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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 AMENDMENT NO. 2
                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the fiscal year ended September 30, 2000
                         Commission File Number -0-25427

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


            Delaware                                            94-3233791
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                             Identification No.)

  301 Galveston Drive, Redwood City, California                   94063
   (Address of principal executive offices)                     (zip code)

               Registrant's telephone number, including area code:
                (650) 482-3200 Securities registered pursuant to
                            section 12(b) of the Act:

                                                   (Name of Each Exchange on
               (Title of Each Class)                   Which Registered)
            ---------------------------          ----------------------------
                      None                                   None

           Securities registered pursuant to section 12(g) of the Act:
                          Common Stock, par value $.01

      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  statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

      As of September 30, 2000, the aggregate  market value of voting stock held
by non-affiliates of the Registrant,  based upon the closing sales price for the
Registrant's Common Stock, as reported in the NASDAQ National Market System, was
$36.8  million.  Shares of Common Stock held by each officer and director and by
each  person  who owns 5% or more of the  outstanding  Common  Stock  have  been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate status is not necessarily a conclusive  determination for any other
purpose.

      As of December 31, 2000,  Registrant had outstanding  31,687,043 shares of
Common Stock, $.01 par value.

                       DOCUMENTS INCORPORATED BY REFERENCE

      The following  documents (or parts thereof) are  incorporated by reference
into the following parts of this Form 10-K: Certain information required in Part
III of this Form 10-K is incorporated from the registrant's  Proxy Statement for
its Annual meeting of Stockholders.

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<PAGE>

Item 11.  Executive Compensation

Summary Compensation Table
<TABLE>
         The following Summary Compensation Table sets forth summary information
as to compensation  received by (i) the Company's Chief Executive Officer,  (ii)
each of the four other  most  highly  compensated  persons  who were  serving as
executive  officers of the Company as of September  30, 2000 and (iii) two other
individuals who would have been among the four most highly compensated  officers
if they had been  executive  officers  at  year-end  (collectively,  the  "named
executive  officers"),  for services  rendered to the Company in all  capacities
during the three fiscal years ended September 30, 2000.
<CAPTION>
                                                                                                                 Long-Term
                                                                                                                Compensation
                                                                                                                 ----------
                                                                    Annual Compensation                            Awards
                                                                                                                 Securities
                                                                                                                 Underlying
                                                                                                Other            Options/SARs
Name and Principal Position            Fiscal Year           Salary         Bonus           Compensation           (number)
<S>                                       <C>               <C>           <C>               <C>                  <C>
Samir Arora
Chairman of the Board, Chief              2000             $ 218,164      $ 84,260          $      ---           1,200,000
Executive Officer and President           1999               183,129        55,987                 ---                 ---
                                          1998               175,338        47,434                 ---                 ---

Russell F. Surmanek
Executive Vice President, Finance         2000               220,000        69,763           1,591,387             610,000
and Operations, Chief Financial           1999               108,447       113,750                 ---             235,000
Officer                                   1998                   ---           ---                 ---                 ---

Jack Rotolo  (1)                          2000               192,897        82,652           2,092,348             540,000
Executive Vice President,                 1999               119,923        53,774                 ---             166,666
Worldwide Sales                           1998               135,683         9,840                 ---              17,666

Mark Patton
Executive Vice President and              2000               202,167        42,005             776,613             580,000
General Manager, Small Business Markets   1999               162,525       105,754                 ---              71,666
                                          1998               150,000        35,555                 ---                 ---

Steven Mitgang
Executive Vice President, Small           2000               149,002        33,711                 ---             660,294
Business and Corporate Marketing          1999               108,447           ---                 ---                 ---
                                          1998                   ---           ---                 ---                 ---

Peter Shaw (2)
Executive Vice President,                 2000               163,390        54,000                 ---             100,000
Corporate Development

