SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                   (MARK ONE)

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

                 FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 1999

                                       OR

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

           FOR THE TRANSITION PERIOD FROM ____________ TO ____________

                          COMMISSION FILE NUMBER 0-9747


                       EXCALIBUR TECHNOLOGIES CORPORATION
             (Exact name of registrant as specified in its charter)


                   DELAWARE                           85-0278207
        (State or other jurisdiction of            (I.R.S. Employer
        incorporation  or  organization)          Identification No.)

     1921 GALLOWS ROAD, SUITE 200, VIENNA, VIRGINIA           22182
     (Address  of  principal  executive  offices)           (Zip Code)

       Registrant's telephone number, including area code:  (703) 761-3700

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 the filing
requirements  for  the  past  90  days.  Yes     No  __

As  of December 9, 1999, 14,409,409 shares of the registrant's Common Stock, par
value  $.01  per  share,  were  outstanding.


<PAGE>
<TABLE>
<CAPTION>
                                  EXCALIBUR TECHNOLOGIES CORPORATION

                                     QUARTERLY REPORT ON FORM 10-Q
                                FOR THE QUARTER ENDED OCTOBER 31, 1999

                                           TABLE OF CONTENTS


                                    PART I.  FINANCIAL INFORMATION



Item 1.        Financial Statements:                                                              Page
                                                                                                  ----
<S>            <C>                                                                                <C>
               Consolidated Balance Sheets
               October 31, 1999 (unaudited) and January 31, 1999 . . . . . . . . . . . . . . . .     3

               Consolidated Statements of Operations and Comprehensive Income (Loss) (unaudited)
               Three and nine months ended October 31, 1999 and 1998 . . . . . . . . . . . . . .     4

               Consolidated Statements of Cash Flows (unaudited)
               Nine months ended October 31, 1999 and 1998 . . . . . . . . . . . . . . . . . . .     5

               Notes to Consolidated Financial Statement . . . . . . . . . . . . . . . . . . . .     6

Item 2.        Management's Discussion and Analysis of Financial Condition
               and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .    10


                                    PART II. OTHER INFORMATION

Items 1. - 6.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    18


Signatures     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    19
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                EXCALIBUR TECHNOLOGIES CORPORATION
                                         AND SUBSIDIARIES
                                   CONSOLIDATED BALANCE SHEETS
                              (in thousands, except per share data)


                          ASSETS                            October 31, 1999    January 31, 1999
                                                              (unaudited)
<S>                                                        <C>                 <C>
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . .  $           6,468   $           5,851
Short term investments. . . . . . . . . . . . . . . . . .                178                  --
Accounts receivable, net of allowance for doubtful
 accounts of $625 and $660, respectively. . . . . . . . .              9,690               6,402
Prepaid expenses and other. . . . . . . . . . . . . . . .              2,747               2,291
                                                           ------------------  ------------------
   Total current assets . . . . . . . . . . . . . . . . .             19,083              14,544

Equipment and leasehold improvements, net of accumulated
  depreciation of $7,999 and $6,986, respectively . . . .              1,750               2,034
Other assets. . . . . . . . . . . . . . . . . . . . . . .              1,774               3,134
                                                           ------------------  ------------------
   Total assets . . . . . . . . . . . . . . . . . . . . .  $          22,607   $          19,712
                                                           ==================  ==================

       LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of capital lease obligations. . . . . . .  $               9   $              --
Accounts payable. . . . . . . . . . . . . . . . . . . . .              2,144               1,933
Accrued expenses. . . . . . . . . . . . . . . . . . . . .              1,482               1,829
Deferred revenues . . . . . . . . . . . . . . . . . . . .              2,650               2,690
Deferred compensation . . . . . . . . . . . . . . . . . .                 80                  86
                                                           ------------------  ------------------
   Total current liabilities. . . . . . . . . . . . . . .              6,365               6,538
                                                           ------------------  ------------------

Capital lease obligations, net of current portion . . . .                 12                  --
                                                           ------------------  ------------------
   Total liabilities. . . . . . . . . . . . . . . . . . .              6,377               6,538
                                                           ------------------  ------------------

Shareholders' Equity:
5% Cumulative convertible preferred stock,
 $0.01 par value, preference in liquidation
 $10 per share, 1,000 shares authorized;
 27 shares issued and outstanding . . . . . . . . . . . .                271                 271
Common stock, $0.01 par value, 40,000
 shares authorized; 14,377 and 13,689
 shares issued and outstanding, respectively. . . . . . .                144                 137
Additional paid-in capital. . . . . . . . . . . . . . . .             74,640              68,631
Accumulated deficit . . . . . . . . . . . . . . . . . . .            (58,847)            (55,798)
Accumulated other comprehensive income (loss) . . . . . .                 22                 (67)
                                                           ------------------  ------------------
   Total shareholders' equity . . . . . . . . . . . . . .             16,230              13,174
                                                           ------------------  ------------------
     Total liabilities and shareholders' equity . . . . .  $          22,607   $          19,712
                                                           ==================  ==================
</TABLE>

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


                                        3
<PAGE>
<TABLE>
<CAPTION>
                         EXCALIBUR TECHNOLOGIES CORPORATION

CONSOLIDATED  STATEMENTS  OF  OPERATIONS  AND  COMPREHENSIVE  INCOME  (LOSS)
                                     (unaudited)
                        (in thousands, except per share data)


                                              Three Months Ended  Nine Months Ended
                                                  October 31,         October 31,
                                                1999      1998      1999      1998
                                              --------  --------  --------  --------
<S>                                           <C>       <C>       <C>       <C>
REVENUES:
  Software . . . . . . . . . . . . . . . . .  $ 7,003   $ 5,998   $21,413   $14,563
  Maintenance. . . . . . . . . . . . . . . .    1,363     1,264     3,783     3,910
                                              --------  --------  --------  --------
                                                8,366     7,262    25,196    18,473
                                              --------  --------  --------  --------

EXPENSES:
  Cost of software revenues. . . . . . . . .    1,229     1,192     3,510     2,712
  Cost of maintenance revenues . . . . . . .      542       326     1,618       978
  Sales and marketing. . . . . . . . . . . .    4,064     3,367    11,708    10,025
  Research and product development . . . . .    2,173     2,072     7,035     5,752
  General and administrative . . . . . . . .    1,369     1,067     4,081     3,309
                                              --------  --------  --------  --------
                                                9,377     8,024    27,952    22,776
                                              --------  --------  --------  --------
Operating loss . . . . . . . . . . . . . . .   (1,011)     (762)   (2,756)   (4,303)
                                              --------  --------  --------  --------

