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

                                   FORM 10-Q

              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTER ENDED SEPTEMBER 30, 1998       COMMISSION FILE NUMBER 000-23177

================================================================================
                             PREVIEW TRAVEL, INC.

             DELAWARE                                   94-2965892
  (State or other jurisdiction of          (I.R.S. Employer Identification No.)
  incorporation or organization)

                   747 FRONT STREET, SAN FRANCISCO, CA 94111

                                (415) 439-1200

================================================================================

     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 [_]

  As of September 30, 1998, there were 13,553,550 shares of the registrant's
Common Stock outstanding.



<PAGE>
















                                     INDEX
                                     -----



PART I.   FINANCIAL INFORMATION

     ITEM 1.   FINANCIAL STATEMENTS.

               Condensed consolidated balance sheets at September 30, 1998
               and December 31, 1997

               Condensed consolidated statements of operations for the
               three and nine months ended September 30, 1998 and 1997

               Condensed consolidated statements of cash flows for the
               nine months ended September 30, 1998 and 1997

               Notes to condensed consolidated financial statements

     ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
               AND RESULTS OF OPERATIONS.

PART II.  OTHER INFORMATION

     ITEM 1.   LEGAL PROCEEDINGS.

     ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS.

     ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.

     ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     ITEM 5.   OTHER INFORMATION.

     ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.


SIGNATURES




<PAGE>










PART I.   FINANCIAL INFORMATION
ITEM 1.        FINANCIAL STATEMENTS.


                     PREVIEW TRAVEL, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                      September 30,December 31,
                                                      1998         1997
                                                      -----------  -----------
                                                      (unaudited)
<S>                                                   <C>          <C>
                    ASSETS
Cash and cash equivalents..........................      $27,130      $27,912
Marketable securities..............................       41,843          750
Accounts receivable, net...........................        3,099        1,990
Other assets.......................................        2,735        6,087
                                                      -----------  -----------
  Total current assets.............................       74,807       36,739
Film library, net..................................        2,026        2,402
Property and equipment, net........................        5,409        3,644
                                                      -----------  -----------
  Total assets.....................................      $82,242      $42,785
                                                      ===========  ===========

     LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable...................................         $506       $2,189
Accrued liabilities................................        3,595        2,480
Deferred revenues..................................          166          255
Current portion of capital lease obligations.......        1,357          882
                                                      -----------  -----------
  Total current liabilities........................        5,624        5,806
Capital lease obligations, less current portion....        2,051        1,614
                                                      -----------  -----------
  Total liabilities................................        7,675        7,420


Stockholders' equity:
  Common stock.....................................           14           11
  Additional paid-in capital.......................      115,161       61,676
  Other stockholders' equity.......................         (393)        (539)
  Accumulated deficit..............................      (40,215)     (25,783)
                                                      -----------  -----------
  Total stockholders' equity.......................       74,567       35,365
                                                      -----------  -----------
Total liabilities and stockholders' equity.........      $82,242      $42,785
                                                      ===========  ===========
</TABLE>
  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.
<PAGE>



                     PREVIEW TRAVEL, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                          Three Months Ended  Nine Months Ended
                                         ------------------- -------------------
                                          Sept 30,  Sept 30,  Sept 30,  Sept 30,
                                         1998      1997      1998      1997
                                         --------- --------- --------- ---------
<S>                                      <C>       <C>       <C>       <C>
Revenues:
  Online................................   $3,956    $1,556    $9,435    $4,226
  Television............................    1,650     1,845     5,000     5,901
                                         --------- --------- --------- ---------
       Total revenues...................    5,606     3,401    14,435    10,127
                                         --------- --------- --------- ---------
Cost of revenues:
  Online................................    1,646       909     4,293     2,672
  Television............................    1,246     1,450     3,882     4,339
                                         --------- --------- --------- ---------
       Total cost of revenues...........    2,892     2,359     8,175     7,011
                                         --------- --------- --------- ---------
Gross profit............................    2,714     1,042     6,260     3,116
                                         --------- --------- --------- ---------
Operating expenses:
  Marketing and sales...................    5,593     2,024    15,148     4,540
  Research and development..............    1,037       501     2,619     1,202
  General and administrative............    1,745     1,031     4,711     2,954
                                         --------- --------- --------- ---------
       Total operating expenses.........    8,375     3,556    22,478     8,696
                                         --------- --------- --------- ---------
  Loss from operations..................   (5,661)   (2,514)  (16,218)   (5,580)
Interest income (expense), net..........      897       (17)    1,822         3
                                         --------- --------- --------- ---------
  Loss before income taxes..............   (4,764)   (2,531)  (14,396)   (5,577)
Income tax expense......................      (15)       (1)      (36)       (2)
                                         --------- --------- --------- ---------
Net loss................................  ($4,779)  ($2,532) ($14,432)  ($5,579)
                                         ========= ========= ========= =========

Basic and diluted net loss per share....   ($0.35)   ($1.44)   ($1.15)   ($3.24)
                                         ========= ========= ========= =========
Weighted average shares outstanding
  used in per share calculations........   13,488     1,753    12,528     1,723
                                         ========= ========= ========= =========

SUPPLEMENTAL INFORMATION
Gross bookings..........................  $57,563   $22,074  $142,965   $54,007
                                         ========= ========= ========= =========
</TABLE>
  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.
<PAGE>

                     PREVIEW TRAVEL, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                             Nine Months Ended
                                                                 September 30,
                                                           ----------------------
                                                           1998        1997
                                                           ----------  ----------
<S>                                                        <C>         <C>
Cash flows from operating activities:
 Net loss................................................   ($14,432)    ($5,579)
 Adjustments to reconcile net loss to net cash
  provided by (used in) operating activities:
  Depreciation and amortization..........................      1,369         697
  Amortization of film library...........................        822         959
  Unearned compensation..................................        107          34
  Changes related to issuance of warrants................         --         130
  Changes in operating assets and liabilities............      2,136        (457)
                                                           ----------  ----------
    Net cash provided by (used
     in) operating activities............................     (9,998)     (4,216)
                                                           ----------  ----------
Cash flows from investing activities:
 Acquisition of property and equipment...................     (1,912)       (261)
 Purchase of marketable securities.......................    (41,093)         --
 Additions to film library...............................       (446)       (530)
                                                           ----------  ----------
    Net cash used in investing
     activities..........................................    (43,451)       (791)
                                                           ----------  ----------
Cash flows from financing activities:
 Proceeds from borrowings on long-term debt..............         --       1,350
 Payment of long-term debt...............................         --      (3,350)
 Payments on equipment note..............................         --        (103)
 Payments on obligations under capital leases............       (860)       (521)
 Proceeds from repayment of stockholder notes............        141         207
 Proceeds from issuance of common stock..................      1,006         112
 Proceeds from issuance of common stock-IPO, net.........        (39)         --
 Proceeds from issuance of common stock-secondary, net...     52,419          --
 Proceeds from issuance of preferred stock...............         --      14,487
 Proceeds from stock warrant exercises...................         --         449
                                                           ----------  ----------
    Net cash provided by (used
     in) financing activities............................     52,667      12,631
                                                           ----------  ----------
     Net increase (decrease) in cash.....................       (782)      7,624
Cash and cash equivalents, beginning of period...........     27,912       6,016
                                                           ----------  ----------
Cash and cash equivalents, end of the period.............    $27,130     $13,640
                                                           ==========  ==========
</TABLE>
  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.
<PAGE>

PREVIEW TRAVEL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - The Company and Basis of Presentation

Preview Travel, Inc. (the "Company") is a leading provider of 
branded online travel services for leisure and small business travelers. 
The Company operates its own Web sites (www.previewtravel.com, 
www.reservations.com and www.vacations.com), the primary travel service 
on America Online, Inc. ("AOL") (AOL keyword: previewtravel) and co-
branded travel Web sites with Excite, Inc. (City.Net) and with Lycos, 
Inc. ("Lycos"). Through its News Travel Network, Inc. subsidiary, the 
Company produces entertainment programming for broadcast and cable 
television and the in-flight markets. In addition to its reservation and 
ticketing service, the Company offers vacation packages, discount and 
promotional fares, travel news and destination content, including content 
licensed from Fodor's Travel Publications, Inc. Preview Travel, Inc. 
(formerly Preview Media, Inc.) was incorporated in California in March 
1985 and was reincorporated in Delaware in November 1997. 
The accompanying unaudited condensed consolidated financial 
statements reflect all adjustments which, in the opinion of management, 
are necessary for a fair presentation of the results for the period 
shown. The results of operations for such periods are not necessarily 
indicative of the results expected for the full fiscal year or for any 
future period.
These financial statements should be read in conjunction with the 
financial statements and related notes included in the Company's Annual 
Report on Form 10-K for the year ended December 31, 1997.

Note 2 - Recent Accounting Pronouncements

The Company has adopted the provisions of Statement of Financial 
Accounting Standards No. 130, "Reporting Comprehensive Income," effective 
January 1, 1998. This statement requires the disclosure of comprehensive 
income and its components in a full set of general-purpose financial 
statements. Comprehensive income is defined as net income plus revenues, 
expenses, gains and losses that, under generally accepted accounting 
principles, are excluded from net income. The components of comprehensive 
income, which are excluded from net income, are not significant 
individually or in the aggregate, and therefore, no separate statement of 
comprehensive income has been presented.
In June, 1997, the Financial Accounting Standards Board issued 
Statement of Financial Standards No. 131, "Disclosure About Segments of 
an Enterprise and Required Information," which is effective for the year 
ending December 31, 1998. The Company is considering additional 
disclosures, if any, which will be required by this pronouncement.

Note 3 - Commitments 

In September 1997, the Company entered into agreements with AOL, a 
related party, and Excite, Inc. ("Excite") under which these companies 
are obligated to deliver minimum numbers of annual page views to the 
Company through the online areas featuring the Company's travel services. 
In connection with those services, the Company has made aggregate 
payments to AOL and Excite totaling $9.0 million as of September 30, 
1998, and is obligated to make additional aggregate payments to AOL and 
Excite totaling $3.1 million in 1998, $10.9 million in 1999, $12.4 
million in 2000 and 2001 and $8.2 million in 2002. The Company is also 
obligated to pay a percentage of commissions earned by the Company in 
excess of certain thresholds. To retain the right to be the primary 
provider of travel services on AOL, the Company must achieve specified 
levels of annual travel service bookings. 
In March 1998, the Company entered into an agreement with Lycos, a 
search engine provider, for distribution and promotion of the Company's 
online travel services. Over the two-year term of the agreement, the 
Company is obligated to pay minimum amounts totaling $4.3 million, of 
which $1.1 million has been paid as of September 30, 1998, as well as a 
portion of commissions earned by the Company in excess of certain 
thresholds under the agreement. In addition, the Company has committed to 
purchase approximately $500,000 in advertising on Lycos' sites, which the 
Company may resell to third parties. 
The Company has also entered into distribution and licensing 
agreements with other third parties requiring the Company to make 
payments in the aggregate of $2.7 million during the term of such 
agreements, of which $364,000 has been paid as of September 30, 1998.

Note 4 - Net Income (Loss) Per Share

In accordance with the requirements of Statement of Financial 
Accounting Standards No. 128, "Earnings Per Share," a reconciliation of 
the numerator and denominator of basic and diluted EPS is provided as 
follows (in thousands, except per share amounts).

<TABLE>
<CAPTION>
                                          Three Months Ended  Nine Months Ended
                                         ------------------- -------------------
                                          Sept 30,  Sept 30,  Sept 30,  Sept 30,
                                         1998      1997      1998      1997
                                         --------- --------- --------- ---------
<S>                                      <C>       <C>       <C>       <C>
Numerator--Basic and diluted EPS
Net loss................................  ($4,779)  ($2,532) ($14,432)  ($5,579)
                                         ========= ========= ========= =========

Denominator--Basic and diluted EPS
Weighted average common stock
 outstanding............................   13,488     1,753    12,528     1,723
                                         ========= ========= ========= =========

Basic and diluted earnings per share....   ($0.35)   ($1.44)   ($1.15)   ($3.24)
                                         ========= ========= ========= =========
</TABLE>

Note 5 - Secondary Offering

In May 1998, the Company completed a secondary offering of 
3,519,000 shares of common stock to the public at a price of $28.50 per 
share. Of these shares, 1,959,000 shares were sold by the Company and the 
remaining 1,560,000 shares were sold by certain selling stockholders. The 
Company received approximately $52.5 million in cash, net of the 
underwriting discount and offering expenses.  

Note 6 - Subsequent Events

Proposed Sale of Television Operations
In October 1998,  the Company announced its intention to enter 
into an agreement with NewsNet Central, Inc. ("NNC"), under which 
substantially all of the assets of the Company's wholly owned subsidiary, 
News Travel Network, Inc. ("NTN"), will be transferred to NNC in 
exchange for common stock of NNC, notes and warrants to purchase 
additional common stock of NNC. James Hornthal, the Company's chairman of 
the Board of Directors is an investor in NNC. The Company expects  that 
all of the Company's employees engaged in NTN's business will become 
employees of NNC upon the closing of the proposed transaction with NNC. 
The proposed transaction (the "Television Operations Divestiture") is 
expected to be completed by the end of 1998.
In addition, the Company intends to enter into a Services Agreement 
with NNC that will provide for the following:  (a) the sublease to NNC of 
the Company's television operations facilities at One Beach Street in San 
Francisco, (b) the Company's right to act as the exclusive advertising 
sales representative for NTN's Travel Update programs, (c) a perpetual, 
nonexclusive, royalty-free license to use NTN's travel video library 
(including any enhancements thereto) and (d) the continued branding of 
NTN's "Travel News" and "Travel Update" programs with "Preview 
Travel" marks. 
If the Television Operations Divestiture is completed, the Company 
expects to incur a one-time charge of approximately $4.0 million related 
to the sale of the television assets. The proposed transaction is subject 
to approval by the Board of Directors, the execution of definitive 
agreements between the Company and NNC and closing of the transactions 
thereunder. 