Morris Taradalsky (3)                     2000               139,302        46,537             311,397                 ---
Executive Vice President and              1999               176,073        24,343                 ---              63,333
General Manager, Enterprise Division      1998               166,048        86,095                 ---                 ---
<FN>
(1)  Mr. Rotolo became an executive  officer in August 1999, and the 1999 figures reflect his  compensation for
     the entire year.
(2)  Mr. Shaw was not employed as an executive  officer at the Company  prior to fiscal year 2000 and resigned
     from the Company on April 14, 2000.
(3)  Mr. Taradalsky resigned from the Company on January 1, 2000.
</FN>
</TABLE>


                                                             -1-
<PAGE>


Option Grants in Last Fiscal Year
<TABLE>
         The following table provides  information  regarding the grant of stock
options during fiscal year 2000 to the named executive officers.
<CAPTION>
                                             Individual Grants


                                        % of Total                                       Potential Realizable Value at Assumed
                                           Options                                      Annual Rate of Stock Price Appreciation
                      Number of Shares   Granted to    Exercise                                     for Option Term (9)
                       Underlying      Employees in    Price         Expiration        -----------------------------------------
        Name           Options (1)         Fiscal     ($/share)          Date                   5%                   10%
--------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>                  <C>      <C>              <C>                 <C>                 <C>
Samir Arora              33,293(5)           1%       $  6.312         10/01/09            $ 132,159.32        $   334,856.87
                        166,707(5)           3           6.312         10/01/09              661,757.25          1,677,022.81
                        200,000(2)           3           7.125         11/08/09              896,174.84          2,271,083.01
                        400,000(4)           6          13.187         04/25/10            3,317,293.38          8,406,672.73
                        400,000(6)           6           2.937         08/22/10              738,825.41          1,872,328.64

Russell F. Surmanek     160,000(5)           3           6.312         10/01/09              635,133.26          1,609,552.39
                        200,000(2)           3           7.125         11/08/09              889,174.84          2,271,083.01
                         50,000(4)           1          12.125         04/24/10              381,267.37            966,206.37
                        200,000(6)           3           2.937         08/22/10              369,412.70            936,164.32

Jack Rotolo              10,394(5)           0           6.312         10/01/09               41,259.84            104,560.55
                         79,606(5)           1           6.312         10/01/09              316,002.62            800,812.67
                        200,000(3)           3           7.125         11/08/09              896,174.84          2,271,083.01
                         50,000(4)           1          12.125         04/24/10              381,267.37            966,206.37
                        200,000(6)           3           2.937         08/22/10              369,412.70            936,164.32

Mark Patton               3,456(5)           0           6.312         10/01/09               13,754.60             34,856.87
                        126,535(5)           2           6.312         10/01/09              502,291.17          1,272,904.44
                        200,000(2)           3           7.125         11/08/09              896,174.84          2,271,083.01
                         50,000(4)           1          12.125         04/24/10              381,267.37            966,206.37
                        200,000(6)           3           2.937         08/22/10              369,412.70            936,164.32

Steven Mitgang          100,294(2)           2           0.230         10/04/09            1,110,218.68          1,781,501.41
                         43,245(2)           1           6.937         10/04/09              188,662.45            478,107.70
                        106,755(2)           2           6.937         10/04/09              465,733.85          1,180,261.02
                        200,000(2)           3           7.125         11/08/09              896,174.84          2,271,083.01
                         10,000(4)           0          12.125         04/24/10               76,253.47            193,241.27
                        200,000(6)           3           2.937         08/22/10              369,412.70            936,164.32


                                                                 -2-
<PAGE>


Peter Shaw (8)           14,415(7)           0           6.937         10/04/09               62,887.48            159,369.23
                         85,585(7)           1           6.937         10/04/09              373,376.72            946,209.91

Morris Taradalsky (8)     5,941(5)           0           6.312         10/01/09               23,583.29             59,764.69
                        124,059(5)           2           6.312         10/01/09              492,462.48          1,247,996.62
                        200,000(2)           3           7.125         11/08/09              896,174.84          2,271,083.01
<FN>
(1)   Options are incentive stock options to the extent  qualified and  nonstatutory  options  otherwise.  The
      options  generally  terminate  30 days  following  the  executive's  employment  with the Company or the
      expiration date,  whichever occurs earlier. The exercise price of each option was determined to be equal
      to or greater than the fair market value per share of the Common Stock at the grant date.