OTHER INCOME/ (EXPENSES):
     Interest income, net. . . . . . . . . .       55        52       179       194
     Equity in net loss of affiliate . . . .       --       (83)      (41)     (299)
     Write-off of investment in affiliate. .       --        --      (430)       --
                                              --------  --------  --------  --------
Net loss . . . . . . . . . . . . . . . . . .     (956)     (793)   (3,048)   (4,408)
Dividends on preferred stock . . . . . . . .        3         3        10        10
                                              --------  --------  --------  --------
Net loss applicable to common stock. . . . .  $  (959)  $  (796)  $(3,058)  $(4,418)
                                              ========  ========  ========  ========
Basic and diluted net loss per common share.  $ (0.07)  $ (0.06)  $ (0.21)  $ (0.33)
Weighted-average number of common shares
      outstanding. . . . . . . . . . . . . .   14,363    13,641    14,215    13,471
Other comprehensive income (loss):
Net loss . . . . . . . . . . . . . . . . . .     (956)     (793)   (3,048)   (4,408)
     Foreign currency translation adjustment       18       (52)       89       (52)
                                              --------  --------  --------  --------
Comprehensive loss . . . . . . . . . . . . .  $  (938)  $  (845)  $(2,959)  $(4,460)
                                              ========  ========  ========  ========
</TABLE>

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


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                EXCALIBUR TECHNOLOGIES CORPORATION
                                         AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                           (unaudited)
                                          (in thousands)


                                                                               Nine Months Ended
                                                                                  October 31,
                                                                                 1999      1998
                                                                               --------  --------
<S>                                                                            <C>       <C>
Cash Flows from Operating Activities:
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $(3,048)  $(4,408)
  Adjustments to reconcile net loss to net cash used in operating activities:
    Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . .    1,126     1,099
    Bad debt expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . .      340       125
    Equity in net loss of affiliate . . . . . . . . . . . . . . . . . . . . .       41       299
    Write-off of investment in affiliate. . . . . . . . . . . . . . . . . . .      430        --
  Changes in operating assets and liabilities:
    Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . .   (3,612)    2,037
    Prepaid expenses and other. . . . . . . . . . . . . . . . . . . . . . . .      348    (1,514)
    Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . .     (136)      (52)
    Deferred revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . .      (36)      169
                                                                               --------  --------
  Net cash used in operating activities . . . . . . . . . . . . . . . . . . .   (4,547)   (2,245)
                                                                               --------  --------

Cash Flows from Investing Activities:
  Purchases of equipment and leasehold improvements . . . . . . . . . . . . .     (706)     (939)
  Purchase of investments . . . . . . . . . . . . . . . . . . . . . . . . . .     (178)     (984)
  Proceeds from maturities of investments . . . . . . . . . . . . . . . . . .       --     1,481
  Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       --      (226)
                                                                               --------  --------
  Net cash used in investing activities . . . . . . . . . . . . . . . . . . .     (884)     (668)
                                                                               --------  --------

Cash Flows from Financing Activities:
  Proceeds from the exercise of stock options . . . . . . . . . . . . . . . .    1,207       431
  Gross proceeds from the issuance of common stock. . . . . . . . . . . . . .    5,145     3,344
  Costs incurred in connection with issuance of common stock. . . . . . . . .     (342)       --
  Repayment of capital lease obligations. . . . . . . . . . . . . . . . . . .      (24)       --
                                                                               --------  --------
  Net cash provided by financing activities . . . . . . . . . . . . . . . . .    5,986     3,775
                                                                               --------  --------

The Effect of Exchange Rate Changes on Cash . . . . . . . . . . . . . . . . .       62      (117)
                                                                               --------  --------
Net Increase in Cash and Cash Equivalents . . . . . . . . . . . . . . . . . .      617       745

Cash and Cash Equivalents, beginning of period. . . . . . . . . . . . . . . .    5,851     4,939
                                                                               --------  --------

Cash and Cash Equivalents, end of period. . . . . . . . . . . . . . . . . . .  $ 6,468   $ 5,684
                                                                               ========  ========
</TABLE>

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


                                        5
<PAGE>
                       EXCALIBUR TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                OCTOBER 31, 1999


(1)     THE  COMPANY

The  consolidated  financial  statements  include  the  accounts  of  Excalibur
Technologies Corporation ("Excalibur") and its wholly owned subsidiaries.  These
entities  are  collectively  referred  to  hereinafter  as  the  "Company."  All
significant  intercompany  transactions  and  accounts  have  been  eliminated.

The Company designs, develops and markets enterprise-wide accurate, scalable and
secure  knowledge  retrieval  and  digital  asset  management software solutions
capable  of  supporting  paper,  text, image and video data.  The Company offers
consulting,  training, product maintenance and system implementation services in
support  of  its  software products.  The Company licenses its software products
directly  to  commercial  businesses  and  government  agencies throughout North
America,  Europe  and other parts of the world and also distributes its software
products  to  end  users  through license agreements with value-added resellers,
system  integrators,  original  equipment  manufacturers,  application  service
providers  and  other  strategic  partners.

The  Company  incurred a net loss of $3.0 million in the nine month period ended
October  31,  1999  and  has  incurred  cumulative losses of approximately $19.4
million  over  the  last three fiscal years.  The accumulated deficit at October
31,  1999  was  $58.8  million.  The Company's operations are subject to certain
risks  and uncertainties including, among others, the dependence upon the timing
of  the  closing  on  sales  of  large  software  licenses; actual and potential
competition  by entities with greater financial resources, experience and market
presence  than  the  Company;  rapid  technological  changes; the success of the
Company's  product  marketing  and  product  distribution  strategies; the risks
associated  with  acquisitions  and  international expansion; the need to manage
growth;  the need to retain key personnel and protect intellectual property; and
the  availability  of  additional  capital  financing on terms acceptable to the
Company.


(2)     SIGNIFICANT  ACCOUNTING  POLICIES

FINANCIAL  STATEMENT  PRESENTATION

The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  and  disclosure of
contingent  assets  and  liabilities at the date of the financial statements and
the  reported  amounts  of  revenues  and  expenses during the reporting period.
Actual  results  could  differ  from  those  estimates.

These  consolidated financial statements are unaudited and have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission  regarding  interim  financial  reporting.  Accordingly,  they do not
include  all  of  the  information  and footnotes required by generally accepted
accounting  principles  for  complete  financial statements, and it is suggested
that  these  consolidated  financial  statements be read in conjunction with the
consolidated  financial  statements,  and  the  notes  thereto,  included in the
Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1999.
In  the  opinion  of  management,  the consolidated financial statements for the
fiscal  periods  presented  herein  include  all adjustments that are normal and
recurring  which  are  necessary  for  a  fair  statement of the results for the
interim  periods. The results of operations for the three and nine month periods
ended  October  31,  1999  are not necessarily indicative of the results for the
entire  fiscal  year  ending  January  31,  2000.

REVENUE  RECOGNITION

The  American  Institute of Certified Public Accountants has issued Statement of
Position  97-2,  "Software  Revenue  Recognition,"  ("SOP 97-2") that supercedes
Statement  of Postion 97-1.  The Company has implemented SOP 97-2 in fiscal year
1999  and  it  has  not  had  a  material  financial  impact  on  the  Company.


