U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended                  May 31, 1998
                              --------------------------------------------------
       [ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT

For the transition period from                    to
                              --------------------  ----------------------------

                        Commission File Number 000-21623

                             OBIE MEDIA CORPORATION
       -----------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

            OREGON                                               93-0966515
-------------------------------                              -------------------
(State or other jurisdiction of                              (IRS Employer
incorporation or organization)                               Identification No.)


                   4211 West 11th Ave., Eugene, Oregon 97402
                   -----------------------------------------
                    (Address of principal executive offices)

     541-686-8400                                          FAX 541-345-4339
--------------------------------------------------------------------------------
                           (Issuer's telephone number)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or 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 [ ].

    As of July 1, 1998, 3,862,498 shares of the issuer's common stock were
outstanding.

    This report contains 9 pages. The only exhibit is the Financial Data
Schedule.


<PAGE>
                             OBIE MEDIA CORPORATION
                           Consolidated Balance Sheet

                                     ASSETS
                                                    May 31,        November 30,
Current assets:                                      1998             1997
                                                ---------------  ---------------
                                                  (Unaudited)
  Cash                                          $          -     $          -
  Accounts receivable, net                           2,862,580        2,878,360
  Prepaid expenses and other current assets          1,040,829          790,234
  Deferred tax assets                                1,105,240        1,105,240
                                                ---------------  ---------------
                Total current assets                 5,008,649        4,773,834
Property and equipment, net                          9,514,428        9,264,855
Other assets                                           264,749          245,733
                                                ---------------  ---------------
                Total assets                    $   14,787,826   $   14,284,422
                                                ===============  ===============

                       LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:

  Checks outstanding in excess of cash deposit  $      228,423   $      173,611
  Current portion of long-term debt                    986,771          859,323
  Line of credit                                     1,332,412          742,864
  Accounts and note payable                            862,779          403,449
  Accrued expenses                                     778,451        1,166,883
  Deferred revenue                                     716,269          781,204
                                                ---------------  ---------------
                Total current liabilities            4,905,105        4,127,334

Deferred tax liability                                 965,095          630,551

Long-term debt, less current portion                 5,147,452        5,695,219
                                                ---------------  ---------------
                Total liabilities                   11,017,652       10,453,104

Minority interest in subsidiary                         67,625           35,424

Shareholders equity:  

Preferred stock, without par value, 10,000,000 shares  
  authorized, no shares issued and outstanding

Common stock, without par value, 20,000,000 shares   6,173,967        6,173,967
  authorized, 3,855,484 shares issued and outstanding

Accumulated deficit                                 (2,471,418)      (2,378,073)
                                                ---------------  ---------------
                Total shareholders' equity           3,702,549        3,795,894

                Total liabilities and         
                         shareholders equity    $   14,787,826   $   14,284,422
                                                ===============  ===============

See accompanying notes

<PAGE>
<TABLE>
<CAPTION>
                             OBIE MEDIA CORPORATION
                        Consolidated Statements of Income

                                        Three Months Ended           Six Months Ended
                                        May 31,      May 31,        May 31,       May 31,
                                         1998         1997           1998          1997
                                     ------------ ------------   ------------  ------------
Revenues:
<S>                                   <C>          <C>            <C>           <C>       
  Outdoor Advertising                 $1,412,918   $1,285,159     $2,757,853    $2,549,773
  Transit Advertising                  3,573,776    1,759,425      6,398,688     3,232,316 

    Gross Revenues                     4,986,694    3,044,584      9,156,541     5,782,089
  Less Agency Commission                (448,531)    (262,355)      (799,016)     (474,506)

    Net Revenues                       4,538,163    2,782,229      8,357,525     5,307,583

Operating expenses:

  Direct Advertising Expenses          2,764,939    1,510,463      5,262,902     3,067,611
  General and Administrative             765,202      509,215      1,453,568       948,952
  Start-Up Costs                          25,313      116,841         43,553       153,677
  Depreciation and amortization          176,241      160,185        353,680       318,464    

    Operating Income                     806,468      485,525      1,243,822       818,879