Adoption of Stockholder Rights Plan

In October 1998, the Board of Directors adopted a stockholders 
rights plan under which rights will be distributed to stockholders of 
record on November 12, 1998. The rights are not exercisable until ten 
days after a person or group announces the acquisition of 20 percent or 
more of the Company's outstanding Common Stock or the commencement of a 
tender offer which would result in ownership by the person or group of 20 
percent or more of the outstanding Common Stock. Each right will entitle 
stockholders to buy one one-thousandth of a share of the Company's Series 
A Participating Preferred Stock at an exercise price of $100. The Company 
will be entitled to redeem the rights at $0.01 per right at any time on 
or before the tenth day following acquisition by a person or group of 20 
percent or more of the Company's Common Stock. If a person or group 
acquires 20 percent or more of The Company's Common Stock prior to 
redemption of the rights, the rights will entitle stockholders other than 
the potential acquiror to purchase, at the then current exercise price, 
that number of shares of the Company's Common Stock (or, in certain 
circumstances as determined by the Board of Directors, cash, other 
property or other securities) having a market value at that time of twice 
the exercise price. If, after the tenth day following acquisition by a 
person or group of 20 percent or more of the Company's Common Stock, the 
Company sells more than 50 percent of its assets or earning power or is 
acquired in a merger or other business combination transaction, the 
acquiror must assume the obligations under the rights, and the rights 
will become exercisable to acquire common stock of the acquiror at the 
discounted price. Under certain circumstances, the Company's Board of 
Directors may also exchange the rights (other than those owned by the 
acquiror or its affiliates) for its Common Stock at an exchange ratio of 
one share of Common Stock per right. 


Item 2. Management's Discussion and Analysis of Financial Condition 
and Results of Operations

This Management's Discussion and Analysis of Financial Condition 
and Results of Operations and other parts of this Form 10-Q contain 
forward-looking statements that involve risks and uncertainties. Words 
such as "anticipates," "expects," "intends," "plans," "believes," 
"seeks," "estimates," and similar expressions identify such forward-
looking statements. These statements are not guarantees of future 
performance and are subject to certain risks and uncertainties that could 
cause actual results to differ materially from those expressed or 
forecasted. Factors that might cause such a difference include, but are 
not limited to, those discussed in the section entitled "Risk Factors" 
and those appearing elsewhere in this Form 10-Q. Readers are cautioned 
not to place undue reliance on these forward-looking statements, which 
reflect management's analysis only as of the date hereof. The Company 
assumes no obligation to update these forward-looking statements to 
reflect actual results or changes in factors or assumptions affecting 
such forward-looking statements. 

Overview

Preview Travel is a leading provider of branded online travel 
services for leisure and small business travelers. Since its inception in 
1985, the Company has operated as a producer of travel-related 
programming for broadcast television stations and cable networks around 
the world. In 1994, the Company began offering travel services by 
developing television programs ("infomercials") designed to generate 
interest in vacation packages offered by the Company. The Company sold 
these vacation packages directly to consumers by telephone. At the time, 
the commercial online services industry was beginning to develop as a new 
medium to entertain, inform and transact with consumers.  In response to 
strong interest in travel from its television audience and in recognition 
of new opportunities presented by the online market, the Company adopted 
a new business model to address this demand in a more cost-effective 
manner. Consequently, the Company shifted its business focus and 
resources from infomercials to online travel services. The Company 
launched its online service on America Online ("AOL") in January 1995 
and on the Web in December 1995, providing users with access to travel 
information and the ability to book travel services by telephone. In May 
1996, the Company launched its online airline reservation service and, in 
the first half of 1997, enhanced its online reservation service to 
include hotels and car rentals. In April 1997, the Company launched its 
co-branded Web site for Excite's Travel Channel (City.Net). In the third 
quarter of 1997, the Company expanded and extended its relationships with 
Excite and AOL, respectively, by entering into new five-year distribution 
agreements. In February 1998, the Company launched its Destinations 
Guides feature created with content licensed from Fodor's. In March 1998, 
the Company entered into an agreement with Lycos, under which the Company 
serves as the exclusive multiservice provider of travel reservation 
services for Lycos' Travel Web Guide and Travel Network.  In July 1998, 
the Company began offering real-time bookings of vacation and cruise 
packages through strategic partnerships with American Airlines Vacations 
and Royal Caribbean Cruises Ltd. 

Proposed Sale of Television Operations. In October 1998, the 
Company announced its intention to enter into an agreement with NewsNet 
Central, Inc. ("NNC"), under which substantially all of the assets of 
the Company's wholly owned subsidiary, News Travel Network, Inc. 
("NTN"), will be transferred to NNC in exchange for common stock of NNC, 
notes and warrants to purchase additional common stock of NNC. James 
Hornthal, the Company's chairman of the Board of Directors is an investor 
in NNC. The Company expects  that all of the Company's employees engaged 
in NTN's business will become employees of NNC upon the closing of the 
proposed transaction with NNC. The proposed transaction (the "Television 
Operations Divestiture") is expected to be completed by the end of 1998.
In addition, the Company intends to enter into a Services Agreement 
with NNC that will provide for the following:  (a) the sublease to NNC of 
the Company's television operations facilities at One Beach Street in San 
Francisco, (b) the Company's right to act as the exclusive advertising 
sales representative for NTN's Travel Update programs, (c) a perpetual, 
nonexclusive, royalty-free license to use NTN's travel video library 
(including any enhancements thereto) and (d) the continued branding of 
NTN's "Travel News" and "Travel Update" programs with "Preview 
Travel" marks. 

If the Television Operations Divestiture is completed, the Company 
expects to incur a one-time charge of approximately $4.0 million related 
to the sale of the television assets. The Company further expects, that 
in 1999, as a result of the proposed transaction, the Company will not 
incur approximately $3.0 to $4.0 million in operating expenses previously 
associated with the television operations. The proposed transaction is 
subject to approval by the Board of Directors, the execution of 
definitive agreements between the Company and NNC and closing of the 
transactions thereunder. There can be no assurances that such agreements 
will be executed or that the transaction will be consummated.
Overview of Television Operations. From inception through 1994, the 
Company derived all of its revenues from its television operations. In 
1995, 1996, 1997 and the nine months ended September 30, 1998, the 
Company's television operations accounted for approximately 94%, 79%, 56% 
and 35% of the Company's total revenues, respectively. Television 
revenues are derived primarily from fees associated with sales of 
advertising time and the licensing of travel-related news and 
entertainment programming. Program license revenues are recognized when 
all of the following conditions are met: (i) the license period begins, 
(ii) the license fee and the production costs are known and (iii) the 
program has been accepted by the licensee and is available for telecast. 
Advertising revenues are recognized when all the terms of the advertising 
agreement are met, and advertising is shown on various media as 
designated by the agreement.  

The Company produces travel-related news inserts and news and 
entertainment programs that are syndicated in exchange for either cash or 
commercial advertising time. The Company also syndicates third party news 
inserts. The local commercial advertising time earned for providing these 
programs is aggregated and sold to advertisers seeking to reach a 
national audience. To fulfill such advertisers' requirements to reach a 
national audience, the Company from time to time purchases commercial 
advertising time for resale in selected markets. In addition, the Company 
produces in-flight programs, primarily for Northwest Airlines. In 1996, 
the Company discontinued its practice of exchanging commercial 
advertising time on its news and entertainment programming for travel 
services such as airline tickets, hotel rooms and car rentals ("travel 
inventory"). During the year ended December 31, 1996, the Company 
significantly reduced its travel inventory and wrote off the remaining 
balance of unused travel inventory.

In 1995 and 1996, advertising revenue from MCI comprised 49% and 
58%, respectively, of the Company's total television revenues. Commencing 
in the first quarter of 1997, MCI began to phase out its sponsorship of 
the Company's television programming, which phase-out was completed in 
the quarter ended September 30, 1997. MCI continues to advertise in the 
Company's in-flight programming. Revenues attributable to MCI comprised 
30% and 7% of the Company's total television revenues for the year ended 
December 31, 1997 and the nine months ended September 30, 1998, 
respectively. Because the Company does not expect to receive any 
additional revenues from MCI for television sponsorships, the Company 
expects revenues attributable to MCI in 1998 to decrease significantly 
from that in 1997. The Company currently anticipates that Best Buy Co., 
Inc. ("Best Buy") will account for a significant percentage of the 
Company's television advertising revenues in future periods. Revenues 
attributable to Best Buy, which began advertising with the Company in 
March 1998, comprised 23% of the Company's total television revenues for 
the nine months ended September 30, 1998. As is common in the television 
industry, the Company does not have a long-term contract or arrangement 
with Best Buy that guarantees advertising revenues from Best Buy. As a 
result, if advertising revenues from Best Buy do not materialize to the 
extent anticipated by the Company or if such advertising revenues 
materialize and Best Buy then phases out its sponsorship of the Company's 
television programming, overall revenues from the Company's television 
operations would be materially and adversely affected, which could 
adversely affect the Company's business operating results and financial 
condition. See "Risk Factors-Risks Associated with Advertising 
Revenues" and "-Risks Associated with Television Operations." 

Although the Company's television operations have had positive 
operating cash flow in the past, the Company experienced negative 
operating cash flow from television operations in 1997 and in the first 
nine months of 1998 and expects to experience negative operating cash 
flow from television operations at least until completion of the 
Television Operations Divestiture. As a result of the amortization of the 
Company's film library as well as depreciation and other factors, the 
Company's television operations incurred a net operating loss in 1997 and 
in the first nine months of 1998 and the Company anticipates that its 
television operations will continue to incur net operating losses at 
least until completion of the Television Operations Divestiture. As a 
result of these losses and the proposed divestiture of the television 
operations, as well as the Company's anticipated increase in operating 
expenses for its online operations, the Company believes that its future 
success depends on its ability to significantly increase revenues from 
its online operations, for which it has a limited operating history. See 
"Risk Factors-Limited Operating History of Online Business; History of 
Net Operating Losses; Accumulated Deficit," "-Anticipated Losses and 
Negative Cash Flow," "-Dependence on the Travel Industry," "-
Uncertain Acceptance of the Preview Travel Brand; Dependence on Increased 
Bookings," "-Dependence on Continued Growth of Online Commerce," "-
Risks Associated with Advertising Revenues," "-Management of Potential 
Growth," "-Risks Associated with Television Operations" and "-Risks 
Associated with International Expansion." 

Overview of Online Operations. The Company's online revenues are 
predominantly comprised of commissions paid by airlines, hotels, rental 
car agencies, cruise lines and vacation packagers (collectively, "travel 
suppliers") for travel services booked through the Company, segment fees 
received from its GDS supplier and the sale of advertisements on the 
Company's online sites. In addition, certain travel suppliers pay 
performance-based compensation known as "override commissions" or 
"overrides." Commission revenues for air travel, hotel rooms, car 
rentals and vacation packages, net of allowances for cancellations, are 
recognized upon the confirmation of the reservation. Overrides are 
recognized on an accrual basis once the amount has been confirmed with 
the travel supplier, which generally reflects the performance for a prior 
quarterly period.

The Company commenced its online airline reservation service 
in May 1996 and enhanced the service to include hotels and car rentals in 
the first half of 1997. In July 1998, the Company began offering real-
time bookings of vacation and cruise packages through strategic 
partnerships with American Airlines Vacations and Royal Caribbean Cruises 
Ltd. The Company's online travel services have experienced substantial 
growth since the Company first enabled customers to book travel services 
online in May 1996. Gross bookings of travel services online increased 
from approximately $2.8 million in the second quarter of 1996 to $57.6 
million in the third quarter of 1998, which resulted in online revenues, 
including advertising revenue, of approximately $424,000 and $4.0 
million, respectively, for the corresponding periods. The commission 
rates paid by travel suppliers, in addition to overrides, are determined 
by individual travel suppliers and are subject to change. Historically, 
typical standard base commission rates paid by travel suppliers have been 
approximately 10% for hotel reservations, 5% to 10% for car rentals and 
10% to 15% for cruises and vacation packages. During the quarter ended 
June 30, 1997, the commissions paid by most of the major airlines for 
online reservations was changed from a typical base rate of approximately 
8% to approximately 5% (excluding overrides). In addition, in a 
continuation of this trend, in the first half of 1998, one major airline 
reduced its fixed rate commission structure for online roundtrip ticket 
sales to ten dollars and a second major airline further reduced its cap 
(the maximum amount of commissions paid per ticket) on per-roundtrip 
ticket commissions payable for online ticket sales to ten dollars. These 
reductions were followed by similar reductions made by other smaller 
airlines. The Company expects that its weighted average commission on 
online transaction revenue will decline as a result of these reductions. 
Currently, the Company earns an average commission of approximately 4% on 
the sale of airline tickets. During the first quarter of 1998, one hotel 
chain eliminated commissions paid to the Company and other online travel 
service providers for online bookings. In response, the Company 
discontinued offering bookings for that hotel chain. There can be no 
assurance that other hotel chains or other travel suppliers will not 
reduce current industry commission rates or eliminate such commissions 
entirely, which could, individually or in the aggregate, have a material 
adverse effect on the Company's business, operating results and financial 
condition. See "Risk Factors-Reliance on Travel Suppliers; Potential 
Adverse Changes in Commission Payments." 