                                        6
<PAGE>
Revenues  from  the  sale  of  computer  software  licenses  are recognized upon
shipment  of product provided that the fee is fixed and determinable, persuasive
evidence  of  an  agreement exists and collection of the resulting receivable is
considered  probable. Revenues related to agreements with customers that contain
future performance requirements are recognized when the performance requirements
are satisfied.  Revenues related to customer support agreements are deferred and
recognized ratably over the term of the respective agreements, which are usually
one  year  in  length.

Customization is sometimes involved in the development of a software solution by
the Company.  Under these circumstances, the Company's revenues are derived from
fixed  price  contracts  and  revenue  is  recognized  using  the
percentage-of-completion  method  based  on  the  relationship  of  actual costs
incurred  to  total  costs  estimated  to  be  incurred over the duration of the
contract.

CASH,  CASH  EQUIVALENTS  AND  SHORT  TERM  INVESTMENTS

The  Company  considers all highly liquid investments purchased with an original
maturity  of  three  months  or  less  to be cash equivalents.  Cash equivalents
consist of funds deposited in money market accounts.  Consequently, the carrying
amount  of  cash  and  cash  equivalents approximate fair value.  The balance of
short term investments at October 31, 1999 consisted of a certificate of deposit
pledged  to  collateralize  a  letter  of credit required for a leased facility.

NET  LOSS  PER  COMMON  SHARE

Basic loss per common share includes no dilution and is computed by dividing net
loss  available  to common stockholders by the weighted average number of common
shares  outstanding  for the period.  Diluted loss per common share includes the
potential  dilution  that  would occur if securities or other contracts to issue
common stock were exercised or converted into common stock.  Options to purchase
2,564,174 shares of common stock and cumulative convertible preferred stock that
were  outstanding  at  October  31, 1999 were not included in the computation of
diluted loss per common share for all periods presented as their effect would be
anti-dilutive.  As a result, the basic and diluted loss per common share amounts
are  identical.

INCOME  TAXES

Deferred taxes are provided utilizing the liability method, whereby deferred tax
assets  are  recognized  for deductible temporary differences and operating loss
and  tax  credit  carryforwards  and deferred tax liabilities are recognized for
taxable  temporary  differences.  Temporary  differences  are  the  differences
between  the  reported  amounts  of  assets and liabilities and their tax bases.
Deferred  tax  assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of enactment.  Deferred tax assets are reduced by
a valuation allowance when, in the opinion of management, it is more likely than
not  that  some  portion or all of the deferred tax assets will not be realized.
The Company has provided a full valuation allowance against its net deferred tax
asset  as  of  October  31,  1999  and  January  31,  1999,  respectively.


(3)     INVESTMENT  IN  AFFILIATE

In  July  1996,  the  Company  authorized  the  use  of  its  name  by Excalibur
Technologies  N.V. ("ETNV"), a Belgian company incorporated in June 1996 for the
purpose  of  selling  and marketing the Company's products and services within a
large  territory  including  most  of  Northern  Europe  and Italy.  The Company
contributed approximately $488,000 in cash to ETNV in consideration for 13.2% of
its  voting  capital  stock.  In  May  1999,  the  Company  terminated  its 1996
distribution  agreement  with  ETNV  because ETNV failed to pay to Excalibur the
minimum  required  license  fees  for  the  quarter  ended  January  31, 1999 of
approximately $900,000 as well as an additional amount of approximately $400,000
that  was  due  on  April  20,  1999.  Promptly  after  giving  notice  of  such
termination  Excalibur  commenced  a lawsuit in the United States District Court
for  the  Eastern  District  of  Virginia seeking as damages such unpaid minimum
license fees and other amounts due and owing from ETNV.  The lawsuit was settled
on  July  21,  1999.  No  payment  was  made  by ETNV as part of the settlement.

In  connection  with  the  original  organization  of  ETNV,  the Company issued
warrants  to  purchase  148,500  shares of the Company's common stock to certain
shareholders  of  ETNV.  The  warrants were exercisable at a price of $22.00 per
share  for  a  term  of  seven years but only if ETNV achieved certain financial
objectives.  The  value of the warrants on the date of grant was estimated to be
$758,000  and  was  included,  net  of  amortization,  in  other  assets  in the
consolidated  balance  sheet.  As  a  result of the termination of the Company's
distribution  agreement  with  ETNV,  the  unamortized value of the warrants and
investment costs totaling $430,000 was written off during the three months ended
April  30,  1999.


                                        7
<PAGE>
Prior  to termination of the distribution agreement, the Company's investment in
ETNV  was  accounted  for  using  the  equity  method.  The  original investment
exceeded  the  Company's  share  of  the  underlying  net  assets  of  ETNV  by
approximately $827,000.  The excess was being amortized over a five-year period.
The  amortization  of  the  excess, as well as the Company's share of ETNV's net
loss  for  the period and the elimination of the Company's share of gross profit
included  in  ETNV's  prepaid  license  is  included  in  equity  in net loss of
affiliate in the accompanying consolidated statements of operations for the nine
months  ended  October  31, 1999 and 1998.  The net balance of the investment in
and  advances  to  ETNV  of  $471,000  was  included  in  other  assets  in  the
accompanying consolidated balance sheet at January 31, 1999.  That account had a
net  balance  of $430,000 when it was written off in the quarter ended April 30,
1999.  No  revenue  related  to  the agreement was recorded in the current year.
For  the  three  and  nine  month  periods  ended  October 31, 1998, the Company
recorded  revenues  of  $269,000  and  $929,000,  respectively.


(4)     CAPITALIZATION

STOCK  OFFERINGS

In  March  1999 the Company completed a private placement of 500,000 shares (the
"Shares") of its common stock to unaffiliated accredited investors, most of whom
are institutional investors.  The Shares were sold at a purchase price of $10.00
per  share,  resulting  in  net  proceeds  to  the Company of approximately $4.7
million.  Net  proceeds  from  the  placement  are  being  used  to fund ongoing
operations  and  for  general corporate purposes of the Company.  A registration
statement  under  the  Securities  Act of 1933 covering resale of the Shares was
declared  effective  by the Securities and Exchange Commission on July 14, 1999.
The Shares were sold pursuant to an exemption from the registration requirements
of  the  Securities  Act  of  1933.

During the nine months ended October 31, 1999, the Company issued 173,000 shares
of common stock upon the exercise of options resulting in total cash proceeds of
$1,207,000 and the utilization of $6,000 of deferred compensation.  Additionally
the Company issued 14,000 shares of common stock to participants of the employee
stock  purchase  plan  resulting  in  cash  proceeds  of  $145,000.


