225)
                                               -----------  -----------  ---------
    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, 2001, 2000 and 1999 increased by $10.4 million, $15.7 million, and
$15.2 million, respectively.

At December 31, 2001, the Company had federal and state net operating loss
carry-forwards of approximately $98.1 million and $70.4 million, respectively,
available to offset future regular taxable income.  The Company's net operating
loss carryforwards expire in the years 2010 through 2020 for federal purposes
and expire in the years 2004 through 2011 for state purposes.  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.

Included in the above stated net operating loss carryforwards, the Company
has federal and state net operating loss carryforwards of $13.0 million and $9.9
million, respectively, attributable to the exercise of stock options not
included in gross deferred tax assets; and when recognized, the benefit will be
recorded 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,
                                               ------------------------ ----------
                                                  2001         2000        1999
                                               -----------  -----------  ---------
Provision computed at federal statutory rate.         (34)%        (34)%      (34)
  State taxes, net of federal benefit........          (5)          (5)        (6)
  Amortization of goodwill...................          26           23         19
  Other permanent differences................          (1)          (1)         -
  Change in valuation allowance..............          14           17         21
                                               -----------  -----------  ---------
Provision for income taxes...................           - %          - %        -
                                               ===========  ===========  =========`

Note 7 - Commitments and Contingencies

Leases

`Year ending December 31,
   2002.................................................. $    1,650
   2003..................................................      1,698
   2004..................................................      1,697
   2005..................................................      1,873
   2006..................................................      1,992
   Thereafter............................................      3,710
                                                           ----------
                                                          $   12,620
                                                           ==========`

The Company has entered into employment agreements with four of
its officers. These agreements expire through June 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 January 2002, the Company is committed to paying $2.5 million to AOL
over the next three years in fulfillment of an agreement.  AOL has the
unilateral right to cancel the agreement in November 2002 or November 2003.  If
AOL cancels the agreement in 2002 or 2003, the Company's commitment would be
reduced to $852,000 or $1.7 million, respectively.  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 8 - Employee Benefit Plans

401K

The Company has a 401(k) deferred savings plan covering
substantially all employees.  Employee contributions were matched 33% by the
Company, up to a maximum of $2,500 per employee per year for all prior periods.
Matching contributions by the Company in the years 2001, 2000 and 1999 were
approximately $348,000, $327,000 and $180,000, respectively.

Employee Stock Purchase Plan

Effective August 15, 2000, the Company's Board of Directors
adopted the Employee Stock Purchase Plan (the "Purchase Plan"), which provides
for the issuance of a maximum of 500,000 shares of common stock. Eligible
employees can have up to 15% of their earnings withheld, up to certain maximums,
to be used to purchase shares of the Company's common stock on every
February 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 year ended December 31, 2001,139,165 shares were purchased under the Purchase Plan.  At December 31,
2001, 360,835 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 IPO. In the calendar year 2000, the Board of
Directors reserved an additional 1,500,000 shares for issuance under the 1998
Plan.  To date, the Company has reserved an aggregate of 3.1 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 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, 1998.....    863,500  $      6.25
Options granted at fair value..............    777,111  $     44.94
Options assumed from BigCharts purchase....    585,824  $      6.92
Options cancelled..........................   (158,570) $     23.12
Options exercised..........................   (175,039) $      5.51
                                             ----------
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
                                             ==========  ===========`

At December 31, 2001, 2000 and 1999, 1,125,757, 258,913 and 114,925 options
were available for future grant, respectively, and 813,651, 806,432 and 747,370
options were exercisable, respectively. The weighted average exercise price and
weighted average remaining contractual life of the vested options were $9.90 and
8.08 years, respectively, at December 31, 2001; $13.18 and 8.62 years,
respectively, at December 31, 2000; and $5.73 and 8.57 years, respectively, at
December 31, 1999.

For the years ended December 31, 2001, 2000 and 1999, the Company expensed
$0, $43,000, and $621,000, respectively, of deferred compensation representing
the difference between the deemed fair value by the Company's Board of Directors
of the common stock on the date of grant and the option exercise price on the
date of grant. Deferred compensation was amortized over the three year vesting
period of the options.