Travel services sold through the AOL network (including the primary 
AOL service and AOL.COM) accounted for 62%, 52%, 38% and 35% of the 
Company's gross bookings for the three months ended December 31, 1997, 
March 31, 1998, June 30, 1998 and September 30, 1998, respectively. The 
decline in the percentage of gross bookings sold through the AOL network 
is due to faster growth in gross bookings sold through the Company's own 
Web site. Travel services sold through Excite accounted for 15%, 16%, 18% 
and 15% of the Company's gross bookings for the three months ended 
December 31, 1997, March 31, 1998, June 30, 1998 and September 30, 1998, 
respectively. The Company's arrangements with AOL and Excite are expected 
to continue to represent significant distribution channels for the 
Company's travel services, and the Lycos agreement is expected to 
represent a significant distribution channel in the future. Any 
termination of any or all of the Company's agreements with AOL, Excite or 
Lycos would likely have a material adverse effect on the Company's 
business, operating results and financial condition. Since launching its 
online operations, the Company's cost of revenues and operating expenses 
have grown substantially and are expected to continue to grow 
substantially in absolute dollars for the foreseeable future. In 
particular, the Company's agreements with AOL, Excite and Lycos require 
minimum aggregate payments of approximately $60.3 million during the 
terms of such agreements in exchange for their providing distribution, 
marketing and other services. There can be no assurance that the Company 
will achieve sufficient online traffic, travel bookings or commissions to 
realize economies of scale that justify the Company's significant fixed 
financial obligations to AOL, Excite and Lycos. Further, there can be no 
assurance that the Company will satisfy the minimum levels of travel 
services bookings, or provide satisfactory content on the specified time 
schedule, required to maintain the AOL and Excite agreements. Failure to 
do either of the foregoing would likely have a material adverse effect on 
the Company's business, operating results and financial condition. See 
"Risk Factors-Reliance on Distribution Agreements with America Online, 
Excite and Lycos" and "-Risk of Termination of Distribution Agreement 
with America Online." 

Gross Margins. Gross margins may be impacted by a number of 
different factors, including the mix of television revenues versus online 
revenues, the mix of online commission revenues versus online advertising 
revenues, the mix of travel services sold, the mix of revenues from AOL, 
Excite, Lycos and the Company's Web site, the mix of airline ticket 
commissions (which vary from airline to airline) and the amount of 
override commissions. The Company typically realizes higher gross margins 
on advertising revenues than commission revenues, higher commissions on 
vacation packages than hotel rooms and car rentals, higher commissions on 
hotel rooms and car rentals than airline tickets, higher gross margins on 
advertising revenues from its own Web site than through AOL, Excite or 
Lycos, higher commissions from certain airlines than others, and higher 
gross margins in periods of higher overrides. Any change in one or more 
of the foregoing factors could materially adversely affect the Company's 
gross margins and operating results in future periods. See "Risk 
Factors-Unpredictability of Future Revenues; Fluctuations in Quarterly 
Results."

Anticipated Losses. The Company has incurred significant operating 
losses and, as of September 30, 1998, had an accumulated deficit of $40.2 
million. The Company believes that its success will to a large part 
depend on its ability to greatly increase sales volume to realize 
economies of scale. As the Company increases its investments in product 
development, advertising, international expansion, customer service and 
facilities, the Company expects to continue to incur significant 
operating losses on a quarterly and annual basis for the foreseeable 
future, and the rate at which such losses will be incurred is expected to 
increase significantly from current levels, resulting in corresponding 
decreases in working capital, total assets and stockholders' equity. In 
particular, the Company's operating expenses are expected to increase 
substantially in 1998 as compared to 1997, primarily due to commencement 
of the Company's payment obligations to AOL, Excite, Lycos and other 
strategic partners and promotional and marketing expenses for the 
Company's online travel services, resulting in corresponding increases in 
operating losses and decreases in working capital, total assets and 
stockholders' equity. See "Risk Factors-Limited Operating History of 
Online Business; History of Net Operating Losses; Accumulated Deficit" 
and "-Anticipated Losses and Negative Cash Flow."

Results Of Operations

The following table sets forth, for the periods indicated, the 
percentage relationship of certain items from the Company's condensed 
consolidated statement of operations to total revenues, except as 
indicated:

<TABLE>
<CAPTION>
                                          Three Months Ended  Nine Months Ended
                                         ------------------- -------------------
                                          Sept 30,  Sept 30,  Sept 30,  Sept 30,
                                         1998      1997      1998      1997
                                         --------- --------- --------- ---------
<S>                                      <C>       <C>       <C>       <C>
Revenues:
  Online................................     70.6%     45.8%     65.4%     41.7%
  Television............................     29.4%     54.2%     34.6%     58.3%
                                         --------- --------- --------- ---------
       Total revenues...................    100.0%    100.0%    100.0%    100.0%
                                         --------- --------- --------- ---------
Cost of revenues:
  Online................................     29.4%     26.7%     29.7%     26.4%
  Television............................     22.2%     42.7%     26.9%     42.8%
                                         --------- --------- --------- ---------
       Total cost of revenues...........     51.6%     69.4%     56.6%     69.2%
                                         --------- --------- --------- ---------
Gross profit............................     48.4%     30.6%     43.4%     30.8%
                                         --------- --------- --------- ---------
Operating expenses:
  Marketing and sales...................     99.8%     59.5%    104.9%     44.8%
  Research and development..............     18.5%     14.7%     18.1%     11.9%
  General and administrative............     31.1%     30.3%     32.8%     29.2%
                                         --------- --------- --------- ---------
       Total operating expenses.........    149.4%    104.5%    155.8%     85.9%
                                         --------- --------- --------- ---------
  Loss from operations..................   -101.0%    -73.9%   -112.4%    -55.1%
Interest income (expense), net..........     16.0%     -0.5%     12.7%      0.0%
                                         --------- --------- --------- ---------
  Loss before income taxes..............    -85.0%    -74.4%    -99.7%    -55.1%
Income tax expense......................      0.2%      0.0%      0.3%      0.0%
                                         --------- --------- --------- ---------
Net loss................................    -85.2%    -74.4%   -100.0%    -55.1%
                                         ========= ========= ========= =========

AS A PERCENTAGE OF RELATED REVENUES:
Cost of online revenues.................     41.6%     58.4%     45.5%     63.2%
Cost of television revenues.............     75.5%     78.6%     77.6%     73.5%
</TABLE>
<PAGE>

Comparison of Three Months and Nine Months Ended September 30, 1998 and 
1997

   Revenues

Online Revenues. Online revenues were $4.0 million and $9.4 million 
for the third quarter and first nine months of 1998, respectively, which 
represent increases of 154% and 123% when compared to the corresponding 
periods in 1997. The increases were due primarily to increases in the 
Company's customer base and  increases in paid advertising on the 
Company's Web site, partially offset by lower commissions paid to online 
travel services by certain airlines. The Company's database of customer 
profiles grew from approximately 2.1 million profiles as of September 30, 
1997 to over 5.6 million profiles as of September 30, 1998. As a result 
of the reductions in commissions paid on online sales of tickets by 
certain airlines, the Company anticipates that the average commissions 
paid to the Company for airline tickets as a percentage of gross bookings 
will decline in future periods. Online advertising revenues were $1.0 
million and $1.8 million for the third quarter and first nine months of 
1998, respectively, which represent increases of 452% and 415% when 
compared to the corresponding periods in 1997. Gross bookings were $57.6 
million and $143.0 million for the third quarter and first nine months of 
1998, respectively, which represent increases of 161% and 165% when 
compared to the corresponding periods in 1997.  The increases in gross 
bookings were due primarily to the expansion of the Company's travel 
service offerings, strategic relationships and customer base, as well as 
repeat purchases by existing customers. Visits to the Company's online 
areas were 22.2 million and 63.1 million for the third quarter and first 
nine months of 1998, respectively, which represent increases of 150% and 
258% when compared to the corresponding periods in 1997. 

During the third quarter of 1998, the percentage of online revenues 
derived from airline commissions, nonairline commissions and the sale of 
advertising on the Company's online sites was 55%, 20% and 25%, 
respectively, as compared to 62%, 24% and 11%, respectively, during the 
third quarter of 1997. In addition, during the third quarter of 1997, 3% 
of online revenues were derived from fees paid by AOL to the Company for 
AOL connect time. Fees for AOL connect time were not paid to the Company 
after the Company entered into a new distribution agreement with AOL in 
the third quarter of 1997. During the first nine months of 1998, the 
percentage of online revenues derived from airline commissions, 
nonairline commissions and the sale of advertising on the Company's 
online sites was 61%, 20% and 19%, respectively, as compared to 73%, 13% 
and 8%, respectively, during the first nine months of 1997. In addition, 
during the first nine months of 1997, 6% of online revenues were derived 
from fees paid by AOL to the Company for AOL connect time. 

For the fourth quarter 1998, the Company expects that seasonality 
and the performance of the Company's distribution agreements will 
moderate growth in gross bookings and online revenues.

In 1996, the Company marketed its travel services primarily through 
AOL. The Company expanded its online presence beyond AOL by marketing its 
own Web site and by entering into strategic relationships with Excite in 
1997 and with Lycos in March 1998. The Company's gross bookings from 
Excite, Lycos and the Web comprised approximately 65% and 60% of the 
Company's total gross bookings for the third quarter and first nine 
months of 1998, respectively. 

Television Revenues. Television revenues were $1.7 million and $5.0 
million for the third quarter and first nine months of 1998, 
respectively, which represent decreases of 11% and 15% when compared to 
the corresponding periods in 1997, due primarily to decreases in cable 
television sales and facilities rental revenue. The Company expects 
television revenues to continue to decline in the fourth quarter of 1998 
compared to the same period in 1997. Advertising revenues constitute a 
majority of the Company's television revenues and comprised 70% and 61% 
of television revenues in the third quarters of 1998 and 1997, 
respectively, and 68% and 64% of television revenues in the first nine 
months of 1998 and 1997, respectively.

   Cost of Revenues 

Cost of Online Revenues. Cost of online revenues includes equipment 
and staffing costs associated with operating the Company's transaction 
system and customer reservation center, GDS charges, printing and 
delivery costs for tickets and costs associated with errors in ticket 
fulfillment. Cost of online revenues was $1.6 million and $4.3 million 
for the third quarter and first nine months of 1998, respectively, which 
represents increases of 81% and 61% when compared to the corresponding 
periods in 1997, primarily due to the increased volume of transactions in 
the third quarter and first nine months of 1998. As a percentage of 
online revenues, cost of online revenues decreased from 58.4% in the 
third quarter of 1997 to 41.6% in the third quarter of 1998 and from 
63.2% in the first nine months of 1997 to 45.5% in the first nine months 
of 1998. The Company's average cost per transaction declined from 
approximately $12.40 in the third quarter of 1997 to approximately $8.10 
in the third quarter of 1998, due to economies of scale resulting from 
increased transaction volumes, an increase in the number of electronic 
air tickets issued, which have a lower per transaction fulfillment cost 
than regular air tickets, and an increase in the number of car and hotel 
reservations, both of which typically have lower per transaction 
fulfillment costs than airline transactions. 

Cost of Television Revenues. Cost of television revenues includes 
advertising agency commissions, staffing costs, costs of custom 
productions that have a limited useful life, amortization costs relating 
to the Company's film library and the costs of purchasing commercial 
advertising time to fulfill advertiser requirements. Cost of television 
revenues was $1.2 million and $3.9 million for the third quarter and 
first nine months of 1998, respectively, which represents decreases of 
14% and 11% when compared to the corresponding periods in 1997.  These 
decreases were due primarily to reduced production activity and cost 
reductions implemented at the end of 1997. As a percentage of television 
revenues, cost of television revenues decreased from 78.6% in the third 
quarter of 1997 to 75.5% in the third quarter of 1998 and increased from 
73.5% in the first nine months of 1997 to 77.6% in the first nine months 
of 1998 due to the allocation of costs over a variable revenue base. Film 
library amortization was $274,000 and $317,000 in the third quarter of 
1998 and 1997, respectively, and $822,000 and $959,000 in the first nine 
months of 1998 and 1997, respectively.