(2)   Options to purchase shares vest as to 25% at the end of the first year, with the remainder vesting in 36
      equal monthly installments.

(3)   Options vest in 12 equal monthly installments.

(4)   Options vest in 24 equal monthly installments.

(5)   Options vest in 36 equal monthly installments.

(6)   Options vest in 48 equal monthly installments.

(7)   In the event of  termination  without  cause  during the first year of  employment,  50% of the unvested
      shares  granted  pursuant to the option  shall  accelerate  and become  vested.  This  acceleration  was
      triggered on April 14, 2000 due to Mr. Shaw's  termination.  The original vesting schedule was set forth
      in footnote 2 above.

(8)   Unvested  options were  cancelled due to the  termination  of the option  holder's  employment  with the
      Company.

(9)   Amounts represent  hypothetical  gains that could be achieved for the respective options if exercised at
      the end of the option term. These gains are based on assumed rates of stock price appreciation of 5% and
      10% compounded  annually from the date the respective options were granted to their expiration date. The
      gains shown are net of the option  exercise  price,  but do not include  deductions  from taxes or other
      expenses  associated  with the exercise of the option or the sale of the underlying  shares.  The actual
      gains,  if any, on the  exercise of stock  options will depend on the future  performance  of the Common
      Stock, the option holder's continued  employment  throughout the option period and the date on which the
      options are exercised.
</FN>
</TABLE>

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Values
<TABLE>
         The  following  table  provides  information  regarding  the  aggregate
exercises of options by each of the named executive officers. In addition,  this
table   includes  the  number  of  shares  covered  by  both   exercisable   and
unexercisable  stock  options  as of  September  30,  2000,  and the  values  of
"in-the-money"  options,  which values represent the positive spread between the
exercise  price  of any  such  options  and the  fiscal  year-end  value  of the
Company's Common Stock.


                                       -3-
<PAGE>
<CAPTION>
                                                            Number of Securities Underlying           Value of the Unexercised
                                                             Unexercised Options at Fiscal          In-The-Money Options Fiscal
                                                                      Year-End                            Year-End (2)
                             Shares
                           Acquired on        Value
       Name                Exercise        Realized (1)      Exercisable       Unexcersiable     Exercisable        Unexercisable
<S>                          <C>         <C>                    <C>                <C>           <C>                <C>
Samir Arora                     ---                ---          432,985            992,015       $291,957.24        $ 115,117.78

Russell F. Surmanek          50,000      $1,591,387.49          232,640            562,360            783.40           36,816.61

Mark Patton                  61,040       1,671,087.37          153,942            488,324         34,635.94           57,447.59

Jack Rotolo                  73,050       2,516,941.58          258,978            402,020          9,871.01           49,964.85

Steven Mitgang               62,147         908,801.57          121,462            476,685         93,073.11           54,962.47
<FN>
(1)   Based upon the fair market  value of the  purchased  shares on the exercise  date less the exercise  price
      paid for the shares.
(2)   Based upon the fair market value of the  Company's  Common Stock,  $3.125,  which was the closing price on
      September 30, 2000, less the exercise price paid for the shares.
</FN>
</TABLE>

Compensation of Directors

         The  Company's  Directors  do not receive cash  compensation  for their
services as Directors or members of Committees  of the Board of  Directors.  The
Company's Amended and Restated 1997 Stock Option Plan provides for the automatic
grant of options  to  purchase  20,000  shares of Common  Stock to each  outside
Director  upon  initially  joining the Board of Directors.  The option  exercise
price is equal to the fair market  value of a share of Common  Stock at the date
of  grant,  the  option  term is six  years,  and the  options  vest and  become
exercisable  pro rata at the end of each  month for 48 months  while the  option
holder continues to serve as a Director.