(5)     SEGMENT  REPORTING

On  November  17,  1999,  the  Company  formally  announced the alignment of the
business  into  two  operating  segments.  The  Excalibur  Applications  Group
develops, markets and services the Excalibur RetrievalWare suite of products and
will  focus  on  global  2000  and  government  organizations building knowledge
management  intranets  and  portals,  as  well  as Internet based e-commerce and
online service businesses.  The Excalibur Media Services Group develops, markets
and  services  the  Screening  Room  product  line  concentrating  primarily  on
opportunities  in  association  with  third  party application service providers
("ASP")  and  original  equipment  manufacturers  ("OEM") who will host or embed
Screening  Room  in  their  product  and  service  offerings.

Prior  to  the  second  quarter  of  the current year, the Company operated as a
single  segment.  During  the  second  quarter  of the current year, the revenue
model  for  the  Media  Services  Group  segment  became differentiated from the
Applications  Group  segment.  Media  Services  Group  revenues  are  generated
primarily  from  OEM  and  ASP  transactions,  which may involve development and
customization  by  the  Company.  While OEM deals are a significant component of
the  Application  Group  revenues,  the  majority  of  revenue is generated from
licensing  the  RetrievalWare  suite  of  products  directly to corporations and
government  organizations  building  intranets and Internet based e-commerce and
online  service  businesses.  Until  the second quarter of the current year, the
Media  Services Group was not forecast to meet any of the 10% significance tests
as  outlined  in  Financial  Accounting  Standards Board  ("FASB") SFAS No. 131,
"Disclosures  about  Segments  of  an  Enterprise  and  Related  Information."

The  following  charts  represent  revenues,  expenses  and operating profit (in
thousands  of dollars) attributable to the Applications Group and Media Services
Group  operating segments for the three and nine month periods ended October 31,
1999  and  1998.  Expenses  for  each  segment  consist  of direct and allocated
expenses.  Revenues  are  entirely  from  external  customers.


                                        8
<PAGE>
<TABLE>
<CAPTION>
                        APPLICATIONS GROUP  MEDIA SERVICES GROUP       TOTAL
                        ------------------  --------------------       -----
                        THREE MONTHS ENDED   THREE MONTHS ENDED   THREE MONTHS ENDED
                            OCTOBER 31,         OCTOBER 31,          OCTOBER 31,
                           1999    1998        1999      1998       1999     1998
                          ------  ------     --------  --------   --------  -------
<S>                       <C>     <C>        <C>       <C>        <C>       <C>
TOTAL REVENUE . . . . .   $7,549  $6,752     $   817   $   510    $ 8,366   $7,262
OPERATING EXPENSES. . .    7,310   6,184       2,067     1,840      9,377    8,024
                          ------  ------     --------  --------   --------  -------
OPERATING INCOME (LOSS)   $  239  $  568     $(1,250)  $(1,330)   $(1,011)  $ (762)
                          ------  ------     --------  --------   --------  -------
</TABLE>

<TABLE>
<CAPTION>
                         APPLICATIONS GROUP  MEDIA SERVICES GROUP       TOTAL
                         ------------------  --------------------       -----
                          NINE MONTHS ENDED   NINE MONTHS ENDED   NINE MONTHS ENDED
                            OCTOBER 31,         OCTOBER 31,          OCTOBER 31,
                           1999      1998       1999      1998      1999      1998
                          -------  --------   --------  --------  --------  --------
<S>                       <C>      <C>        <C>       <C>       <C>        <C>
TOTAL REVENUE . . . . .   $21,264  $17,579    $ 3,932   $   894   $25,196   $18,473
OPERATING EXPENSES. . .    21,170   18,119      6,782     4,657    27,952    22,776
                          -------  --------   --------  --------  --------  --------
OPERATING INCOME (LOSS)   $    94  $  (540)   $(2,850)  $(3,763)  $(2,756)  $(4,303)
                          -------  --------   --------  --------  --------  --------
</TABLE>

For  the  three  months  ended  October  31,  1999, revenues from two individual
customers  comprised  approximately  18.5%  and  12.0%  of  total  revenues,
respectively.  Revenues  derived  from  sales to agencies of the U.S. Government
were  approximately  11.8%  of  total  revenues  for  the  current  quarter.


(6)     RECENTLY  ISSUED  ACCOUNTING  PRONOUNCEMENTS

In  June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133,  "Accounting  for  Derivative  Instruments  and  Hedging Activities."  This
statement  establishes  accounting  and reporting standards requiring that every
derivative  instrument,  including  certain  derivative  instruments embedded in
other  contracts,  be  recorded  in  the  balance  sheet  as  either an asset or
liability  measured at its fair value.  The statement also requires that changes
in  the  derivative's fair value be recognized in earnings unless specific hedge
accounting  criteria are met.  The Company believes the adoption of SFAS No. 133
will  not  have  a  material  effect  on  the  financial  statements.

The  American  Institute of Certified Public Accountants has issued Statement of
Position  98-9,  "Modification  of  SOP-97-2, Software Revenue Recognition, With
Respect  to  Certain  Transactions."  SOP  98-9  is  effective  for  revenue
transactions  entered  into  in the Company's fiscal year 2001.  The Company has
evaluated SOP 98-9 and does not believe its adoption will have a material effect
on  the  financial  statements.


(7)     LINE  OF  CREDIT

The  Company has available a $3,000,000 line of credit under an agreement with a
bank  which  expires on September 20, 2000.  Up to $250,000 of borrowings may be
in  the  form  of  letters  of  credit.  The line of credit is collateralized by
substantially  all  corporate  assets.  Borrowings under the line of credit bear
interest  at  the lender's prime rate (8.25% at October 31, 1999) plus up to 1%.
The  agreement  requires  the Company to comply with certain financial covenants
that are computed on a monthly basis and prohibits additional borrowings without
the  bank's  approval.  As  of  October 31, 1999, no borrowings were outstanding
under  the  line  of  credit.


                                        9
<PAGE>
ITEM  2.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
             RESULTS  OF  OPERATIONS

OVERVIEW

The  statements  contained  in  this  report  that are not purely historical are
forward-looking  statements  within the meaning of Section 27A of the Securities
Act  of  1933  and Section 21E of the Securities Exchange Act of 1934, including
without  limitation  statements  about  the  Company's  expectations,  beliefs,
intentions  or  strategies regarding the future.  All forward-looking statements
included in this report are based on information available to the Company on the
date  hereof  and  the  Company  assumes  no  obligation  to  update  any  such
forward-looking  statements.  The  forward-looking  statements  contained herein
involve  risks  and  uncertainties.  The  Company's  actual results could differ
materially  from  those  anticipated  in  these  forward-looking statements as a
result  of  certain  factors,  including  those  set  forth  in  this  report.

The  Company  principally  earns  revenues  from  the  licensing of its software
products  to  commercial  businesses  and  government  agencies throughout North
America, Europe and other parts of the world.  The Company licenses its software
to end-users directly and also distributes its software products through license
agreements  with  value-added  resellers, system integrators, original equipment
manufacturers,  application  service  providers  and  other  strategic partners.
Revenues  are  provided  under software licenses with new customers and from the
related  sale  of  product  maintenance,  training  and  implementation  support
services.  Additions  to  the  number  of  authorized  users,  upgrades to newer
product  versions  and  the  renewal  of  product  maintenance  arrangements  by
customers  pursuant  to  existing licenses also provide revenues to the Company.
Under  software  maintenance  contracts,  customers  are  typically  entitled to
receive  telephone  support,  software  bug fixes and new releases of particular
software  products  when  and  if  they  are  released.