   Operating Expenses 

Marketing and Sales. Marketing and sales expenses consist primarily 
of payroll and related expenses, consulting fees, advertising, public 
relations and promotional expenditures and costs relating to the 
development and acquisition of content and distribution for the Company's 
online sites. Marketing and sales expenses were $5.6 million and $15.1 
million for the third quarter and first nine months of 1998, 
respectively, which represent increases of 176% and 234% when compared to 
the corresponding periods in 1997. As a percentage of total revenues, 
marketing and sales expenses increased from 59.5% in the third quarter of 
1997 to 99.8% in the third quarter of 1998 and from 44.8% in the first 
nine months of 1997 to 104.9% in the first nine months of 1998. The 
increase in marketing and sales expenses was attributable primarily to 
expenses associated with the Company's online operations, including the 
hiring of additional personnel for development of online content, 
expenditures related to the Company's strategic agreements with AOL, 
Excite and Lycos and increased advertising expenditures. The Company 
continues to pursue an aggressive branding and marketing campaign, 
including significant advertising expenditures. In addition, the Company 
is obligated to make minimum payments totaling $56 million to AOL and 
Excite over the term of its agreements with AOL and Excite, and $4.3 
million to Lycos over the two-year term of its agreement with Lycos, 
which payments will be accounted for as marketing and sales expense. As a 
result, the Company expects marketing and sales expenses to increase 
substantially from the third to the fourth quarter of 1998.

Research and Development. Research and development expenses consist 
principally of personnel and equipment expenses and consulting fees for 
development and enhancement of the Company's transaction processing 
system and online services, such as its Destinations Guides with Fodor's 
and online vacations booking capability, costs of content development in 
connection with the Company's strategic relationships with Excite, AOL 
and Lycos, and costs associated with network operations, systems and 
telecommunications infrastructure. Research and development expenses were 
$1.0 million and $2.6 million for the third quarter and first nine months 
of 1998, respectively, which represent increases of 107% and 118% when 
compared to the corresponding periods in 1997. As a percentage of total 
revenues, research and development expenses rose from 14.7% in the third 
quarter of 1997 to 18.5% in the third quarter of 1998 and from 11.9% in 
the first nine months of 1997 to 18.1% in the first nine months of 1998. 
The increase in research and development expenses was attributable 
primarily to increased staffing and consulting fees, as well as increased 
costs related to enhancing the capacity, features, content and 
functionality of the Company's online services and enhancing or updating 
transaction-processing systems. The Company believes that continued 
investment in research and development is critical to attaining the 
Company's strategic objectives and, as a result, expects research and 
development expenses to increase significantly in absolute dollars in 
future periods. 

General and Administrative. General and administrative expenses 
consist of payroll and related expenses for management, accounting and 
administrative personnel, recruiting, professional services, facilities, 
director and officer insurance, investor relations and other general 
corporate expenses. General and administrative expenses were $1.7 million 
and $4.7 million for the third quarter and first nine months of 1998, 
respectively, which represent increases of 69% and 59% when compared to 
the corresponding periods in 1997. As a percentage of total revenues, 
general and administrative expenses rose from 30.3% in the third quarter 
of 1997 to 31.1% in the third quarter of 1998 and from 29.2% in the first 
nine months of 1997 to 32.8% to the first nine months of 1998. The 
increase in general and administrative expenses was due primarily to 
increased salaries and expenses associated with the hiring of personnel 
related to the expansion of the Company's online operations and expenses 
associated with being a public company. The Company expects general and 
administrative expenses to increase significantly from the third to the 
fourth quarter of 1998 due to increased expenses for facilities, 
professional services, stockholder expenses and other corporate expenses.

Deferred Compensation.  The Company grants stock options to hire 
and retain employees. With respect to the grant of certain stock options 
to employees in 1997, the Company recorded aggregate deferred 
compensation of $570,000 in the third quarter of 1997. Deferred 
compensation is recorded as a reduction of stockholders' equity and is 
amortized ratably over the vesting period of the applicable options, 
generally four years. Amortization of deferred compensation in the third 
quarter and first nine months of 1998 for options granted was $35,000 and 
$107,000, respectively, and was $34,000 for both the third quarter and 
the first nine months of 1997. The Company currently expects to record 
amortization of deferred compensation for options granted of 
approximately $143,000, $143,000, $143,000 and $71,000 for 1998 
(including the amount for the first nine months of 1998 set forth above), 
1999, 2000 and 2001, respectively. The amortization of deferred 
compensation will be recorded as general and administrative expenses in 
such periods. 

   Interest Income (Expense)

Interest income, net of interest expense, was $0.9 million and $1.8 
million for the third quarter and first nine months of 1998, 
respectively, compared to net interest expense of $17,000 and net 
interest income of $3,000 for the corresponding periods in 1997. Interest 
expense is comprised primarily of interest on capital lease obligations. 
The increase in net interest income was attributable primarily to a 
reduction on borrowings under the Company's line of credit and interest 
income earned on higher cash and marketable securities balances in the 
first nine months of 1998, primarily from an equity financing completed 
in September 1997 and net proceeds from the Company's initial public 
offering in November 1997 and secondary public offering in May 1998. 

   Income Taxes

The provision for income taxes recorded in the second quarter and 
first nine months of 1998 represents minimum state tax expense and 
Delaware franchise taxes. The Company expects to incur a net loss for 
1998; therefore, no provision for federal income taxes has been recorded 
for the first nine months of 1998. 


Liquidity and Capital Resources

In November 1997, the Company completed an initial public offering 
of its common stock, resulting in net proceeds to the Company of 
approximately $24.6 million. Additionally, in May 1998, the Company 
completed a secondary public offering of its common stock, resulting in 
net proceeds to the Company of approximately $52.5 million.  Prior to the 
two public offerings, the Company had financed its operations primarily 
through private sales of common stock, convertible preferred stock and 
convertible notes, which totaled $34.7 million in aggregate net proceeds 
through 1997. As of September 30, 1998, the Company also had a $2.0 
million line of credit, of which approximately $1.1 million was 
available, based on 80% of the Company's qualifying accounts receivable. 

Cash used in operating activities was $10.0 million in the first 
nine months of 1998, attributable primarily to a net loss of $14.4 
million, partially offset by depreciation of $1.4 million and film 
library amortization of $822,000, as well as a decrease in net operating 
assets. Cash used in investing activities in the first nine months of 
1998 consisted primarily of $41.1 million for the purchase of marketable 
securities and $1.9 million for the acquisition of property and 
equipment. Cash provided by financing activities in the first nine months 
of 1998 of $52.7 million consisted primarily of proceeds from the 
Company's secondary stock offering. 

As of September 30, 1998, the Company had $27.1 million of cash and 
cash equivalents and $41.8 million of marketable securities. As of that 
date, the Company's principal commitments consisted of obligations 
outstanding under the agreements with AOL, Excite, Lycos and other 
strategic partners and under its lease obligations. Although the Company 
has no material commitments for capital expenditures, it anticipates an 
increase in its capital expenditures and lease commitments consistent 
with anticipated growth in operations, infrastructure and personnel. The 
Company may establish additional operations as it expands globally. In 
addition, pursuant to its arrangement with AOL, the Company is obligated 
to make minimum payments totaling $32 million, of which $7.5 million had 
been paid as of September 30, 1998, and to pay a percentage of 
commissions earned by the Company in excess of certain thresholds. 
Pursuant to its arrangement with Excite, the Company is obligated to make 
minimum payments totaling $24 million, of which $1.5 million had been 
paid as of September 30, 1998, and to pay a percentage of commissions 
earned by the Company in excess of certain thresholds. Pursuant to its 
arrangement with Lycos, the Company is obligated to make minimum payments 
totaling $4.3 million, of which $1.1 million had been paid as of 
September 30, 1998 and to pay a percentage of commissions earned by the 
Company in excess of certain thresholds. In addition, the Company is 
required to develop content areas featured on AOL, Excite and Lycos 
sponsored primarily by advertising revenues, of which the Company is 
entitled to receive a share. However, there can be no assurance that the 
Company will receive significant revenues, if any, from such payments. 
See "Risk Factors-Reliance on Distribution Agreements with America 
Online, Excite and Lycos" and "-Risk of Termination of Distribution 
Agreement with AOL." 

The Company believes that its current cash, cash equivalents and 
marketable securities together with the net proceeds of the secondary 
offering completed in May 1998, will be sufficient to meet its 
anticipated cash needs for working capital and capital expenditures 
through the end of 1999.  However, the Company could be required, or 
could elect, to seek to raise additional financing during such period or 
thereafter, through the sale of equity or debt securities or by obtaining 
additional credit facilities. The sale of additional equity or 
convertible debt securities could result in additional dilution to the 
Company's stockholders. There can be no assurance that financing will be 
available in sufficient amounts or on terms acceptable to the Company, if 
at all. See "Risk Factors-Need for Additional Capital."


Year 2000

The Year 2000 issue relates to computer systems that have time and 
date-sensitive programs that were designed to read years beginning with 
"19," but may not properly recognize the Year 2000. If a computer system 
or software application used by the Company or a third party dealing with 
the Company fails because of the inability of the system or application 
to properly read the year "2000," the results could include, among other 
things, the inability to process transactions or conduct normal business 
activities and could  have a material adverse effect on the Company.

The Company's process towards Year 2000 readiness includes 
planning, assessment, testing and renovation. The Company is currently 
assessing its internal computer programs and systems to ensure that such 
programs and systems will be Year 2000 compliant. Based on its review to 
date, the Company has not uncovered any significant computer programs or 
systems which would not become year 2000 compliant in a timely manner. 
The Company continues to review its internal  systems for year 2000 
issues and expects to begin the testing phase in early 1999.  The 
estimated cost of these efforts are not expected to have a material 
adverse effect on the Company's business, operating results or financial 
condition. 

The Company has also initiated contact with key suppliers whose 
computer systems' functionality could impact the Company's ability to 
conduct business. The Company is dependent upon certain third party 
service providers including, without limitation, the Apollo GDS system, 
AOL, ANS Communications, Geonet Communications and Pegasus. Any 
interruption of such services due to such providers' failure to be Year 
2000 compliant would be disruptive to the Company's business and could 
have a material adverse effect on the Company's business, operating 
results and financial condition. In particular, the Company is 
substantially dependent on the Year 2000 compliance of the Apollo GDS 
system, the failure of which could, in the worst case, prevent the 
Company's customers from being able to reserve airline tickets, car 
rentals and other travel services, which would have a material adverse 
effect on the Company's business, operating results and financial 
condition.  In addition, the Company believes it could take up to one 
year and require substantial expenditures to fully transition the 
Company's travel services to an alternative GDS System. Similarly, the 
failure by Pegasus to be Year 2000 compliant could prevent the Company's 
customers from being able to reserve hotel rooms, which could have a 
material adverse effect on the Company's business, operating results and 
financial condition. Currently, the Company has not yet developed a 
contingency plan to address the risk of failure of such service providers 
to be Year 2000 compliant.

The foregoing assessment of the impact of the Year 2000 issue 
problem on the Company is based on management's best  estimates at the 
present time, and could change substantially.  The assessment is based 
upon numerous  assumptions as to future events.  There can be no 
guarantee that these estimates will prove accurate,  and actual results 
could differ from those estimated if these assumptions prove inaccurate.


Recently Issued Accounting Standards

In February 1997, Statement of Financial Accounting Standards 
("SFAS") No. 128, "Earnings Per Share," was issued and was effective 
for the Company's year ended December 31, 1997. As a result, the 
Company's earnings per share ("EPS") data for prior periods have been 
restated in the accompanying financial statements to conform with SFAS 
No. 128. In March 1997, SFAS No. 129, "Disclosure of Information About 
Capital Structure," was issued and is effective for the Company's year 
ending December 31, 1998. In June 1997, SFAS No. 130, "Reporting 
Comprehensive Income," was issued and was adopted by the Company 
effective January 1, 1998. The adoption of SFAS No. 130 will have no 
impact on the Company's consolidated results of operations, financial 
position or cash flows. In June 1997, the FASB issued SFAS No. 131, 
"Disclosures About Segments of an Enterprise." The Company is required 
to adopt this statement effective for 1998. The Company is considering 
additional disclosures, if any, which will be required by this 
pronouncement. 


Risk Factors

In addition to the other information in this Report, the following 
factors should be considered carefully in evaluating the Company's 
business and prospects:

Limited Operating History of Online Business; History of Net 
Operating Losses; Accumulated Deficit. The Company incurred net losses of 
$4.9 million, $5.6 million, $10.2 million and $14.4 million in 1995, 1996 
and 1997 and the nine months ended September 30, 1998, respectively. As 
of September 30, 1998, the Company had an accumulated deficit of 
approximately $40.2 million. The Company's television programming 
operations, which represented 56% and 35% of its total revenues in 1997 
and the nine months ended September 30, 1998, respectively, have incurred 
net operating losses in each of the last three years, and the Company 
anticipates that its television programming operations will incur a net 
operating loss for the fourth quarter of 1998. The Company initiated its 
online operations in 1994, first recognized revenues from its online 
operations in the first quarter of 1995 and booked its first airline 
ticket reservations online in the second quarter of 1996. Accordingly, 
the Company's prospects must be considered in light of the risks, 
expenses and difficulties frequently encountered by companies in an early 
stage of development, particularly companies engaged in new and rapidly 
evolving markets such as online commerce. There can be no assurance that 
the Company will be successful in addressing such risks, and the failure 
to do so could have a material adverse effect on the Company's business, 
operating results and financial condition. 