Interest Expense                         165,064      136,733        331,242       290,600
Minority interest in subsidiary           28,439        5,161         32,201        12,674
Other                                        -        (40,492)           -         (40,492)

    Income before taxes                  612,965      384,123        880,379       556,097

Provision for income taxes               232,927      149,893        334,544       215,676

    Net income                          $380,038     $234,230       $545,835      $340,421

Basic and diluted earnings per share       $0.10        $0.06          $0.14         $0.09

Shares used in per-share calculations  3,921,829    3,870,690      3,918,931     3,872,417
</TABLE>

See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
                             OBIE MEDIA CORPORATION
                      Consolidated Statement of Cash Flow

                                                       Three Months Ended            Six Months Ended
                                                     May 31,        May 31,        May 31,        May 31,
                                                      1998           1997           1998           1997
                                                  ------------   ------------   ------------   ------------
                                                                         (Unaudited)
Cash flows from operating activities
<S>                                               <C>            <C>            <C>            <C>        
   Net Income                                     $   380,038    $   234,230    $   545,835    $   340,421

   Adjustments to reconcile net income to net cash          
     provided by operating activities        

   Depreciation and amoritization                     191,283        160,185        368,722        318,464
   Changes in operating assets                       (655,553)       (91,217)      (594,165)      (317,193)

 Net cash provided by (used in) operating activities  (84,232)       303,198        320,392        341,692

Cash flow from investing activities:
   Capital expenditures                              (333,631)      (411,190)      (603,253)      (804,280)

 Net cash used in investing activities               (333,631)      (411,190)      (603,253)      (804,280)
                                                                                            
Cash flows from financing activities:                                                       
   Payments on long-term debt                        (147,895)      (163,807)      (420,319)      (297,622)
   Borrowings on line-of-cred                         486,085            -          589,548            -   
   Other financing activities                          79,673        271,799        113,632        285,270 
                                                                                                           
 Net cash provided (used in) financing activities     417,863        107,992        282,861        (12,352)
                                                                                             
Net increase (decrease) in cash                             0              0              0       (474,940)

Cash, beginning of period                                   0              0              0        474,940
                                                                                                           
Cash, end of period                                         0              0              0              0
                                                                                                           
Supplemental disclosures of cash flow information                                                          

   Interest capitalized                                 3,438          7,470          6,142          8,470
   Cash paid for intetest                             288,788         12,999        326,650        136,340
   Cash paid for taxes                                    -              -              -              -  
   Note payable issued to acquire                                            
     outdoor advertising structures                       -              -          698,000            -
</TABLE>

See accompanying notes
<PAGE>
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


1.  Basis of Presentation

The interim  financial  statements have been prepared by Obie Media  Corporation
(the "Company")  without audit. In the opinion of management,  the  accompanying
unaudited  financial  statements  contain all  adjustments  necessary to present
fairly the financial position of the Company as of May 31, 1998, and the results
of  operations  and cash flows of the Company  for the six months  ended May 31,
1998 and 1997.  The  condensed  consolidated  financial  statements  include the
accounts  of the  Company  and  its  subsidiary.  All  significant  intercompany
accounts and transactions have been eliminated in consolidation.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been  condensed  or omitted as permitted  by rules and  regulations  of the
Securities  and  Exchange  Commission.  The  organization  and  business  of the
Company,  accounting  policies followed by the Company and other information are
contained in the notes to the Company's  financial  statements  filed as part of
the Company's  November 30, 1997 Form 10-KSB.  This  quarterly  report should be
read in conjunction with such annual report.


2.  Long Term Borrowings

The  Company's  Term  Loan  Agreement   contains  certain  covenants   including
maintenance  of a cash flow coverage.  The Company was in compliance  with these
covenants at May 31, 1998.


3.    Earnings Per Share

In February  1997,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statements of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS
128).  SFAS 128 changes the standards for computing and presenting  earnings per
share (EPS) and supersedes Accounting Principles Board Opinion No. 15, "Earnings
Per Share".  This Statement  requires  restatement of all  prior-period EPS data
presented.  The Company  implemented  SFAS 128 for its year ended  November  30,
1998.