The following table summarizes information about options at December 31,
2001:



`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 - $ 3.00............................    287,992         9.30  $    2.63      19,090    $    2.01
$ 3.02 - $ 3.75............................    266,213         8.99  $    3.36      31,713    $    3.33
$ 3.88 - $ 4.00. ..........................    334,665         6.01  $    4.00     318,106    $    4.00
$ 4.03 - $ 4.03............................    349,500         8.82  $    4.03     115,149    $    4.03
$ 4.13 - $ 11.00...........................    315,522         7.58  $    6.02     184,037    $    6.93
$ 11.38 - $ 74.00..........................    274,134         8.09  $   31.36     145,556    $   33.66
                                             ----------                         ----------
                                             1,828,026         8.08  $    8.15     813,651    $    9.90
                                             ==========                          ==========`

For the year ended December 31, 1999, 150,000 options were issued outside of
the option plans, none of which were exercisable at December 31, 1999. As of
December 31, 2000, 50,000 of the options issued outside the plans were
exercisable.  These options were exchanged in July 2001 pursuant to the
Company's voluntary stock option exchange program.  There were no options
outstanding outside of the option plans at December 31, 2001.

The Company recorded amortization expense of $0, $370,000 and $229,000 for
the years ended December 31, 2001, 2000 and 1999, respectively, in connection
with stock options issued for services. For the years ended December 31, 2000
and 1999, 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%.

Fair Value Disclosures

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



`Years ended December 31,
                                               ------------------------------------
                                                  2001        2000          1999
                                               ----------  ----------    ----------
Net loss:
  As reported................................ $  (76,523) $  (91,263)   $  (60,878)
                                               ==========  ==========    ==========

  Pro forma.................................. $  (80,215) $ (105,190)   $  (66,913)
                                               ==========  ==========    ==========
Net loss per share:
  As reported................................ $    (4.60) $    (5.83)   $    (4.68)
                                               ==========  ==========    ==========

  Pro forma.................................. $    (4.82) $    (6.72)   $    (5.15)
                                               ==========  ==========    ==========`



The Company calculated the fair value of its equity based compensation plans
using the Black-Scholes model.  The following assumptions were used related to
option grants for the years ended December 31, 2001, 2000 and 1999: no dividend
yield, weighted average expected option term of four years, risk free interest
rates of 4.2%, 4.2% and 6.5%, respectively, and an expected volatility factor of
115%, 108% and 97%, respectively.  The assumptions used related to the Purchase
Plan for the years ended December 31, 2001 and 2000 were: no dividend yield,
weighted average term of six months, risk free interest rates of 2.6% and 6.2%,
respectively, and a volatility factor of 115% and 118%, respectively.

According to the Black-Scholes option-pricing model, the weighted average
estimated fair value of employee stock option grants during 2001, 2000 and 1999
was $2.44, $15.66, and $31.19 per share, respectively, and the weighted average
fair value of shares granted under the Purchase Plan for the years ended
December 31, 2001 and 2000 were $2.37 and $5.51, respectively.

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

Note 9 - Related Party Transactions

Under its license agreement with CBS, the Company expensed $2.8 million,
$3.8 million, and $1.3 million for the years ended December 31, 2001, 2000 and
1999, respectively, related to licensing of CBS news content and trademarks. In
addition, the Company has recorded advertising expenses of $11.6 million, $17.4
million, and $14.0 million at rate card value for the years ended December 31,
2001, 2000 and 1999, respectively, for advertising and promotion provided by
CBS. Rental payments to CBS for leasing of certain facilities were $1.1 million,
$559,000, and $338,000 for the years ended December 31, 2001, 2000 and 1999,
respectively.