Anticipated Losses and Negative Cash Flow. The Company believes 
that its success will depend in large part on, among other things, its 
ability to generate sufficient sales volume to achieve profitability and 
effectively maintain existing relationships and develop new relationships 
with travel suppliers, strategic partners and advertising customers. 
Accordingly, the Company intends to expend significant financial and 
management resources on brand development, marketing and promotion, site 
and content development, strategic relationships and technology and 
operating infrastructure. As a result, the Company expects to incur 
additional losses and continued negative cash flow from operations for 
the foreseeable future, and such losses are anticipated to increase 
significantly from current levels. There can be no assurance that the 
Company's revenues will increase or even continue at their current level 
or that the Company will achieve or maintain profitability or generate 
cash from operations in future periods. In view of the rapidly evolving 
nature of the Company's business and its limited operating history in the 
online business, the Company believes that period-to-period comparisons 
of its operating results are not necessarily meaningful and should not be 
relied upon as an indication of future performance. 

Unpredictability of Future Revenues; Fluctuations in Quarterly 
Results.  As a result of the Company's limited operating history in 
online commerce and the emerging nature of the markets in which the 
Company competes, the Company is unable to accurately forecast its 
revenues. The Company's current and future expense levels are based 
predominantly on its operating plans and estimates of future revenues and 
are to a large extent fixed. The Company may be unable to adjust spending 
in a timely manner to compensate for any unexpected revenue shortfall. 
Accordingly, any significant shortfall in revenues would likely have an 
immediate material adverse effect on the Company's business, operating 
results and financial condition. Further, the Company currently intends 
to substantially increase its operating expenses to develop and offer new 
and expanded travel services, to fund increased sales and marketing, 
including obligations under its distribution agreements, and customer 
service operations, and to develop its technology and transaction-
processing systems. To the extent such expenses precede or are not 
subsequently followed by increased revenues, the Company's operating 
results will fluctuate and net anticipated losses in a given quarter may 
be greater than expected.

The Company expects that it will experience seasonality in its 
business, reflecting seasonal fluctuations in the travel industry, 
Internet and commercial online service usage and advertising 
expenditures. The Company anticipates that travel bookings will typically 
increase during the second quarter in anticipation of summer travel and 
will typically decline during the fourth quarter. Internet and commercial 
online service usage and the rate of growth of such usage may be expected 
typically to decline during the summer.  In addition, advertising sales 
in traditional media, such as broadcast and cable television, generally 
decline in the first and third quarters of each year. Depending on the 
extent to which the Internet and commercial online services are accepted 
as an advertising medium, seasonality in the level of advertising 
expenditures could become more pronounced for Internet-based advertising. 
Seasonality in the travel industry, Internet and commercial online 
service usage and advertising expenditures are likely to cause quarterly 
fluctuations in the Company's operating results and could have a material 
adverse effect on the Company's business, operating results and financial 
condition.

The Company expects to experience significant fluctuations in its 
future quarterly operating results due to a variety of other factors, 
many of which are outside the Company's control. Factors that may 
adversely affect the Company's quarterly operating results include, but 
are not limited to, (i) the Company's ability to retain existing 
customers, attract new customers at a steady rate and maintain customer 
satisfaction, (ii) changes in inventory availability from third party 
suppliers or commission rates paid by travel suppliers, such as the 
reduction in commissions paid by major airlines for online bookings 
implemented during 1997 and the first half of 1998, (iii) the 
announcement or introduction of new or enhanced sites, services and 
products by the Company or its competitors, (iv) general economic 
conditions and economic conditions specific to the Internet, online 
commerce or the travel industry, (v) the level of use of online services 
and consumer acceptance of the Internet and commercial online services 
for the purchase of consumer products and services such as those offered 
by the Company, (vi) the Company's ability to upgrade and develop its 
systems and infrastructure and to attract new personnel in a timely and 
effective manner, (vii) the level of traffic on the Company's online 
sites, (viii) technical difficulties, system downtime or Internet 
brownouts, (ix) the amount and timing of operating costs and capital 
expenditures relating to expansion of the Company's business, operations 
and infrastructure, (x) governmental regulation and (xi) unforeseen 
events affecting the travel industry.

Gross margins may be impacted by a number of different factors, 
including the mix of television revenues versus online revenues, the mix 
of online commission revenues versus online advertising revenues, the mix 
of travel services sold, the mix of revenues from AOL, Excite, Lycos and 
the Company's Web site, the mix of airline ticket commissions (which vary 
from airline to airline) and the amount of override commissions. The 
Company typically realizes higher gross margins on advertising revenues 
than commission revenues, higher commissions on vacation packages than 
hotel rooms and car rentals, higher commissions on hotel rooms and car 
rentals than airline tickets, higher gross margins on advertising 
revenues from the Company's own Web site than through AOL, Excite or 
Lycos, higher commissions from certain airlines than others and higher 
gross margins in periods of higher overrides.  Any change in one or more 
of the foregoing factors could materially adversely affect the Company's 
gross margins and operating results in future periods.

As a result of the foregoing factors, the Company's annual or 
quarterly operating results may be below the expectations of public 
market analysts and investors. In such event, the price of the Company's 
Common Stock would likely be materially and adversely affected. 

Dependence on the Travel Industry. The Company derives a 
significant portion of its revenues directly or indirectly from the 
travel industry, and the Company's future growth is dependent on the 
travel industry. The travel industry, especially leisure travel, which is 
dependent on personal discretionary spending levels, is sensitive to 
changes in economic conditions and tends to decline during general 
economic downturns and recessions. The travel industry is also highly 
susceptible to unforeseen events, such as political instability, regional 
hostilities, fuel price escalation, travel-related accidents, unusual 
weather patterns or other adverse occurrences. Any event that results in 
decreased travel generally would likely have a material adverse effect on 
the Company's business, operating results and financial condition. 

Uncertain Acceptance of the Preview Travel Brand; Dependence on 
Increased Bookings. The Company believes that establishing, maintaining 
and enhancing the Preview Travel brand is a critical aspect of its 
efforts to attract and expand its online traffic. The number of Internet 
sites that offer competing services, many of which already have well-
established brands in online services or the travel industry generally, 
increase the importance of establishing and maintaining brand name 
recognition. Promotion of the Preview Travel brand will depend largely on 
the Company's success in providing a high-quality online experience 
supported by a high level of customer service, which cannot be assured. 
In addition, to attract and retain online users, and to promote and 
maintain the Preview Travel brand in response to competitive pressures, 
the Company may find it necessary to increase substantially its financial 
commitment to creating and maintaining a strong brand loyalty among 
customers. If the Company is unable to provide high-quality online 
services or customer support, or otherwise fails to promote and maintain 
its brand, or if the Company incurs excessive expenses in an attempt to 
promote and maintain its brand, the Company's business, operating results 
and financial condition would be materially adversely affected.

The Company's future success, and in particular its revenues and 
operating results, depends upon its ability to successfully execute 
several key aspects of its business plan. The Company must increase the 
dollar volume of transactions booked through its online sites, either by 
generating significantly higher and continuously increasing levels of 
traffic to its online sites or by increasing the percentage of visitors 
to its online sites who purchase travel services, or through some 
combination thereof. The Company must also increase the number of repeat 
purchasers of travel services through its online sites. In addition, the 
Company must deliver a high level of customer service and compelling 
content in order to attract users with demographic characteristics 
valuable to advertisers. Although the Company has implemented strategies 
designed to accomplish these objectives, including its relationships with 
AOL, Excite, Lycos and other strategic partners, and advertising the 
Company's services in online and traditional media, there can be no 
assurance that these strategies will be effective in increasing the 
dollar volume of transactions booked through its online sites, increasing 
traffic to its online sites, increasing the percentage of visitors who 
purchase travel services, increasing the number of repeat purchasers or 
increasing its advertising revenues. The failure to do one or more of the 
foregoing would likely have a material adverse effect on the Company's 
business, operating results and financial condition. 

Reliance on Distribution Agreements with America Online, Excite and 
Lycos. The Company has entered into agreements with AOL, Excite and Lycos 
establishing the Company as the primary and preferred provider of travel 
services on AOL, the exclusive provider of travel reservations services 
on Excite's Travel Channel (City.Net) until September 2002 and the 
exclusive multiservice provider of travel reservations on Lycos' Travel 
Web Guide and Travel Network until March 2001. Under these agreements, 
AOL, Excite and Lycos are obligated to promote the Company and to deliver 
minimum numbers of annual page views or impressions to the online areas 
featuring the Company's travel services. In addition, the Company is 
eligible to receive payments from Excite and Lycos representing a share 
of advertising revenues received by Excite and Lycos in connection with 
the online areas featuring the Company's travel services; however, there 
can be no assurance that such payments, if any, will be significant. 
During the terms of these agreements, the Company is obligated to make 
minimum payments totaling $60.3 million to AOL, Excite and Lycos as well 
as pay to AOL, Excite and Lycos a percentage of certain commissions 
earned by the Company in excess of specified thresholds. The Company is 
also obligated to share certain advertising revenues with each of AOL, 
Excite and Lycos, as specified in their respective agreements. Moreover, 
the Company's agreement with AOL is conditioned upon the Company 
achieving specified levels of travel services bookings, which will 
require the Company to significantly increase such bookings from current 
levels. There can be no assurance that the Company will achieve 
sufficient online traffic, travel bookings or commissions to realize 
economies of scale that justify the Company's significant fixed financial 
obligations to AOL, Excite and Lycos or that the Company will satisfy the 
minimum levels of travel services bookings required to maintain the AOL 
agreement, and failure to do so would likely have a material adverse 
effect on the Company's business, operating results and financial 
condition. In addition, the agreements with AOL, Excite and Lycos do not 
provide the Company with renewal rights upon expiration of their 
respective terms. The AOL agreement provides AOL with the right to renew 
the AOL agreement for successive one-year terms on a non-exclusive basis 
during which period AOL would continue to receive a percentage of 
commissions and share in advertising revenues, but the Company would not 
be obligated to make any additional minimum payments. There can be no 
assurance that such agreements will be renewed on commercially acceptable 
terms, or at all.

In addition, the Company is a party to a database services 
agreement with AOL to develop and manage a travel-related destinations 
database for AOL with content that is reasonably satisfactory to AOL. The 
Company has committed to an aggressive schedule to develop and maintain 
the destinations database which will require significant efforts and 
resources on the Company's part. There can be no assurance that the 
Company will be able to fulfill its commitments to AOL on the agreed upon 
schedule, and failure to do so could result in a breach of the 
distribution agreement with AOL, as well as the database services 
agreement, which would likely have a material adverse effect on the 
Company's business, operating results and financial condition.

Furthermore, the Company's significant investment in the AOL, 
Excite and Lycos relationships is based on the continued positive market 
presence, reputation and anticipated growth of AOL, Excite and Lycos, as 
well as the commitment by each of AOL, Excite and Lycos to deliver 
specified numbers of annual page views or impressions. Any decline in the 
significant market presence, business or reputation of AOL, Excite or 
Lycos, or the failure of AOL, Excite or Lycos to deliver the specified 
numbers of annual page views, will reduce the value of these strategic 
agreements to the Company and will likely have a material adverse effect 
on the business, operating results and financial condition of the 
Company. In addition, while the Company and both Lycos and Excite have 
agreed to cooperate on advertising, AOL and the Company have the right to 
separately pursue and sell advertising in the Company's content areas 
distributed through AOL. There can be no assurance that the Company and 
AOL will not compete for limited travel supplier advertising revenues. 
Travel services sold through the AOL Network (including the primary AOL 
service and AOL.COM) accounted for 62%, 52%, 38% and 35% of the Company's 
gross bookings for the three months ended December 31, 1997, March 31, 
1998, June 30, 1998 and September 30, 1998, respectively. Travel services 
sold through Excite accounted for 15%, 16%, 18% and 15% of the Company's 
gross bookings for the three months ended December 31, 1997, March 31, 
1998, June 30, 1998 and September 30, 1998, respectively. The Company's 
arrangements with AOL and Excite are expected to continue to represent 
significant distribution channels for the Company's travel services, and 
the Lycos arrangement is expected to represent a significant distribution 
channel in the future. Any termination of any or all of the Company's 
agreements with AOL, Excite and Lycos would likely have a material 
adverse effect on the Company's business, operating results and financial 
condition.  

Except for its arrangements with AOL, Excite and Lycos, the Company 
has no other significant long-term distribution arrangements with any 
other service provider on the Internet or commercial online services and 
accordingly must rely on search engines, directories and other 
navigational tools which significantly affect traffic to the Company's 
online sites. There can be no assurance that such cooperation will be 
available to the Company on acceptable commercial terms or at all or that 
such relationships will not already be established with the Company's 
competitors. If the Company is unable to maintain satisfactory 
relationships with AOL, Excite or Lycos, or if the Company is unable to 
develop and maintain satisfactory relationships with additional third 
parties on acceptable commercial terms, or if the Company's competitors 
are better able to leverage such relationships, the Company's business, 
operating results and financial condition could be materially adversely 
affected. 