Basic  earnings per share common  share is computed  using the weighted  average
number of shares of common stock  outstanding for the period.  Diluted  earnings
per common  share is computed  using the  weighted  average  number of shares of
common stock and dilutive common  equivalent shares related to stock options and
warrants outstanding during the period.

As it relates to the Company,  the principal  differences between the provisions
of SFAS 128 and  previous  authoritative  pronouncements  are the  exclusion  of
common stock  equivalents in the  determination  of Basic Earnings Per Share and
the  market  price at which  common  stock  equivalents  are  calculated  in the
determination of Diluted Earnings Per Share. All share and per share information
has  been  adjusted  to give  retroactive  effect  to an 11 for 10  stock  split
effective in November 1997.
<TABLE>
<CAPTION>
                                                       Three Months Ended               Six Months Ended
                                                   May 31, 1998   May 31, 1997     May 31, 1998   May 31,1997
<S>                                                 <C>            <C>              <C>            <C>      
Issued  and outstanding shares (weighted average)   3,855,484      3,850,000        3,855,484      3,850,000
Dilutive Effect of Stock Options                       66,345         20,690           63,447         22,417
                                                   ---------------------------------------------------------
                                                    3,921,829      3,870,690        3,918,931      3,872,417
                                                    =========      =========        =========      =========
</TABLE>
<PAGE>
4.    Newly Issued Financial Accounting Pronouncements

In June 1997, the FASB issued  Statement of Financial  Accounting  Standards No.
130 "Reporting  Comprehensive  Income" (SAFAS 130).  This statement  establishes
standards for reporting and displaying  comprehensive  income and its components
in a full set of general purpose financial statements. The objective of SFAS 130
is to report a measure of all  changes in equity of an  enterprise  that  result
from   transactions   and  other  economic  events  of  the  period  other  than
transactions with owners.  The Company adopted SFAS 130 during the first quarter
of 1998.  Comprehensive income did not differ from currently reported net income
in the periods presented.

5.    Related Party Transaction

In December 1997, the Company  exercised its option to purchase  several outdoor
advertising  structures  from an  affiliated  partnership.  The  structures  had
previously  been leased by the Company.  The  purchase  price was  $698,000.  In
accordance with generally accepted accounting  principles,  the Company recorded
only the book value carried on the books of the  affiliated  partnership  at the
date of purchase.  The difference between the net book value of these assets and
the purchase price has been recorded as an addition to accumulated deficit.

MANAGEMENT'S DISCUSSION & ANALYSIS

The following discussion of the financial condition and results of operations of
the  Company  should  be read in  conjunction  with the  consolidated  financial
statements  included  elsewhere in this Form 10-QSB.  The  following  discussion
contains   certain   forward-looking   statements   that   involve   risks   and
uncertainties.  The Company's  actual results could differ  materially  from the
forward-looking  statements.  Factors  that could  cause or  contribute  to such
differences  include the following:  a decline in the demand for  advertising in
the areas where the Company  conducts its business;  a deterioration of business
conditions  generally  in such areas;  slower than  expected  acceptance  of the
Company's unique display  products;  competitive  factors,  including  increased
competition  and  price  pressures;  changes  in  regulatory  or other  external
factors;  and  other  factors  listed  from  time to time in the  Company's  SEC
reports,  including  but not limited to, its "Risk  Factors"  discussion  in the
Registration  Statement it filed in connection  with its initial public offering
(the "IPO").

Transit Contracts

On April 6, 1998,  the Company  entered  into a contract to provide  advertising
services to Capital Metropolitan  Transportation  Authority (Austin), in Austin,
Texas. Austin operates approximately 300 vehicles. The contract is for two years
with two additional  one year options at the  discretion of Austin.  The Company
agreed to pay Austin  $1.4  million  over the 4 year  period or 53% of net space
revenue, whichever is greater.