The  Company's  software  products are designed to enable individuals to quickly
search  and  retrieve  relevant  information  residing  on  a LAN/WAN, intranet,
paper-based  archive,  extranet, video archive or the Internet through a unified
web-based  user  interface.  There  are  generally  two  markets  today  for the
Company's  products,  text knowledge retrieval and video indexing and retrieval.
The  market  for  text  knowledge  retrieval  products  consists  of  electronic
publishing,  online  information services, e-commerce services, global corporate
intranets,  paper  archival  systems  as well as market, business and government
intelligence.  The  market  for  video indexing and retrieval solutions includes
application  and  website  developers,  certain  government  agencies as well as
commercial media, entertainment and broadcasting companies.  Knowledge retrieval
products  include  the RetrievalWare family of products and EFS.  Video products
include  Visual  RetrievalWare,  VAE  and Screening Room, an advanced end-to-end
solution  for  real-time  capturing, analyzing, cataloguing, browsing, searching
and retrieving video over intranets and the Internet.  The Company believes that
in addition to other competitive advantages, it holds a competitive advantage in
that  the  Company's products accommodate the indexing and retrieval of multiple
data  types.

In  order  to compete more effectively in each of these two markets, the Company
announced  on November 17, 1999 the alignment of the business into two operating
segments.  The  Excalibur  Applications  Group  will  focus  on  the  knowledge
retrieval  market  supporting  knowledge  management,  e-commerce  and  online
publishing.  The  Excalibur  Media Services Group will provide software products
and  services  primarily  to  original  equipment  manufacturers and application
service  providers  focusing  on Internet and intranet video content management.

The  following  chart represents revenues and expenses (in thousands of dollars)
attributable  to  the  Applications  Group  and  Media  Services Group operating
segments  for  the three and nine month periods ended October 31, 1999 and 1998.
Expenses  for  each  segment  consist  of  direct  and  allocated  expenses.

<TABLE>
<CAPTION>
                        APPLICATIONS GROUP  MEDIA SERVICES GROUP  APPLICATIONS GROUP  MEDIA SERVICES GROUP
                        ------------------  --------------------  ------------------  --------------------
                        THREE MONTHS ENDED   THREE MONTHS ENDED    NINE MONTHS ENDED   NINE MONTHS ENDED
                            OCTOBER 31,         OCTOBER 31,           OCTOBER 31,
                           1999     1998       1999      1998       1999      1998      1999        1998
                         -------  --------   --------  --------   --------  --------  --------    --------
<S>                      <C>      <C>        <C>       <C>        <C>       <C>       <C>         <C>
TOTAL REVENUE . . . . .  $7,549   $  6,752   $   817   $   510    $ 21,264  $17,579   $ 3,932     $   894
OPERATING EXPENSES. . .   7,310      6,184     2,067     1,840      21,170   18,119     6,782       4,657
                         -------  --------   --------  --------   --------  --------  --------    --------
OPERATING INCOME (LOSS)  $  239   $    568   $(1,250)  $(1,330)   $     94  $  (540)  $(2,850)    $(3,763)
                         -------  --------   --------  --------   --------  --------  --------    --------
</TABLE>


                                       10
<PAGE>
RESULTS  OF  OPERATIONS

Revenues
--------
Total  revenues  increased 15% in the third quarter of the current year over the
third quarter last year.  Revenues from the Company's flagship product Excalibur
RetrievalWare  increased  13%  in  the third quarter of the current year to $6.2
million from $5.5 million in the third quarter of the prior year.  RetrievalWare
revenues  represented  89%  of software product revenues in the third quarter of
the  current year compared to 91% in the third quarter last year.  Revenues from
the Screening Room products rose 65% to $0.8 million in the current quarter from
$0.5  million  in  the same quarter last year.  Revenues from the Screening Room
products now represent 10% of total revenues compared to 7% in the third quarter
last  year.  Due  to  the  Company's  transition  from  the  EFS product line to
RetrievalWare,  $16  thousand in EFS software revenue was recognized compared to
$37  thousand  in  the  third  quarter  last  year.

Total  software  revenues  increased  17% in the third quarter this year to $7.0
million  from  $6.0  million  in  the  third  quarter  last year. North American
software  revenues  grew  60%  in  the  third  quarter to $5.6 million from $3.5
million  in  the  third  quarter  last  year.  International  software  revenues
decreased 43% to $1.4 million in the third quarter of the current year from $2.5
million  in  the  third  quarter  last  year.

For  the  nine months ended October 31, 1999, total revenues were $25.2 million,
an  increase  of  36%  over  total  revenues  of  $18.5 million reported for the
corresponding  period last year.  Revenues from RetrievalWare for the first nine
months  of the fiscal year increased 30% to $17.5 million from $13.5 million for
the  first  nine  months of last year. Revenues from the Screening Room products
were  $3.8  million  for the nine months ended October 31, 1999 compared to $0.8
million  in  the  corresponding  period  last  year.  Revenues from EFS were $36
thousand  for  the nine months of this fiscal year compared to $265 thousand for
the  same  period  last  year.

Total  software  revenues  for the nine months ended October 31, 1999 were $21.4
million,  an  increase  of  47%  over  software revenues of $14.6 million in the
comparable  period  last  year.  Software revenues from North American sales for
the nine months ended October 31, 1999 increased 79% from the corresponding nine
month  period of last year.  International software revenues decreased 7% in the
first  nine  months  of  this  fiscal  year  from  the  same  period  last year.

The  charts  below  summarize the components of revenues and expenses, including
the  amounts expressed as a percentage of total revenues, for the three and nine
month  periods ended October 31, 1999 and 1998, and the percentage change in the
amounts  between  fiscal  periods  (dollars  in  thousands).