Risk of Termination of Distribution Agreement with America Online. 
The Company's future success depends in part upon its ability to maintain 
its distribution agreement with AOL. The Company's distribution agreement 
with AOL may be terminated by AOL in the event that the Company fails to 
make certain minimum payments to AOL, fails to achieve specified levels 
of travel services bookings or breaches its database services agreement 
with AOL pursuant to which the Company is required to develop and manage 
a travel-related destinations database for AOL. In particular, the 
Company must achieve specified annual levels of travel services bookings, 
for which the Company was in compliance with the first annual measurement 
date occurring in September 1998.  There can be no assurance that the 
Company will be able to meet its significant financial obligations to 
AOL, achieve the specified minimum levels of travel services bookings, or 
deliver satisfactory content to the database.  Failure to do any of the 
foregoing could result in the termination by AOL of the Company's 
distribution agreement with AOL, which would likely have a material 
adverse effect on the Company's business, operating results and financial 
condition.

Reliance on Travel Suppliers; Potential Adverse Changes in 
Commission Payments. The Company is dependent on airlines, hotels and 
other providers of travel services ("travel suppliers") in order to 
offer its customers comprehensive access to travel services and products. 
Consistent with industry practices, the Company currently has no 
agreements with its travel suppliers that obligate such suppliers to sell 
services or products through the Company.  In addition, travel suppliers 
may be unable or choose not to make their inventory of services and 
products available through online distribution, including those services 
offered by the Company. Accordingly, travel suppliers could elect to sell 
exclusively through other sales and distribution channels or to restrict 
the Company's access to their inventory, which could significantly 
decrease the amount or breadth of the Company's inventory of available 
travel offerings and could have a material adverse effect on the 
Company's business, operating results and financial condition.

In addition, a substantial majority of the Company's online revenue 
is dependent on the commissions customarily paid by travel suppliers for 
bookings made through the Company's online travel service. Consistent 
with industry practices, these travel suppliers are not obligated to pay 
any specified commission rate for bookings made through the Company or to 
pay commissions at all. For example, during the first quarter of 1998, a 
major hotel chain eliminated commissions paid to the Company and other 
online travel service providers for online bookings. There can be no 
assurance that other hotel chains or other travel suppliers will not 
reduce current industry commission rates or eliminate such commissions 
entirely, which could, individually or in the aggregate, have a material 
adverse effect on the Company's business, operating results and financial 
condition.  For example, in 1995, most of the major airlines placed a cap 
on per-ticket commissions payable to all travel agencies for domestic 
airline travel. In September 1997, the major U.S. airlines reduced the 
commission rate payable to traditional travel agencies from 10% to 8%.

In 1997, the major U.S. airlines reduced the commission rate 
payable for online reservations from approximately 8% to approximately 
5%, which had a material adverse effect on the Company's results of 
operations in 1997 and the nine months ended September 30, 1998. In 
addition, in the first half of 1998 one major airline reduced its fixed 
rate commission structure for online roundtrip ticket sales to ten 
dollars and a second major airline further reduced its cap (the maximum 
amount of commissions paid per ticket) on per-roundtrip ticket 
commissions payable for online ticket sales to ten dollars. These 
reductions were followed by similar reductions made by other smaller 
airlines.  The Company expects that its weighted average commission on 
online transaction revenue will decline as a result of these reductions. 
There can be no assurance that airlines or other of the Company's travel 
suppliers will not further reduce the amount of compensation payable to 
the Company and other online service providers.  

In addition, certain travel suppliers have initiated direct online 
distribution channels and, in some cases, have offered negotiated rates 
directly to major corporate customers. Further, the Company's travel 
service offerings are limited to those travel suppliers whose services 
and products are available through the global distribution services 
("GDS") systems accessed by the Company, namely, the Apollo GDS system 
("Apollo") operated by Galileo International Partnership ("Galileo") 
for airlines and car rentals and the GDS system operated by Pegasus 
Systems, Inc. ("Pegasus") for hotel reservations. For example, Southwest 
Airlines is currently unavailable in the Apollo GDS system, and, 
therefore, the Company is unable to offer access to Southwest Airline's 
inventory. There can be no assurance that the Company's current travel 
suppliers will continue to sell services or products through Apollo or 
Pegasus on current terms with adequate compensation to the Company, or at 
all, or that the Company will be able to establish new or extend current 
travel supplier relationships to ensure uninterrupted access to a 
comprehensive supply of the travel services. The Company's failure to do 
so would likely result in a material adverse effect on its business, 
operating results and financial condition.

Reliance on Third Party Systems. The Company is dependent upon 
certain third party service providers, including, without limitation, the 
following: AOL and WorldCom, Inc.'s ANS Communications subsidiary (which 
was acquired by WorldCom, Inc. from AOL in February 1998), which provides 
AOL customers with access to the Company's online services; GeoNet 
Communications, which provides the Company with a T3 data communication 
line for Internet access; Pegasus, which provides the Company with access 
to a global hotel reservation system and which operates an online travel 
service competitive with the Company; Galileo, which provides the Company 
with access to the Apollo GDS system; and AT&T, which provides the 
Company with data connectivity to the Apollo GDS System.  

The Company is dependent on these third party providers to continue 
to offer and maintain these services. Any discontinuation of such 
services, or any reduction in performance that requires the Company to 
replace such services, would be disruptive to the Company's business. In 
particular, if the Company were required to replace services provided by 
the Apollo GDS system, the Company believes it could take up to one year 
and require substantial expenditures to fully transition the Company's 
travel services to an alternative service provider. In the past, these 
third party providers have experienced interruptions or failures in their 
systems or services, which have temporarily prevented the Company's 
customers from accessing or purchasing certain travel services through 
the Company's online sites. Any reduction in performance, disruption in 
Internet or online access or discontinuation of services provided by AOL, 
ANS Communications, GeoNet Communications or any other Internet service 
provider, or any disruption in the Company's ability to access the Apollo 
GDS system, Pegasus or any other travel reservation systems, could have a 
material adverse effect on the Company's business, operating results and 
financial condition. 

In addition, the Company is dependent on Apollo and Pegasus to 
ensure that all software used in connection with their GDS systems will 
manage and manipulate data involving the transition of dates from 1999 to 
2000 without functional or data abnormality and without inaccurate 
results related to such dates. Any failure by Galileo or Pegasus to 
ensure that such software complies with year 2000 requirements could have 
a material adverse effect on the Company's business, operating results 
and financial condition. The Company's agreements with its third party 
service providers have terms of, or expire within, one year or less and 
in some cases are subject to cancellation for any reason or no reason 
upon short notice.  Specifically, the Company does not have a written 
agreement with Pegasus, and its agreement with ANS Communications is 
currently on a month-to-month basis. Any cancellation of services, or 
failure to renew such services upon expiration, by any of such third 
party providers without notice sufficient to allow the Company to 
transition to a new service provider in a timely and cost-effective 
manner would have a material adverse effect on the Company's business, 
operating results and financial condition. See "-Year 2000 Compliance." 

Competition. The online travel services market is new, rapidly 
evolving and intensely competitive, and the Company expects such 
competition to intensify in the future. The Company competes primarily 
with traditional travel agency and online travel reservation services. In 
the online travel services market, the Company competes with other 
entities that maintain similar commercial Web sites, such as Expedia 
(operated by Microsoft Corporation), Travelocity (operated by SABREGroup 
Holdings Inc., a majority-owned subsidiary of American Airlines), Cendant 
Corporation, TravelWeb (operated by Pegasus), Internet Travel Network, 
Biztravel.com, and TheTrip.com, among others. Several traditional travel 
agencies, including larger travel agencies such as American Express 
Travel Related Services Co. Inc., Uniglobe Travel and Carlson Wagonlit 
Travel, have established, or may establish in the future, commercial Web 
sites offering online travel services. Additionally, Priceline.com LLC 
operates a Web site that allows users to bid on air tickets.

In addition to the traditional travel agency channel, most travel 
suppliers also sell their services directly to customers, predominantly 
by telephone. As the market for online travel services grows, the Company 
believes that the range of companies involved in the online travel 
services industry, including travel suppliers, traditional travel 
agencies and travel industry information providers, will increase their 
efforts to develop services that compete with the Company's services. 
Most major airlines, car rental companies and hotel chains offer travel 
services directly through their own Web sites, including travel services 
from other travel suppliers, eliminating the need to pay commissions to 
third parties such as the Company. The Company is unable to anticipate 
which other companies are likely to offer competitive services in the 
future.  There can be no assurance that the Company's online operations 
will compete successfully with any current or future competitors.

In the television and in-flight programming markets, the Company's 
News Travel Network division competes for airtime for its programs with 
news and entertainment programming produced by local stations, broadcast 
and cable networks, infomercial producers and third party syndicators. 
NTN competes for national advertising sales with networks, national 
advertising firms and syndicators.

Many of the Company's current and potential competitors have longer 
operating histories, larger customer bases, greater brand recognition and 
significantly greater financial, marketing and other resources than the 
Company and may enter into strategic or commercial relationships with 
larger, more established and well-financed companies. Certain of the 
Company's competitors may be able to secure services and products from 
travel suppliers on more favorable terms, devote greater resources to 
marketing and promotional campaigns and devote substantially more 
resources to Web site and systems development than the Company. In 
addition, new technologies and the expansion of existing technologies may 
increase competitive pressures on the Company. In particular, Microsoft 
Corporation has publicly announced its intent to invest heavily in the 
area of travel technology and services. Increased competition may result 
in reduced operating margins, as well as loss of market share and brand 
recognition. There can be no assurance that the Company will be able to 
compete successfully against current and future competitors, and 
competitive pressures faced by the Company could have a material adverse 
effect on the Company's business, operating results and financial 
condition. 

Dependence on Continued Growth of Online Commerce. The Company's 
future revenues and any future profits are substantially dependent upon 
the widespread acceptance and use of the Internet and commercial online 
services as an effective medium of commerce by consumers. For the Company 
to be successful, these consumers must accept and utilize novel ways of 
conducting business and exchanging information. Convincing consumers to 
purchase travel services online may be particularly difficult, as such 
consumers have traditionally relied on travel agents for advice and 
recommendations as to destinations and accommodations as well as 
bookings, and are accustomed to a high degree of human interaction in 
purchasing travel services. Rapid growth in the use of and interest in 
the Web, the Internet and commercial online services is a recent 
phenomenon, and there can be no assurance that acceptance and use will 
continue to develop or that a sufficiently broad base of consumers will 
adopt, and continue to use, the Internet and commercial online services 
as a medium of commerce, particularly for purchases of travel services.

Demand for recently introduced services and products over the 
Internet and commercial online services is subject to a high level of 
uncertainty and there exist few proven services and products. The 
development of the Internet and commercial online services as a viable 
commercial marketplace is subject to a number of factors, including 
continued growth in the number of users of such services, concerns about 
transaction security, continued development of the necessary 
technological infrastructure and the development of complementary 
services and products. If the Internet and commercial online services do 
not become a viable commercial marketplace, the Company's business, 
operating results and financial condition would be materially adversely 
affected.

Risks Associated with Advertising Revenues. During 1996 and 1997 
and the nine months ended September 30, 1998, approximately 58%, 39% and 
36%, respectively, of the Company's total revenues were derived from the 
sale of advertising in connection with its television programming and its 
online sites. The Company's advertising customers may terminate their 
advertising commitments at any time without penalty. Consequently, the 
Company's advertising customers may move their advertising to competing 
online sites or television programs or to other traditional media quickly 
and at low cost, thereby increasing the Company's exposure to competitive 
pressures and fluctuations in net revenues and operating results. In 
particular, to support its television operations, which are substantially 
dependent on advertising revenues that historically have been derived 
from a very limited customer base, the Company must overcome significant 
competition from national syndicators and broadcast stations and cable 
networks to obtain advertising commitments. If the Company loses 
advertising customers, fails to attract new customers or is forced to 
reduce advertising rates in order to retain or attract advertising 
customers, the Company's business, operating results and financial 
condition could be materially adversely affected. In particular, the 
Company currently anticipates that Best Buy Co., Inc. ("Best Buy") will 
account for a significant percentage of the Company's television 
advertising revenues in future periods. As is common in the television 
industry, the Company does not have a long-term contract or arrangement 
with Best Buy that guarantees advertising revenues from Best Buy. As a 
result, if advertising revenues from Best Buy do not materialize to the 
extent anticipated by the Company or if such advertising revenues 
materialize and Best Buy then phases out its sponsorship of the Company's 
television programming, overall revenues from the Company's television 
operations would be materially and adversely affected, which could 
adversely affect the Company's business operating results and financial 
condition. 

Management of Potential Growth. The Company has rapidly and 
significantly expanded its operations, and anticipates that further 
significant expansion will be required to address potential growth in its 
customer base and market opportunities. The Company has also recently 
added a number of key managerial and technical employees, and the Company 
expects to add additional key personnel in the future. This expansion has 
placed, and is expected to continue to place, a significant strain on the 
Company's management, operational and financial resources. To manage the 
expected growth of its operations and personnel, the Company will be 
required to improve existing and implement new transaction-processing, 
operational, customer service and financial systems, procedures and 
controls, implement a formal disaster recovery program and expand, train 
and manage the Company's growing employee base. The Company also will be 
required to expand its finance, administrative and operations staff. 
Further, the Company's management will be required to maintain and expand 
its relationships with various travel service suppliers, other Web sites 
and other Web service providers, Internet and commercial online service 
providers and other third parties necessary to the Company's business. 
There can be no assurance that the Company's current and planned 
personnel, systems, procedures and controls will be adequate to support 
the Company's future operations, that management will be able to hire, 
train, retain, motivate and manage required personnel or that the 
Company's management will be able to successfully identify, manage and 
exploit existing and potential market opportunities. If the Company is 
unable to manage growth effectively, its business, operating results and 
financial condition could be materially adversely affected. 