         Mr.  Modersitzki has received this automatic  option grant.  During the
fiscal year, the Company  reimbursed John Sculley for certain expenses  incurred
to attend Board of Directors meetings.

Employment Contracts, Termination of Employment and Change-in-Control Agreements

         On  November  8,  1999  the  Compensation  Committee  of the  Board  of
Directors  approved  the  issuance of new options to purchase a total of 200,000
shares each to Mesrrs. Samir Arora, Surmanek,  Taradalsky,  Patton, Gagan Arora,
Mitgang and Rotolo at a price of $7.125 per share.  These  options  vest monthly
based on continued  employment  with the Company  over the  following 24 months,
except for Mr.  Rotolo's  options  which  vest  ratably  over 12 months.  If the
Company is acquired  by another  company and the  employment  of either  Messrs.
Surmanek,  Mitgang or Rotolo is


                                      -4-
<PAGE>


terminated other than for cause within 12 months following such acquisition, the
options granted to him will  automatically  accelerate upon such  termination to
provide for vesting of 100% of the shares.  The options  have a term of 10 years
and an exercise  price equal to the fair market  value of the  Company's  Common
Stock on the date of grant.  All of these option grants are  nonstatutory  stock
options and are subject to the terms of an Executive Stock Option Agreement.

         The  Company  entered  into an  employment  agreement  with  Russell F.
Surmanek,  Executive Vice President,  Finance and Operations and Chief Financial
Officer,  as of April 5, 1999. The employment  agreement initially had a term of
24  months,  but was  amended as of  December  1, 2000 to extend the term by one
year. Under the agreement,  Mr. Surmanek is entitled to receive an annual salary
of $220,000  plus a 15% sales  target  bonus  payable  semi-monthly,  20% of his
annual salary as an annual fiscal year bonus,  and a starting bonus of $100,000.
If Mr. Surmanek's  employment is terminated  without cause before April 5, 2002,
he is entitled to be paid the  remaining  salary  which would have been  payable
during the term,  including  pro-rata  bonus  amounts.  Additionally,  under the
agreement the Company granted options to purchase 235,000 shares of Common Stock
to Mr.  Surmanek.  If Mr.  Surmanek's  employment is terminated  for any reason,
other than for cause, the agreement  provides for the acceleration of vesting of
his stock  options  so that 65% of the shares  underlying  the  options  will be
vested as of the date of  termination.  If the  company is  acquired  by another
company, the vesting of Mr. Surmanek's stock options also will accelerate by one
calendar  year,  or as  necessary  to provide for vesting of at least 65% of the
shares underlying the options as of the date of the acquisition.

Loans to Officers and Directors.

         In April 2000, the Company advanced $250,000 and in September 2000, the
Company advanced another  $250,000 to Samir Arora,  each advance  evidenced by a
promissory  note  bearing  interest at 6.45%,  the  applicable  federal  rate as
defined in Section 1274(d) of the Internal Revenue Code of 1986, as amended (the
"Code"). The notes are due in full two years from the date of issuance. Prior to
the due date, under the terms of each promissory note, Mr. Arora is obligated to
repay any net proceeds from the sale of any of his shares of Common Stock of the
Company until the principal sum and all accrued and unpaid interest  thereon has
been paid in full.

         In August  2000,  the  Company  advanced  $75,000  to  Steven  Mitgang,
evidenced by a promissory note bearing interest at 7.00%, the applicable federal
rate as  defined in  Section  1274(d) of the Code.  The note was due in full two
years  from the date of  issuance  and was  secured  by a pledge  of stock  upon
exercise of stock options to purchase  25,000  shares of Common Stock.  Prior to
the due date,  under the terms of the promissory note, Mr. Mitgang was obligated
to repay the advance only from certain  proceeds  from the sale of 25,000 shares
to be acquired upon the exercise of stock options.