Licensing revenues from IDC were $1.4 million, $2.7 million, and $1.6 million
for the years ended December 31, 2001, 2000 and 1999, respectively. In addition,
the Company recognized revenue of $1.2 million, $1.9 million, and $854,000 for
the years ended December 31, 2001, 2000 and 1999, respectively, from television
programming on CBS stations, and costs to CBS of $1.2 million for the years
ended December 31, 2001 and 2000 and $509,000 for the year ended December 31,
1999 for production of the television programming.

IDC purchased $123,000, $298,000, and $435,000 for the years ended December
31, 2001, 2000 and 1999, respectively, of advertising under an insertion order.
Direct charges for subscription revenues for certain IDC data feeds were
$136,000, $262,000, and $227,000 for the years ended December 31, 2001, 2000 and
1999, respectively.   In 2000 and 1999, IDC provided certain general services
including accounting, network operations, hosting of the Company's Web pages and
data feeds totaling $735,000 and $1.6 million, respectively.  At December 31,
2001 and 2000, $338,000 and $501,000 was included in accounts receivable due
from IDC, respectively.

At December 31, 2001 and 2000, $1.0 million and $1.2 million, respectively,
were included in accounts receivable for radio and television revenue due from
CBS and the Company had a liability of $812,000 and $1.2 million, respectively,
owed to CBS for royalty fees.

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

Note 10 - 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, 2001, the Company had
paid out $300,000 related to severance and employee costs, $207,000 related to
obligations under non-cancelable lease obligations, and $27,000 related to legal
and consulting costs.  At December 31, 2001, $345,000 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 11 - Comparative Quarterly Financial Data (unaudited)



`Quarter Ended
                                       --------------------------------------------
                                        March 31,  June 30, September 30, December 31,
                                          2001       2001       2001         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
                                        --------   --------   --------     --------

                                                      Quarter Ended
                                        -------------------------------------------
                                        March 31,  June 30, September 30, December 31,
                                          2000       2000       2000         2000
                                        --------  ---------  ---------   ----------

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

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

Not applicable.

PART III



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

Item 10. Directors and Executive Officers of the Registrant

Information relating to our executive officers is present under Item 4A
of this report. Information relating to our directors will be set forth under
the caption "Proposal No. 1 -- Election of Directors" in our definitive proxy
statement in connection with the Annual Meeting of Stockholders to be held in
May 2002. Such information is incorporated herein by reference.  Our definitive
proxy statement will be filed with the Securities and Exchange Commission as
required no later than 120 days after the end of the fiscal year covered by this
report.

Item 11. Executive Compensation

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

PART IV



Item 14. 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.   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 financial
statements or notes thereto.

3.   List of Exhibits.

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

(a)   Reports on Form 8-K.

None.

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

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

---

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused the report to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 1st day of April, 2002.



| |                      
| | ---------------------
| | 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 and Chairman         April 1, 2002
--------------------------- (Principal Executive Officer)
Larry S. Kramer


/s/ JOAN P. PLATT           Chief Financial Officer and          April 1, 2002
--------------------------- Secretary (Principal Financial
Joan P. Platt               and Accounting Officer)


/s/ PETER GLUSKER           Director                             April 1, 2002
---------------------------
 Peter Glusker


/s/ ANDREW HEYWARD          Director                             April 1, 2002
---------------------------
Andrew Heyward

/s/  STEPHEN HILL           Director                             April 1, 2002
---------------------------
Stephen Hill


/s/ ROBERT LESSIN           Director                             April 1, 2002
---------------------------
Robert Lessin

/s/ JOHN MAKINSON           Director                             April 1, 2002
---------------------------
John Makinson


/s/ DANIEL MASON            Director                             April 1, 2002
---------------------------
Daniel Mason


                            Director
---------------------------
Russell I. Pillar

/s/ GILES SPACKMAN          Director                             April 1, 2002
---------------------------
Giles Spackman

/s/ JONATHAN MAY            Director                             April 1, 2002
---------------------------
Jonathan May

/s/ JEFFREY F. RAYPORT      Director                             April 1, 2002
---------------------------
Jeffrey F. Rayport

/s/ CHRISTIE HEFNER         Director                             April 1, 2002
---------------------------
Christie Hefner