<TABLE>
<CAPTION>
                                COMPONENTS OF REVENUE AND EXPENSES    INCREASE/
                                  THREE MONTHS ENDED OCTOBER 31,      (DECREASE)
                                     1999                1998
                                      % OF TOTAL          % OF TOTAL
                                $      REVENUES     $      REVENUES       %
                              ------  ----------  ------  ----------  ----------
<S>                           <C>     <C>         <C>     <C>         <C>
REVENUES:
  RETRIEVALWARE. . . . . . .  $6,199         74%  $5,482         75%         13%
  EFS. . . . . . . . . . . .      16         --       37          1         (57)
  SCREENING ROOM . . . . . .     788         10      479          7          65
                              ------  ----------  ------  ----------  ----------
TOTAL SOFTWARE . . . . . . .   7,003         84    5,998         83          17
MAINTENANCE. . . . . . . . .   1,363         16    1,264         17           8
                              ------  ----------  ------  ----------  ----------
    TOTAL REVENUES . . . . .  $8,366        100%  $7,262        100%         15%
                              ------  ----------  ------  ----------  ----------

EXPENSES:
  COSTS OF SALES . . . . . .  $1,771         21%  $1,518         20%         17%
  SALES AND MARKETING. . . .   4,064         49    3,367          46         21
  RESEARCH AND PRODUCT
     DEVELOPMENT . . . . . .   2,173         26    2,072          29          5
  GENERAL AND ADMINISTRATIVE   1,369         16    1,067          15         28
                              ------  ----------  ------  -----------  ---------
    TOTAL EXPENSES . . . . .  $9,377        112%  $8,024         110%        17%
                              ------  ----------  ------  -----------  ---------
</TABLE>


                                       11
<PAGE>
<TABLE>
<CAPTION>
                                       COMPONENTS OF REVENUE AND EXPENSES         INCREASE/
                                          NINE MONTHS ENDED OCTOBER 31,           (DECREASE)
                                             1999                  1998
                                                % OF TOTAL            % OF TOTAL
                                        $        REVENUES       $      REVENUES        %
                                   -----------  -----------  -------  ----------  ----------
<S>                                <C>          <C>          <C>      <C>         <C>
REVENUES:
  RETRIEVALWARE . . . . . . . . .  $    17,528          70%  $13,459         73%         30%
  EFS . . . . . . . . . . . . . .           36          --       265          1         (86)
  SCREENING ROOM. . . . . . . . .        3,849          15       839          5         359
                                   -----------  -----------  -------  ----------  ----------
TOTAL SOFTWARE. . . . . . . . . .       21,413          85    14,563         79          47
MAINTENANCE . . . . . . . . . . .        3,783          15     3,910         21          (3)
                                   -----------  -----------  -------  ----------  ----------
    TOTAL REVENUES. . . . . . . .  $    25,196         100%   18,473        100%         36%
                                   -----------  -----------  -------  ----------  ----------
EXPENSES:
  COSTS OF SALES. . . . . . . . .  $     5,128          20%  $ 3,690         20%         39%
  SALES AND MARKETING . . . . . .       11,708          46    10,025         54          17

  RESEARCH AND PRODUCT DEVELOPMENT       7,035          28     5,752         31          22
  GENERAL AND ADMINISTRATIVE. . .        4,081          17     3,309         18          23
                                   -----------  -----------  -------  ----------  ----------
    TOTAL EXPENSES. . . . . . . .  $    27,952         111%  $22,776        123%         23%
                                   -----------  -----------  -------  ----------  ----------
</TABLE>

Revenue  increases  were  driven by three primary areas.  These include sales to
global 2000 and government organizations building knowledge management intranets
and  corporate  portals, sales to Internet businesses and web content providers,
and  indirect sales via major integration and distribution partnerships.  In the
coming quarters, a fourth area of growth is anticipated as the Company becomes a
supplier  to  application service providers (ASPs) that are looking to add video
content  management  capabilities  to  their  service  offerings.

The  first  area  of  revenue  growth  came  from  sales  of  RetrievalWare  to
organizations  with large intranets seeking to implement high performance search
and  retrieval  software or replace existing search technology.  Typically these
are  maturing corporate intranet sites dealing with expanding amounts of content
and  multimedia  data types that need to be effectively accessed and utilized by
the organization.  In the quarter ended October 31, 1999, agreements were signed
with Raytheon Systems Company, Acxiom Corporation, GE, MasterCard International,
Autotrol,  Lockheed  Martin,  and the YMCA. For the three months and nine months
ended  October  31,  1999,  intranet  or  knowledge management market sales were
approximately  35%  and  38%  of  total  license  revenues  respectively.

A  second  area of revenue growth came from sales of Excalibur RetrievalWare and
WebExpress  to Internet web portals and e-commerce businesses looking to provide
their  customers with an enhanced search experience.  Typically these are online
businesses  that  place a high value on their content and whose customers demand
the  most  accurate  search results from the greatest amount of information.  In
the  third  quarter, the Company signed a significant licensing and distribution
agreement with found.com, a specialized Internet portal company.  In addition to
a  substantial  initial  cash  payment,  the  Company  is  entitled  to  receive
additional  cash  or  preferred  stock  in  found.com, the value of which is not
currently  determinable  but which could represent significant additional future
revenue  to  the  Company.  There  are  now  approximately  60  companies  using
Excalibur  products  to  power  online  information  services  and  e-commerce
applications.  For  the  three  months  and  nine months ended October 31, 1999,
online  services  and  e-commerce  sales were approximately 36% and 26% of total
license  revenues  respectively.

The  third  area  of growth came from new and existing OEM partners such as NCR,
Lombard,  Techmath,  KDN  and OCS in Europe, and KDN in the Pacific Rim.  During
the  second quarter of this year, the Company completed its delivery of products
to  StorageTek  under the terms of that contract.  Revenue of approximately $5.1
million  dollars was recognized from the StorageTek agreement from its inception
in  July  1998.


                                       12
<PAGE>
The  licensing,  development and distribution agreement with NCR, the largest in
the  history  of  the Company, gives NCR rights to use the Company's products in
NCR  Teradata  warehouse  solutions.  NCR also has rights under the agreement to
resell  the  full  Excalibur  product  line and offer the Company's applications
through its worldwide services and solutions group.  NCR's initial multi-million
dollar  investment  is for licensing, integration and support, which the Company
will  recognize as development milestones are met. In addition, NCR will pay the
Company  ongoing  royalties  for  data  warehouse  products it develops that use
Excalibur  technology.  In the three and nine months ended October 31, 1999, the
Company  recognized  revenues  of  approximately  $1.5 million and $2.8 million,
respectively,  from  the  NCR  agreement,  which  is  being  accounted  for on a
percentage  of  completion  basis.

During  the  third quarter of this year, the Company announced an agreement with
AT&T  that  calls  for  AT&T to integrate Excalibur Screening Room as part of an
intranet-based  video  asset  management  service  that  will  be  sold  by both
Excalibur  and  AT&T.   Similarly, in the second quarter of this year, Excalibur
announced  an  agreement  with INTERVU Corporation that calls for INTERVU to use
Screening  Room to create a service for the management of video content over the
Internet.  These  and  similar  agreements  will  be managed by the newly formed
Excalibur  Media  Services  Group  which  will  develop,  market,  and  sell the
Screening  Room  product  line,  and will focus on establishing the standard for
end-to-end  video  solutions.

The  Company's  indirect  sales  strategy  continues  to  focus on strategic OEM
agreements  that provide potentially significant revenue opportunities.  For the
three  and  nine  months  ended  October  31,  1999,  OEM relationships provided
approximately  29%  and  36%  respectively  of  total  license  revenues.