On June 23,  1998,  the  Company  was  informed  by BC Transit  that it had been
selected to provide transit  advertising  services to  substantially  all of the
transit districts in British Columbia, Canada. BC Transit operates approximately
1,400  vehicles in these  districts.  The Company  expects to sign two  separate
contracts to provide these services,  one covering approximately 900 vehicles in
the  city  of  Vancouver,   British  Columbia,  and  another  contract  covering
approximately 500 vehicles in the remainder of the province, including Vancouver
Island.  Both contracts are for a total term of 7 years including  option years.
The Company  expects to  guarantee BC Transit  CDN$37.7  million over the 7 year
period  or  51%  of  net  space  revenue,  whichever  is  greater.  The  Company
established  a wholly owned  subsidiary,  Obie Media Ltd, a BC  corporation,  to
conduct Canadian operations.
<PAGE>
The Company has received notice that Tri-County  Metropolitan  Transit  District
("Tri-Met")  of Oregon  has been  requested  to  solicit  proposals  to  provide
exclusive transit advertising  services to the District beginning December 1998,
and Tri-Met intends to do so. Tri-Met's  consideration of the request appears to
be based on pressure  from the Federal  Transportation  Administration  ("FTA"),
which contends that its rules  prohibit  contracts  longer than five years.  The
Company presently serves as exclusive transit  advertising  service provider for
Tri-Met under a contract set to expire on June 30, 2001. The Company  intends to
participate in the proposal  process.  The Company cannot  estimate the probable
outcome of this matter at this time.

Acquisition 

On June 10, 1998, the Company  signed a non-binding  letter of intent to acquire
the stock of P&C Media. P&C Media sells transit advertising under contracts with
16 transit  agencies in the  Eastern and  Midwestern  United  States,  including
Cleveland and Cincinnati, Ohio, Milwaukee,  Wisconsin,  Hartford Connecticut and
Ft. Lauderdale Florida..  These districts operate  approximately 3,000 vehicles.
The Company  agreed to pay a cash  purchase  price  ranging from $6.5 million to
$7.5 million,  depending on P&C Media's future earnings,  plus 125,000 shares of
Obie Media  common  stock.  The  acquisition  is subject to several  conditions,
including completion of due diligence and negotiation of a final agreement.  P&C
Media's  president  and sole  shareholder,  Mr.  Wayne P. Schur,  would serve as
president of the Company's  newly created P&C Media  division and would become a
senior vice president of the Company.

Results of operations
(all dollars in $000 except per share amounts)

Gross revenues  increased 62.2% from $3,045 for the three-month period ended May
31, 1997, to $ 4,987 for the three-month period ended May 31, 1998 due primarily
to the  addition of new transit  markets and  additionally  to higher  rates and
increased  occupancy  in existing  markets.  Gross  transit  revenues  increased
approximately 103.1% from $1,759 in the second quarter of 1997, to $3,574 in the
comparable period in 1998, while gross outdoor  advertising  revenues  increased
9.9% from $1,285 in 1997 to $1,413 in 1998.  Agency  discounts  increased  71.0%
from  $262  to $449 in the  second  quarter  of  1997  and  1998,  respectively,
reflecting a greater proportion of agency business, particularly in new markets.

Direct advertising  expenses increased 83.1% to $2,765 for the second quarter of
1998, from $1,510 in the comparable  period in 1997,  primarily due to increased
revenues.  Direct  advertising  expenses  rose as a  percentage  of net  revenue
primarily  due to the  faster  growth of  transit  advertising  which has higher
occupancy costs as a percentage of net sales than outdoor advertising.

General and  administrative  (G&A) costs  increased  50.3% to $765 in the second
quarter of 1998 from $509 in the comparable period in 1997.  Increased G&A costs
are  primarily  due to  increased  payroll and other costs  attributable  to the
Company's  growth.  G&A costs  decreased as a percentage  of revenues  primarily
because  corporate costs did not need to be added  proportionate  to revenue for
the new markets.

Interest  expense  increased  20.7% from $137 for the three months ended May 31,
1997,  to $165 for the  comparable  period in 1998,  primarily  due to increased
borrowings to support the growth of the Company.