         In October 1999, the Company advanced  $200,000 to Russell F. Surmanek,
evidenced by a promissory note bearing interest at 5.42%, the applicable federal
rate as  defined in  Section  1274(d) of the Code.  The note was due in full two
years from the date of issuance.  Prior to the due date,  under the terms of the
promissory  note,  Mr.  Surmanek  was  obligated  to repay the advance only from
certain proceeds from the sale of 15,000 shares to be acquired upon the exercise
of stock options.


                                      -5-
<PAGE>


Mr.  Surmanek  repaid the principal and accrued  interest  under the note to the
Company in full on March 28, 2000.

Contractual Arrangements

         The  Company is a party to a voting  agreement  with IBM that  provides
that IBM will vote its shares of voting stock in a way that limits the number of
IBM representatives on a six-member board of directors to three, notwithstanding
IBM's right to elect a greater  number of directors  under the Delaware  General
Corporation  Law. The  agreement  defines an IBM  representative  as an officer,
director  or other agent or employee  of IBM,  IBM's  subsidiaries  or any other
entity  controlled by IBM,  other than the Company.  The voting  agreement  also
obligates the Company and IBM to maintain a board of directors consisting of six
members unless the holders of a majority of outstanding voting stock,  excluding
IBM's shares,  approve an amendment to the Company's amended and restated bylaws
or restated  certificate of  incorporation  to change the size of the board. The
voting  agreement  remains  in  effect  until  IBM  holds  less  than 45% of the
Company's  voting  securities  on a  fully-diluted  basis (as defined in the IBM
Voting Agreement) for a period of 180 consecutive days. As of December 31, 2000,
IBM held approximately 48.5% of the Company's voting securities as calculated on
this  fully-diluted  basis,  which takes into account  outstanding  warrants and
options to  purchase  shares of Common  Stock.  While the IBM  voting  agreement
remains effective,  it may allow IBM's representatives on the Board of Directors
to control any determinations with respect to most material transactions outside
the  ordinary  course  of our  business,  including  mergers  or other  business
combinations,  the acquisition or disposition of our assets, future issuances of
the Company's  equity or debt  securities  and the payment of  dividends.  IBM's
current  representatives  on the Company's Board of Directors are Lee A. Dayton,
Robert G. Anderegg and Michael D. Zisman.

         In addition,  as there is currently one vacancy on the Company's  Board
of Directors, the IBM representatives  represent a majority of the directors. If
the  voting  agreement  expires,  IBM could  still  control or have the power to
control determinations of the type described in the preceding paragraph.

Compensation Committee Interlocks and Insider Participation

         The Company's Board of Directors has a standing Compensation Committee.
The  Compensation  Committee  currently  has two  members who served as a member
during the previous fiscal year: Lee A. Dayton and John Sculley. Neither Messrs.
Dayton or Sculley was an officer or  employee  of the Company  during the fiscal
year or prior  thereto,  or had any  relationship  requiring  disclosure  by the
Company under any paragraph of Item 404 of Regulation S-K.


                                      -6-

<PAGE>


<TABLE>
                                   SIGNATURES

         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 indicated on the 29th day of January 2001.
<CAPTION>
                Signature                                         Title                                 Date
                ---------                                         -----                                 ----
<S>                                         <C>                                                 <C>
/s/  SAMIR ARORA                            Chairman of the Board, Chief Executive Officer
--------------------------------------      and President (principal executive officer)         February 6, 2001
Samir Arora

                           *                Executive Vice President, Finance and Operations,
--------------------------------------      and Chief Financial Officer (principal financial    February 6, 2001
Russell F. Surmanek                         officer)


                           *
--------------------------------------      Director                                            February 6, 2001
Robert G. Anderegg

                           *
--------------------------------------      Director                                            February 6, 2001
Lee A. Dayton

                           *
--------------------------------------      Director                                            February 6, 2001
Blake Modersitzki

                           *
--------------------------------------      Director                                            February 6, 2001
Michael D. Zisman



/s/  SAMIR ARORA                                                                                February 6, 2001
--------------------------------------
Samir Arora
Attorney-in-fact
</TABLE>


                                                                -7-