Maintenance  revenue increased 8% in the third quarter this year to $1.4 million
from  $1.3  million in the third quarter last year.  The increase in maintenance
revenue  is primarily attributable to an increase in the number of RetrievalWare
customers.  Maintenance  revenue  declined  3% for the nine months ended October
31,  1999  compared  to  the  same period last year.  The decrease is due to the
continued  transition  of  the business from EFS to RetrievalWare as well as the
increase in revenue from OEM agreements that do not have significant maintenance
components.

Costs  of  Sales
----------------
Costs of sales increased 17% to $1.8 million in the third quarter of the current
year  from  $1.5  million  in  the  third quarter last year.  For the first nine
months  of  the  current year, costs of sales increased 39% to $5.1 million from
$3.7  million  in  the  first nine months of last year.  The increase is related
primarily  to  the  sales volume increase and greater royalty expense associated
with  new  features  included  in  the  products.  Costs of sales expressed as a
percentage  of  total revenues were 21% in the third quarter of the current year
compared to the 20% in the third quarter last year and 20% of total revenues for
the  nine  months  of  both  the  current  and  prior  years.

Operating  Expenses
-------------------
Sales and marketing expenses increased 21% in the quarter ended October 31, 1999
to  $4.1  million from $3.4 million in the third quarter last year, representing
49%  and 46% of total revenues, respectively.  For the nine months ended October
31,  1999,  sales  and  marketing expenses increased to $11.7 million from $10.0
million  for  the  corresponding  period  last year, representing 46% and 54% of
revenues,  respectively.  The  number  of  employees  in the sales and marketing
departments  has  increased  from  the  prior  year  to  promote and support the
increased sales effort, including the StorageTek product line.  Also, during the
third  quarter  of  the  current  year a new sales office was opened in Germany.

Total research and product development costs increased 5% to $2.2 million in the
third  quarter  of  the  current  year  compared  with $2.1 million in the third
quarter  last  year, representing 26% and 29% of revenues respectively.  For the
nine  months  ended  October  31,  1999,  total  research  and  development cost
increased  22% to $7.0 million from $5.8 million in the first nine months of the
prior  year,  representing  28%  and  31%  of total revenues, respectively.  The
increase  in  absolute  dollars  is  largely  due  to  the creation of the joint
development  lab  with  StorageTek.  Text  and  video  research  and development
expenses also increased in the nine month period of the current year compared to
last  year  as  the  Company  continued  to  invest  in  the  enhancement of its
RetrievalWare and video products.  In the first quarter of the current year, the
Company  released Excalibur Screening Room 2.0, a web-based, end-to-end solution
for real-time capturing, analyzing, cataloguing, browsing, searching, retrieving
and  publishing video, as well as related closed-caption text and metadata, in a
range  of  applications.  During  the  second quarter, the Company announced the
availability  of  RetrievalWare  6.7  and  a  new Power Search Plug-in for Lotus
Notes.   RetrievalWare 6.7 was a major upgrade that will allow end-users a wider
degree  of  flexibility  through automatic categorization, enhanced XML support,
and  expert  directories.  The  Power  Search  Plug-in  for  Lotus  Notes allows
end-users  to  power  search  from  inside  the  Notes  environment  across data
distributed  enterprisewide.


                                       13
<PAGE>
General  and  administrative expenses increased 28% in the third quarter to $1.4
million  from  $1.1 million in the third quarter last year, representing 16% and
15%  of  total revenues, respectively.  For the first nine months of the current
year,  general  and  administrative  expenses increased 23% to $4.1 million from
$3.3  million  in  the  same period last year, representing 17% and 18% of total
revenues,  respectively.  The  increase  in  absolute dollars is attributable to
additional  corporate expenses, including shareholder and legal expense, as well
as  additions  to  bad  debt expense associated with the increased revenues this
fiscal  year.

Net  interest  income  increased slightly to $55,000 in the third quarter of the
current  year  from  $52,000 in the comparable period last year and decreased to
$179,000  for  the  nine  months  ended  October  31,  1999 from $194,000 in the
comparable period last year.  Prior to termination of the distribution agreement
with  the  Company's affiliate ETNV in May 1999, the Company's equity in the net
loss  of  ETNV  was $41,000 for the quarter ended April 30, 1999.  For the three
and  nine  month  periods  ended October 31, 1998, the equity in the net loss of
ETNV  was  $83,000  and  $299,000,  respectively.  The  remaining balance of the
investment in ETNV of $430,000 was written off in the first quarter of this year
as  a  result  of  the  termination  of  the  distribution  agreement with ETNV.


LIQUIDITY  AND  CAPITAL  RESOURCES

In  the  nine  months  ended October 31, 1999, the Company's combined balance of
cash,  cash  equivalents and short term investments increased by $0.8 million to
$6.6  million  as  summarized  below  (in  thousands).  At  October  31,  1999,
investments  consist  of  a  certificate  of  deposit pledged to collateralize a
letter  of  credit.

<TABLE>
<CAPTION>
                October    January
               31, 1999   31, 1999   Change
               ---------  ---------  -------
<S>            <C>        <C>        <C>
Cash and cash
  equivalents  $   6,468  $   5,851  $   617
Short term
  investments        178         --      178
               ---------  ---------  -------
    Total . .  $   6,646  $   5,851  $   795
               =========  =========  =======
</TABLE>

During the nine months ended October 31, 1999, cash of $4.5 million used to fund
operating activities was more than the net loss of $3.0 million primarily due to
an  increase  in accounts receivable of $3.6 million.  Non-cash charges totaling
$1.9  million  included  depreciation  and  amortization of $1.1 million and the
write  off  of the balance of the investment in ETNV totaling $0.4 million.  For
the  nine months ended October 31, 1998, the Company's operating activities used
$2.2 million.  The net loss of $4.4 million was partially offset by depreciation
and  amortization  and  a  decrease  in  accounts  receivable.

The  higher sales volume and increase in the level of accounts receivable during
the  third  quarter  of  the  current  year resulted in the number of days sales
outstanding  ("DSO")  of 103 days at October 31, 1999.  Management believes that
the allowance for doubtful accounts of $625,000 at October 31, 1999 is adequate.

For  the  nine months ended October 31, 1999, the Company's investing activities
used  $0.9 million.  The purchase of a certificate of deposit used $0.2 million,
while  purchases  of equipment and leasehold improvements used $0.7 million.  In
the  first  nine  months of last fiscal year, the Company's investing activities
used  $0.7  million principally due to the purchase of marketable securities and
equipment  totaling  $1.9  million  offset  by the proceeds from the maturity of
certain  of  the  marketable  securities.

Cash provided by financing activities was $6.0 million for the nine months ended
October  31,  1999.  Net  proceeds  of  $4.7  million were provided by a private
replacement  of  500,000  shares  of  common  stock  sold at $10.00 per share to
unaffiliated  accredited  investors,  most  of whom are institutional investors.
Cash  of  $1.2  million was provided from the exercise of employee stock options
and  issuances  of  stock  under the employee stock purchase plan.  For the nine
months  ended October 31, 1998, financing activities provided $3.8 million.  Net
proceeds  of  $3.3  were  provided  by  a private placement of 325,000 shares of
common  stock  at  $10.00  per  share,  while  the exercise of stock options and
issuance of stocks under the employee stock purchase plan provided $0.5 million.