Dependence on Attraction and Retention of Key Employees. The 
Company's performance is substantially dependent on the continued 
services and on the performance of its senior management and certain 
other key personnel. The loss of the services of any of its executive 
officers or other key employees could have a material adverse effect on 
the Company's business, operating results and financial condition. The 
Company does not have long-term employment agreements with any of its key 
personnel. The Company's future success also depends on its ability to 
identify, attract, hire, train, retain and motivate other highly skilled 
technical, managerial, editorial, marketing and customer service 
personnel. Competition for such personnel is intense, and there can be no 
assurance that the Company will be able to successfully attract, 
assimilate or retain sufficiently qualified personnel. In particular, the 
Company may encounter difficulties in attracting a sufficient number of 
qualified software developers for its online services and transaction-
processing systems, and there can be no assurance that the Company will 
be able to retain and attract such developers. The failure to retain and 
attract necessary technical, managerial, editorial, merchandising, 
marketing and customer service personnel could have a material adverse 
effect on the Company's business, operating results and financial 
condition.

Although none of the Company's employees is represented by a labor 
union, it is common for employees in the television industry to belong to 
a union, and there can be no assurance that the Company's employees will 
not join or form a labor union or that the Company, for certain purposes, 
will not be required to become a union signatory. 

Risk of Capacity Constraints; Reliance on Internally Developed 
Systems; System Development Risks. The Company's revenues depend on the 
number of customers who use its online travel sites to book their travel 
reservations.  Accordingly, the satisfactory performance, reliability and 
availability of the Company's online sites, transaction-processing 
systems and network infrastructure are critical to the Company's 
operating results, as well as its ability to attract and retain customers 
and maintain adequate customer service levels. Any system interruptions 
that result in the unavailability of the Company's online sites or 
reduced performance of the reservation system would reduce the volume of 
reservations and the attractiveness of the Company's service offerings, 
which could have a material adverse effect on the Company's business, 
operating results and financial condition.

The Company uses an internally developed system for its online 
sites and substantially all aspects of transaction processing, including 
customer profiling, making reservations, credit card verification and 
confirmations.  The Company has experienced periodic system 
interruptions, which it believes will continue to occur from time to 
time. Any substantial increase in the volume of traffic on the Company's 
online sites or the number of reservations made by customers will require 
the Company to expand and upgrade further its technology, transaction-
processing systems and network infrastructure. The Company has 
experienced and expects to continue to experience temporary capacity 
constraints due to sharply increased traffic during "fare wars" or other 
promotions, which may cause unanticipated system disruptions, slower 
response times, degradation in levels of customer service, impaired 
quality and speed of reservations and confirmations and delays in 
reporting accurate financial information.

There can be no assurance that the Company's transaction-processing 
systems and network infrastructure will be able to accommodate such 
increases in traffic in the future, or that the Company will, in general, 
be able to accurately project the rate or timing of such increases or 
upgrade its systems and infrastructure to accommodate future traffic 
levels on its online sites.  In addition, there can be no assurance that 
the Company will be able in a timely manner to effectively upgrade and 
expand its transaction-processing systems or to successfully integrate 
any newly developed or purchased modules with its existing systems. Any 
inability to do so could have a material adverse effect on the Company's 
business, operating results and financial condition. 

Risk of System Failure; Single Site. The Company's success, in 
particular its ability to successfully receive and fulfill orders online 
and provide high-quality customer service, largely depends on the 
efficient and uninterrupted operation of its computer and communications 
hardware systems.  Substantially all of the Company's computer and 
communications systems are located at a single facility in San Francisco, 
California. The Company's systems and operations are vulnerable to damage 
or interruption from fire, flood, power loss, telecommunications failure, 
break-ins, earthquake and similar events. The Company currently does not 
have redundant systems or a formal disaster recovery plan. Despite the 
implementation of network security measures by the Company, its servers 
are vulnerable to computer viruses, physical or electronic break-ins and 
similar disruptions, which could lead to interruptions, delays, loss of 
data or the inability to accept and confirm customer reservations. The 
occurrence of any of the foregoing risks could have a material adverse 
effect on the Company's business, operating results and financial 
condition. 

Risks Associated with Television Operations. The Company's ability 
to generate revenues from its television operations, as well as its 
ability to use its television and in-flight programming to promote and 
enhance its online services and brand recognition, depends upon its 
ability to reflect in its programming the changing tastes of consumers, 
news directors and program directors, and to secure and maintain 
distribution for its television and in-flight programming on acceptable 
commercial terms through local stations, domestic and international cable 
and broadcast networks and airlines. These syndication agreements 
typically have durations of one year or less, and there can be no 
assurance that such stations, networks and airlines will continue to 
renew syndication agreements for the Company's programs. In addition, the 
Company's ability to cost effectively update and expand its film library 
is essential to its ability to continue to offer compelling content.

Although the Company maintains a back-up of its film library in 
offsite storage, both the film library and the back-up library are 
vulnerable to damage from fire, flood, break-ins, earthquake and similar 
events. Loss of access to the Company's film library for an extended 
period of time could have a material adverse effect on the Company's 
business, operating results and financial condition.

Although the Company's television operations have had positive cash 
flow from operations in the past, the Company experienced negative cash 
flow from television operations in 1997 and in the first nine months of 
1998 and expects to experience negative cash flow from television 
operations at least through the completion of the Television Operations 
Divestiture. The Company must generate substantial revenues from sales of 
its television programs, and, in particular, advertising sales for such 
programs, in order to offset the significant fixed costs associated with 
its television operations. The Company historically has derived 
advertising revenues from a limited customer base. In particular, a 
single customer, MCI Telecommunications Corporation ("MCI"), accounted 
for 49% and 58% of the Company's television advertising revenues in 1995 
and 1996, respectively. Commencing in the first quarter of 1997, MCI 
began to phase out its sponsorship of the Company's television 
programming, which phase-out was completed in the quarter ended September 
30, 1997. MCI continues to advertise in the Company's in-flight 
programming. Revenues attributable to MCI comprised 30% and 7% of the 
Company's total television revenues for 1997 and the nine months ended 
September 30, 1998, respectively.  Because the Company does not expect to 
receive any additional revenues from MCI for television sponsorships, the 
Company expects revenues attributable to MCI in 1998 to decrease 
significantly from that in 1997. In addition, the Company faces 
significant competition from national syndicators and broadcast and cable 
networks in its efforts to replace MCI's sponsorship, expand its customer 
base and obtain sufficient levels of advertising sales to achieve 
profitability in its television operations. In certain market conditions, 
the Company could be required to substantially lower its advertising 
rates in order to sell its available inventory of television time and Web 
advertising space. The Company currently anticipates that Best Buy Co., 
Inc. ("Best Buy") will account for a significant percentage of the 
Company's television advertising revenues in future periods. Revenues 
attributable to Best Buy, which began advertising with the Company in 
March 1998, comprised 23% of the Company's total television revenues for 
the nine months ended September 30, 1998. As is common in the television 
industry, the Company does not have a long-term contract or arrangement 
with Best Buy that guarantees advertising revenues from Best Buy.

As a result, if advertising revenues from Best Buy do not 
materialize to the extent anticipated by the Company or if such 
advertising revenues materialize and Best Buy then phases out its 
sponsorship of the Company's television programming, overall revenues 
from the Company's television operations would be materially and 
adversely affected, which could adversely affect the Company's business, 
operating results and financial condition. The Company expects revenues 
from its television operations to decline in 1998 relative to 1997.  
There can be no assurance that the Company will generate sufficient 
revenues from the licensing of its television programs and sale of 
advertising to achieve profitability, and the failure to do so or to 
complete the Television Operations Divestiture could have a material 
adverse effect on the Company's business, operating results and financial 
condition. 

Rapid Technological Change. The Internet and the online commerce 
industry are characterized by rapid technological change, changes in user 
and customer requirements and preferences, frequent new product and 
service introductions embodying new technologies and the emergence of new 
industry standards and practices that could render the Company's existing 
online sites and proprietary technology and systems obsolete. The 
emerging nature of these products and services and their rapid evolution 
will require that the Company continually improve the performance, 
features and reliability of its online services, particularly in response 
to competitive offerings. The Company's success will depend, in part, on 
its ability to enhance its existing services, to develop new services and 
technology that address the increasingly sophisticated and varied needs 
of its prospective customers and to respond to technological advances and 
emerging industry standards and practices on a cost-effective and timely 
basis. The development of online sites and other proprietary technology 
entails significant technical and business risks and requires substantial 
expenditures and lead time. There can be no assurance that the Company 
will successfully use new technologies effectively or adapt its online 
sites, proprietary technology and transaction-processing systems to 
customer requirements or emerging industry standards. If the Company is 
unable, for technical, legal, financial or other reasons, to adapt in a 
timely manner in response to changing market conditions or customer 
requirements, its business, operating results and financial condition 
could be materially adversely affected. 

Online Commerce and Database Security Risks. A fundamental 
requirement for online commerce and communications is the secure 
transmission of confidential information over public networks. The 
Company relies on encryption and authentication technology licensed from 
third parties to provide the security and authentication necessary to 
effect secure transmission of confidential information, such as customer 
credit card numbers. In addition, the Company maintains an extensive 
confidential database of customer profiles and transaction information. 
There can be no assurance that advances in computer capabilities, new 
discoveries in the field of cryptography, or other events or developments 
will not result in a compromise or breach of the algorithms used by the 
Company to protect customer transaction and personal data contained in 
the Company's customer database. If any such compromise of the Company's 
security were to occur, it could have a material adverse effect on the 
Company's reputation, business, operating results and financial 
condition. A party who is able to circumvent the Company's security 
measures could misappropriate proprietary information or cause 
interruptions in the Company's operations. The Company may be required to 
expend significant capital and other resources to protect against such 
security breaches or to alleviate problems caused by such breaches. 
Concerns over the security of transactions conducted on the Internet and 
commercial online services and the privacy of users may also inhibit the 
growth of the Internet and commercial online services, especially as a 
means of conducting commercial transactions. To the extent that 
activities of the Company or third-party contractors involve the storage 
and transmission of proprietary information, such as credit card numbers 
or other personal information, security breaches could expose the Company 
to a risk of loss or litigation and possible liability. There can be no 
assurance that the Company's security measures will prevent security 
breaches or that failure to prevent such security breaches will not have 
a material adverse effect on the Company's business, operating results 
and financial condition. 

Need for Additional Capital. The Company requires substantial 
working capital to fund its business and expects to use a portion of the 
net proceeds of its initial public offering and secondary offering to 
fund its operating losses. In the last two years, the Company has 
experienced negative cash flow from operations and expects to continue to 
experience significant negative cash flow from operations for the 
foreseeable future. The Company currently anticipates that the net 
proceeds of its initial public offering and secondary offering, together 
with its existing capital resources, will be sufficient to meet the 
Company's capital requirements through the end of 1999, although the 
Company could be required, or could elect, to seek to raise additional 
financing during such period or thereafter, in part to fund its financial 
obligations to AOL, Excite and Lycos, or for other purposes. There can be 
no assurance that such financing will be available in sufficient amounts 
or on terms acceptable to the Company, if at all. 

Risks Associated with Offering New Services. The Company plans to 
introduce new and expanded services and to enter into new relationships 
with third parties in order to generate additional revenues, attract more 
consumers and respond to competition. For example, the Company may offer 
travel insurance, travel financing services and travel-related 
merchandise. There can be no assurance that the Company would be able to 
offer such services in a cost-effective or timely manner or that any such 
efforts would be successful.  Furthermore, any new service launched by 
the Company that is not favorably received by consumers could damage the 
Company's reputation or its brand name. Expansion of the Company's 
services in this manner would also require significant additional 
expenses and development and may strain the Company's management, 
financial and operational resources. The Company's inability to generate 
revenues from such expanded services or products sufficient to offset 
their cost could have a material adverse effect on the Company's 
business, operating results and financial condition.

Liability for Internet and Television Content. As a publisher and 
distributor of online and television content, the Company faces potential 
liability for defamation, negligence, copyright, patent or trademark 
infringement and other claims based on the nature and content of the 
materials that the Company publishes or distributes. Such claims have 
been brought, and sometimes successfully pressed, against online 
services. In addition, the Company does not and cannot practically screen 
all of the content generated by its users on the bulletin board system on 
the Company's online sites, and the Company could be exposed to liability 
with respect to such content. Although the Company carries general 
liability insurance, the Company's insurance may not cover claims of 
these types or may not be adequate to indemnify the Company for all 
liability that may be imposed. Any imposition of liability, particularly 
liability that is not covered by insurance or is in excess of insurance 
coverage, could have a material adverse effect on the Company's 
reputation and its business, operating results and financial condition.