/s/ BARRY HERSTEIN          Director                             April 1, 2002
---------------------------
Barry Herstein`

---

INDEX TO EXHIBITS

|Exhibit Number | Exhibit Title                                                                                                                                                                             
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                           
|2.01   (1)     | Merger Agreement dated January 13, 1999, between
MarketWatch.Com, LLC (the "LLC") and the Registrant.                                                                                     
|2.02   (2)     | Agreement and Plan of Reorganization dated April 28, 1999,
between the Registrant and BigCharts, Inc.                                                                                     
|3.01   (1)     | Registrant's Amended and Restated Certificate of Incorporation.                                                                                                                           
|3.03   (3)     | Registrant's Bylaws.                                                                                                                                                                      
|4.01   (3)     | Form of Specimen Stock Certificate for Registrant's Common
Stock.                                                                                                                         
|4.02   (1)     | Registration Rights Agreement dated January 13, 1999, among the
Registrant, CBS Broadcasting Inc. (formerly known as CBS Inc.) ("CBS") and Data
Broadcasting Corporation ("DBC").         
|4.03   (1)     | Stockholders' Agreement dated January 13, 1999, among the
Registrant, the LLC, CBS and DBC.                                                                                               
|10.01   (4)    | Form of Indemnity Agreement between the Registrant and each of
its directors.                                                                                                             
|10.02          | [Reserved]                                                                                                                                                                                
|10.03          | [Reserved]                                                                                                                                                                                
|10.04          | [Reserved]                                                                                                                                                                                
|10.05          | [Reserved]                                                                                                                                                                                
|10.06   (3)    | Lease dated as of August 27, 1998, between the Registrant and
CBS Corporation.                                                                                                            
|10.07   (1)    | Amended and Restated License Agreement dated January 13, 1999,
between the Registrant and CBS.                                                                                            
|10.08   (1)    | Amended and Restated Services Agreement dated January 13, 1999,
between the Registrant and DBC.                                                                                           
|10.09   (1)    | Revolving Credit Agreement dated January 13, 1999, between the
Registrant and DBC, together with Revolving Promissory Note dated January 13,
1999, made by the Registrant in favor of DBC.
|10.10* (3)     | Form of Non-Plan Option.                                                                                                                                                                  
|10.11* (3)     | Registrant's 1998 Directors Stock Option Plan.                                                                                                                                            
|10.12* (3)     | Registrant's 1998 Equity Incentive Plan.                                                                                                                                                  
|10.13* (3)     | Employment Agreement dated as of July 1, 1998, between the
Registrant and Lawrence Kramer.                                                                                                
|10.14          | [Reserved]                                                                                                                                                                                
|10.15          | [Reserved]                                                                                                                                                                                
|10.16* (5)     | Employment Agreement dated as of December 1, 1999, between the
Registrant and Joan Platt.                                                                                                 
|10.17   (5)    | Joint Venture Agreement dated January 6, 2000, between the
Registrant and Financial Times Group Limited.                                                                                  
|10.18          | [Reserved]                                                                                                                                                                                
|10.19   (6)    | Stock Purchase Agreement, dated March 28, 2000, among the
Registrant, CBS and DBC.                                                                                                        
|10.20   (7)    | Joint Venture Agreement dated June 19, 2000, among the
Registrant, Financial Times Group Limited, Pearson Internet Holdings BV and
Pearson Overseas Holdings Limited.                     
|10.21* (8)     | Employment Agreement dated as of October 2, 2000, between the
Registrant and William Bishop.                                                                                              
|10.22   (8)    | Employee Stock Purchase Plan.                                                                                                                                                             
|10.23*         | Employment Agreement dated April 28, 1999, between the
Registrant and Scott Kinney.                                                                                                       
|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          | Joint venture sale and purchase agreement dated November 16,
2001 between Registrant and Pearson Internet Holdings BV.                                                                    
|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.

---

Exhibit 23.01



CONSENT OF INDEPENDENT ACCOUNTANTS







PricewaterhouseCoopers LLP
San Francisco, California
March 28, 2002



---