For the reasons set out above,  income  before income taxes rose 59.6% from $384
in the second quarter of 1997, to $613 in the comparable  period in 1998. Income
taxes and net income also rose for the reasons outlined above.
<PAGE>
Results of operations for the six months ended May 31, 1998 (all dollars in $000
except per share amounts)

Gross revenues  increased  58.4% from $5,782 for the six-month  period ended May
31, 1997, to $9,157 for the six-month period ended May 31, 1998 due primarily to
the  addition  of new  transit  markets  and  additionally  to higher  rates and
increased  occupancy  in existing  markets.  Gross  transit  revenues  increased
approximately  98.0% from $3,232 in the second quarter of 1997, to $6,399 in the
comparable period in 1998, while gross outdoor  advertising  revenues  increased
8.2% from $2,550 in 1997 to $2,758 in 1998.  Agency  discounts  increased  68.4%
from  $475  to $799 in the  second  quarter  of  1997  and  1998,  respectively,
reflecting a greater proportion of agency business, particularly in new markets.

Direct advertising  expenses increased 71.6% to $5,263 for the second quarter of
1998, from $3,068 in the comparable  period in 1997,  primarily due to increased
revenues.  Direct  advertising  expenses  rose as a  percentage  of net  revenue
primarily  due to the  faster  growth of  transit  advertising  which has higher
occupancy costs as a percentage of net sales than outdoor advertising.

General and  administrative  (G&A) costs increased 53.2% to $1,454 in the second
quarter of 1998 from $949 in the comparable period in 1997.  Increased G&A costs
are  primarily  due to  increased  payroll and other costs  attributable  to the
Company's  growth.  G&A costs  decreased as a percentage  of revenues  primarily
because  corporate costs did not need to be added  proportionate  to revenue for
the new markets.

Interest  expense  increased  14.0% from $291 for the three months ended May 31,
1997,  to $331 for the  comparable  period in 1998,  primarily  due to increased
borrowings to support the growth of the Company.

For the reasons set out above,  income  before income taxes rose 58.3% from $556
in the second quarter of 1997, to $880 in the comparable  period in 1998. Income
taxes and net income also rose for the reasons outlined above.

Liquidity and Capital Resources
(All amounts in $000 except per share amounts)

The Company's  working capital was $104 at May 31, 1998. The decrease in working
capital  resulted  primarily from the purchase of assets from a related party as
explained  above. In addition there were seasonal  reductions in working capital
items.

Net cash used by operating activities was $84 for the three months ended May 31,
1998. There were two transit contract anniversaries during the quarter resulting
in payments of $354 representing the difference between percentage  payments and
minimum  guarantees.  For the six months  ended May 31,  1998 cash  provided  by
operations  was $320.  Increases  in income  in 1998  were  offset by  increased
working capital needs resulting from the Company's growth.

The net cash used in  investing  activities,  primarily  investments  in outdoor
advertising  leases and  structures,  was $334 for the  quarter and $603 for the
first half of 1998.

The Company's net cash provided by financing  activities was $418, primarily due
to  borrowings  on the  Company's  line of credit,  net of payments on long-term
debt.

At May 31, 1998, the Company had outstanding  borrowings of approximately $8,165
of which $6,134 were pursuant to long-term credit  agreements.  The Company also
maintains a $2,000  operating line of credit.  The line carries  interest at the
Prime rate of the lender. As of May 31, 1998, there were $1,332 in borrowings on
this line of credit, and the Company's available  borrowing  capacity,  based on
collateralized accounts was $2,000.

The Company  believes that cash generated from  operations and borrowings  under
its credit  agreements  will be sufficient to finance the Company's  operations,
including anticipated capital expenditures, through fiscal 1998.
<PAGE>
Seasonality

The  Company's  transit  advertising  revenues  have  exhibited  some  degree of
seasonality.  Typically,  the Company experiences its lowest revenues during the
first  quarter of each year.  The  Company  expects  this trend to  continue.  A
reduction  in revenues in any quarter is likely to result in a  period-to-period
decline in operating performance and net income.


Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits
     (27)          Financial Data Schedule


(b) No reports on Form 8-K were filed by the Company  during the  quarter  ended
May 31, 1998.



Signature

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                              Obie Media Corporation


Date    July 14, 1998         By: /s/ James W. Callahan
                                 ----------------------
                                 James W. Callahan
                                 Chief Financial Officer

                                 Signing on behalf of the registrant and
                                 as principal financial and accounting officer