Uncertain Protection of Intellectual Property; Risks of Third Party 
Licenses. The Company regards its copyrights, service marks, trademarks, 
trade dress, trade secrets and similar intellectual property as critical 
to its success, and relies on trademark and copyright law, trade secret 
protection and confidentiality and/or license agreements with the 
Company's employees, customers, partners and others to protect its 
proprietary rights. The Company pursues the registration of certain of 
its key trademarks and service marks in the United States and 
internationally. Effective trademark, service mark, copyright and trade 
secret protection may not be available in every country in which the 
Company's products and services are made available online. The Company 
has licensed in the past, and expects that it may license in the future, 
certain of its proprietary rights, such as trademarks or copyrighted 
material, to third parties. While the Company attempts to ensure that the 
quality of its brand is maintained by such licensees, there can be no 
assurance that such licensees will not take actions that might materially 
adversely affect the value of the Company's proprietary rights or 
reputation, which could have a material adverse effect on the Company's 
business, operating results and financial condition. There can be no 
assurance that the steps taken by the Company to protect its proprietary 
rights will be adequate or that third parties will not infringe or 
misappropriate the Company's copyrights, trademarks, trade dress and 
similar proprietary rights. In addition, there can be no assurance that 
other parties will not assert infringement claims against the Company. 
The Company may be subject to legal proceedings and claims from time to 
time in the ordinary course of its business, including claims of alleged 
infringement of the trademarks and other intellectual property rights of 
third parties by the Company and its licensees. Such claims, even if not 
meritorious, could result in the expenditure of significant financial and 
managerial resources.

The Company also intends to continue to strategically license 
certain content for its online sites from third parties, such as it did 
with Fodor's, including content which is integrated with internally 
developed content and used on the Company's online sites to provide key 
services. There can be no assurance that these third party content 
licenses will be available to the Company on commercially reasonable 
terms or that the Company will be able to successfully integrate such 
third party content. Such content licenses may expose the Company to 
increased risks, including risks associated with the assimilation of new 
content, the diversion of resources from the development of the Company's 
content, the inability to generate revenues from new content sufficient 
to offset associated acquisition costs and the maintenance of uniform, 
appealing content. The inability to obtain any of these licenses could 
result in delays in site development or services until equivalent content 
can be identified, licensed and integrated. Any such delays in site 
development or services could have a material adverse effect on the 
Company's business, operating results and financial condition.

Governmental Regulation and Legal Uncertainties. Certain segments 
of the travel industry are heavily regulated by the United States and 
international governments, and accordingly, certain services offered by 
the Company are affected by such regulations. For example, the Company is 
subject to United States Department of Transportation ("DOT") 
regulations prohibiting unfair and deceptive practices. In addition, DOT 
regulations concerning the display and presentation of information that 
are currently applicable to the GDS services accessed by the Company 
could be extended to the Company in the future, as well as other laws and 
regulations aimed at protecting consumers accessing online travel 
services or otherwise. In California, under the Seller of Travel Act, the 
Company is required to register as a seller of travel, comply with 
certain disclosure requirements and participate in the State's 
restitution fund. The television industry is also subject to extensive 
regulation at federal, state and local levels, including the Federal 
Communications Act and rules and regulations of the Federal 
Communications Commission. In addition, legislative and regulatory 
proposals under ongoing consideration by Congress and federal agencies 
may materially affect the television industry and the Company's ability 
to obtain distribution for its television programming.

The Company is also subject to regulations applicable to businesses 
generally and laws or regulations directly applicable to access to online 
commerce. Although there are currently few laws and regulations directly 
applicable to the Internet and commercial online services, it is possible 
that a number of laws and regulations may be adopted with respect to the 
Internet or commercial online services covering issues such as user 
privacy, pricing, content, copyrights, distribution, antitrust and 
characteristics and quality of products and services. Furthermore, the 
growth and development of the market for online commerce may prompt calls 
for more stringent consumer protection laws that may impose additional 
burdens on those companies conducting business online. The adoption of 
any additional laws or regulations may decrease the growth of the 
Internet or commercial online services, which could, in turn, decrease 
the demand for the Company's products and services and increase the 
Company's cost of doing business, or otherwise have a material adverse 
effect on the Company's business, operating results and financial 
condition.

Moreover, the applicability to the Internet and commercial online 
services of existing laws in various jurisdictions governing issues such 
as property ownership, sales and other taxes, libel and personal privacy 
is uncertain and may take years to resolve. For example, tax authorities 
in a number of states are currently reviewing the appropriate tax 
treatment of companies engaged in online commerce, and new state tax 
regulations may subject the Company to additional state sales and income 
taxes. Any such new legislation or regulation, the application of laws 
and regulations from jurisdictions whose laws do not currently apply to 
the Company's business, or the application of existing laws and 
regulations to the Internet and commercial online services could have a 
material adverse effect on the Company's business, operating results and 
financial condition.

Risks Associated with International Expansion. A key component of 
the Company's strategy is to expand its operations into international 
markets. The Company anticipates that it will expend significant 
financial and management resources to establish local offices overseas, 
create localized user interfaces and comply with local customs and 
regulations. If the revenues generated by these international operations 
are insufficient to offset the expense of establishing and maintaining 
such operations, the Company's business, operating results and financial 
condition could be materially adversely affected. To date, the Company 
has no experience in developing localized versions of its online sites 
and marketing and distributing its travel services internationally. There 
can be no assurance that the Company will be able to successfully market 
or sell its services in these international markets. In addition to the 
uncertainty as to the Company's ability to expand its international 
presence, there are certain risks inherent in conducting business on an 
international level, such as unexpected changes in regulatory 
requirements, tariffs and other trade barriers, difficulties in staffing 
and managing foreign operations, political instability, currency rate 
fluctuations, seasonality in leisure travel in certain countries and 
potentially adverse tax consequences. There can be no assurance that one 
or more of the foregoing factors will not have a material adverse effect 
on the Company's future international operations and, consequently, on 
its business, operating results and financial condition. 

Risks Associated with Potential Acquisitions. The Company's current 
strategy is to broaden the scope and content of its online sites through 
the acquisition of existing online services and businesses specializing 
in travel-related content, as well as through internally developed new 
travel services offerings. Any future acquisitions would expose the 
Company to increased risks, including risks associated with the 
assimilation of new operations, sites and personnel, the diversion of 
resources from the Company's existing businesses, sites and technologies, 
the inability to generate revenues from new sites or content sufficient 
to offset associated acquisition costs, the maintenance of uniform 
standards, controls, procedures and policies and the impairment of 
relationships with employees and customers as a result of any integration 
of new management personnel.  Acquisitions may also result in additional 
expenses associated with amortization of acquired intangible assets or 
potential businesses. There can be no assurance that the Company would be 
successful in overcoming these risks or any other problems encountered in 
connection with such acquisitions, and its inability to overcome such 
risks could have a material adverse effect on the Company's business, 
operating results and financial condition.

Volatility of Stock Price. The market price of the Common Stock of 
the Company could be subject to significant fluctuations in response to 
quarter-to-quarter variations in the Company's operating results, 
announcements of technological innovations or new products by the Company 
or its competitors, and other events or factors. For example, a shortfall 
in revenue or net income, or increase in losses from levels expected by 
securities analysts, could have an immediate and significant adverse 
effect on the market price of the Company's Common Stock. In addition, 
the stock market in recent years has experienced extreme price and volume 
fluctuations that have particularly affected the market prices of many 
high technology companies and that have often been unrelated or 
disproportionate to the operating performance of companies. These 
fluctuations, as well as general economic and market conditions, may 
adversely affect the market price for the Common Stock.

Antitakeover Effect of Certain Charter Provisions; 
StockholderRights Plan The Board of Directors has the authority to issue 
up to 5,000,000 shares of Preferred Stock and to determine the price, 
rights, preferences, privileges and restrictions, including voting 
rights, of those shares without any further vote or action by the 
stockholders. The rights of the holders of Common Stock may be subject 
to, and may be adversely affected by, the rights of the holders of any 
Preferred Stock that may be issued in the future. The issuance of 
Preferred Stock may have the effect of delaying, deferring or preventing 
a change of control of the Company without further action by the 
stockholders and may adversely affect the voting and other rights of the 
holders of Common Stock, which could have an adverse impact on the market 
price of the Common Stock.  The Company has no present plans to issue 
shares of Preferred Stock. Further, certain provisions of the Company's 
charter documents, including provisions eliminating the ability of 
stockholders to take action by written consent and limiting the ability 
of stockholders to raise matters at a meeting of stockholders without 
giving advance notice, may have the effect of delaying or preventing 
changes in control or management of the Company, which could have an 
adverse effect on the market price of the Company's Common Stock. 

In October 1998, the Company's Board of Directors adopted a 
stockholder rights plan. This plan provides stockholders with special 
purchase rights under certain circumstances,including if any person or 
group acquires 20 percent or more of the Company's common stock. This 
plan could have the effect of making it more difficult for a third party 
to acquire, or of discouraging a third party from attempting to acquire, 
or of making the Company less attractive to a potential acquiror of, a 
majority of the outstanding voting stock of the Company, and may 
complicate or discourage a takeover of the Company. 


PART II.        OTHER INFORMATION

Item 1.         Legal Proceedings.

From time to time, the Company is subject to legal proceedings and 
claims in the ordinary course of business, including claims of alleged 
infringement of trademarks and other intellectual property rights. The 
Company currently is not aware of any legal proceedings or claims that it 
believes will have, individually or in the aggregate, a material adverse 
effect on the its business, operating results and financial condition.

Item 2.         Changes in Securities and Use of Proceeds.

On November 19, 1997, in connection with the Company's initial 
public offering, a Registration Statement on Form S-1 (No. 333-37183) was 
declared effective by the Securities and Exchange Commission, pursuant to 
which 2,500,000 shares of the Company's Common Stock were offered and 
sold for the account of the Company at a price of $11.00 per share, 
generating gross offering proceeds of $27.5 million. The managing 
underwriters were Hambrecht & Quist LLC and NationsBanc Montgomery 
Securities, Inc. After deducting approximately $1.9 million in 
underwriting discounts and $1.0 million in other related expenses, the 
net proceeds of the offering were approximately $24.6 million. The 
Company has used $6.4 million of the net proceeds of the offering for a 
payment to AOL under the distribution agreement with AOL, $1.5 million 
for payments to Excite under the distribution agreement with Excite and 
$1.1 million for a payment to Lycos under the distribution agreement with 
Lycos. The remaining $15.6 million has been invested in investment grade, 
interest bearing securities. The Company intends to use such remaining 
proceeds for capital expenditures, including the acquisition of redundant 
computer and communication systems, for payment of its obligations to 
AOL, Excite and Lycos pursuant to its agreements with AOL, Excite and 
Lycos, and for general corporate purposes, including working capital to 
fund anticipated operating losses.

On October 28, 1998, the Board of Directors adopted a stockholder 
rights plan designed to protect the long-term value of the Company for 
its stockholders during any future unsolicited acquisition attempt. In 
connection with the plan, the Board declared a dividend of one preferred 
share purchase right for each share of the Company's Common Stock 
outstanding on November 12, 1998 (the "Record Date") and further directed 
the issuance of one such right with respect to each share of the 
Company's common stock that is issued after the Record Date, except in 
certain circumstances. The rights will expire on October 28, 2008. The 
rights are initially attached to the Company's Common Stock and will not 
trade separately. If a person or a group (an "Acquiring Person") acquires 
beneficial ownership of 20 percent or more of the Company's Common Stock, 
or announces an intention to make a tender offer for the Company's Common 
Stock, the consummation of which would result in a person or group 
becoming an Acquiring Person, then the rights will be distributed (the 
"Distribution Date") and will thereafter trade separately from the Common 
Stock. After the Distribution Date, each right may be exercised for 
1/1000th of a share of Series A Participating Preferred Stock ("Series A 
Preferred Stock") at an exercise price of $100. In connection with the 
adoption of the plan, the Board of Directors also amended certain 
provisions of the Company's Bylaws relating to the notice requirements 
for the nomination of persons for election to the Board of Directors and 
the proposal of business to be transacted at annual meetings of 
stockholders and the ability to call special meetings of the Company's 
stockholders.  


Item 3.         Defaults Upon Senior Securities - Not Applicable.


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

                        None.

Item 5.         Other Information.

        None.

Item 6.         Exhibits and Reports on Form 8-K.

(a)     Exhibits:

Exhibit 3.2 -  Bylaws (as amended on October 28, 1998)

Exhibit 3.4 -  Certificate of Designation of Rights, 
Preferences and Priveleges of Series A Participating Preferred Stock

Exhibit 10.21 - Preferred Shares Rights Agreement dated October 29, 1998

Exhibit 27.1 - Financial Data Schedule

(b)     Reports on Form 8-K - None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 
1934, the Registrant has duly caused this report to be signed on its 
behalf by the undersigned thereunto duly authorized.

Preview Travel, Inc.






By:
/s/   KENNETH R. PELOWSKI

Kenneth R. Pelowski
Executive Vice President, 
Finance and Administration, 
and Chief Financial Officer 
(Principal Financial Officer)




By:
/s/   BRUCE CARMEDELLE

Bruce Carmedelle
Vice President and Corporate 
Controller  (Principal Accounting Officer)


Date:  November 16, 1998

EXHIBIT INDEX

3.2       Bylaws (as amended on October 28, 1998)

3.4       Certificate of Designation of Rights, Preferences and 
Priveleges of Series A Participating Preferred Stock

10.21   Preferred Shares Rights Agreement dated October 29, 1998

27.1     Financial Data Schedule