                                       14
<PAGE>
The  Company has available a $3,000,000 line of credit under an agreement with a
bank  which  expires on September 20, 2000.  Up to $250,000 of borrowings may be
in  the  form  of  letters  of  credit.  The line of credit is collateralized by
substantially  all  corporate  assets.  Borrowings under the line of credit bear
interest  at  the lender's prime rate (8.25% at October 31, 1999) plus up to 1%.
The  agreement  requires  the Company to comply with certain financial covenants
that are computed on a monthly basis and prohibits additional borrowings without
the  bank's  approval.  As  of  October 31, 1999, no borrowings were outstanding
under  the  line  of  credit.

The  Company  believes  that its current cash and cash equivalents and its funds
generated  from  operations,  if  any,  will be sufficient to fund the Company's
current  projected cash needs for foreseeable future.  Historically, the Company
has  primarily  used  cash  provided by sales of its common stock to finance its
operations.  If  the  actions taken by management are not effective in achieving
profitable  operating  results,  the  Company may be required to pursue external
sources  of  financing  in  the  future  to  support  its operations and capital
requirements.  There  can  be  no  assurances that external sources of financing
will be available if required, or that such financing will be available on terms
acceptable  to  the  Company.


FACTORS  THAT  MAY  AFFECT  FUTURE  RESULTS

The  Company's  business  environment  is  characterized by intense competition,
rapid  technological  changes, changes in customer requirements and emerging new
market  segments.  Consequently,  to  compete effectively, the Company must make
frequent  new  product  introductions  and  enhancements  while  protecting  its
intellectual  property,  retain its key personnel and deploy sales and marketing
resources  to  take  advantage  of new business opportunities.  Future operating
results  will  be  affected  by the ability of the Company to expand its product
distribution  channels and to manage the expected growth of the Company.  Future
results  may  also  be impacted by the effectiveness of the Company in executing
future  acquisitions  and  integrating the operations of acquired companies with
those  of  the Company.  Failure to meet any of these challenges could adversely
affect  future  operating  results.

The  Company's quarterly operating results have varied substantially in the past
and  are  likely to vary substantially from quarter to quarter in the future due
to  a  variety  of  factors.  In  particular,  the  Company's  period-to-period
operating  results are significantly dependent upon the timing of the closing of
large  license  agreements.  In  this  regard,  the  purchase  of  the Company's
products  can require a significant capital investment from a potential customer
which  the customer generally views as a discretionary cost that can be deferred
or  canceled  due  to  budgetary  or other business reasons and can involve long
sales  cycles  of  six  months  or  more.  Estimating  future  revenues  is also
difficult because the Company ships its products soon after an order is received
and,  as  such does not have a significant backlog.  Thus, quarterly license fee
revenues  are  heavily  dependent  upon  a  limited  number  of orders for large
licenses  received  and  shipped within the same quarter.  Moreover, the Company
has  generally recorded a significant portion of its total quarterly license fee
revenues in the third month of a quarter, with a concentration of these revenues
occurring  in the last half of that third month.  This concentration of revenues
is influenced by customer tendencies to make significant capital expenditures at
the  end  of  a  fiscal  quarter.  The Company expects these revenue patterns to
continue  for  the foreseeable future.  Despite the uncertainties in its revenue
patterns,  the  Company's  operating expenses are based upon anticipated revenue
levels  and  such  expenses  are  incurred  on  an  approximately  ratable basis
throughout  a  quarter.  As  a  result,  if  expected  revenues  are deferred or
otherwise  not  realized  in  a  quarter for any reason, the Company's business,
operating  results  and  financial  condition  would  be  materially  adversely
affected.

As  of  January  31,  1999,  the  Company  had  net operating loss carryforwards
("NOLs") of approximately $68 million.  The deferred tax assets representing the
benefits of the NOLs have been offset completely by a valuation allowance due to
the  Company's  lack  of an earnings history. The Company incurred a net loss of
$3.0  million  for  the  nine  months  ended  October 31, 1999.  The accumulated
deficit  of  the Company at October 31, 1999 was $58.8 million.  The realization
of  the benefits of the NOLs is dependent on sufficient taxable income in future
fiscal  years.  Lack  of  future  earnings,  or a change in the ownership of the
Company,  could  adversely  affect  the  Company's  ability to utilize the NOLs.
Further,  because there was a change in the ownership of ConQuest in fiscal year
1996,  the  Company's  ability  to  utilize  NOLs  relating  to  ConQuest  of
approximately  $3.2  million may be limited.  Despite the NOL carryforwards, the
Company  may have income tax liability in future years due to the application of
the  alternative  minimum  tax  rules  of  the  Internal  Revenue  Code.

The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  and  disclosure of
contingent  assets  and  liabilities at the date of the financial statements and
the  reported  amounts  of  revenues  and  expenses during the reporting period.
Actual  results  could  differ  from  those  estimates.


                                       15
<PAGE>
The Company believes that inflation has not had a material effect on the results
of  its  operations  to  date.

YEAR  2000
----------

On  July  29,  1998,  the  Securities  and Exchange Commission issued additional
guidance  on  disclosures  that public companies should make related to the Year
2000.  The  new release was effective for the Company's October 31, 1998 interim
reporting.  In  addition  to  historical  information,  the  disclosure contains
forward-looking statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995.  Such statements are based
on  management's  current  expectations  and are subject to a number of factors,
risks  and  uncertainties  which could cause actual results to differ materially
from  those  described  in  the  forward-looking  statements.

State  of  Readiness
--------------------
The  Company  currently  has  facilities  in  six  locations,  each  of which is
responsible for its own development information technology systems, herein known
as  "Non-IT  systems",  while  corporate  information technology systems, herein
known  as  "IT  systems",  are  managed  by the Company's Management Information
Systems  department  ("MIS").  For  the  purposes  of  Year 2000 compliance, the
corporate  MIS  department  is  managing  the task of verifying that all Company
systems  are  date  compliant, including reviewing and analyzing all development
platforms,  not directly under MIS control.  This umbrella process was initiated
in order to ensure the Company would be able to continue developing its products
without  disruption after January 1, 2000.  To ensure that Non-IT and IT systems
are,  or  will  be,  compliant;  the Company has undertaken a full survey of all
systems within the Company at all locations. This survey covers all user desktop
and laptop systems; all IT systems, servers, and operating systems; all critical
applications,  including  financial,  accounting,  corporate  database,  human
resources and administrative systems; and all Non-IT systems, servers, operating
systems  and third party coding products.  The majority of the Company's efforts
regarding  Year  2000  readiness  are  associated  with internal data processing
systems.  In  all  material  respects,  products manufactured by the Company are
already  Year  2000  compliant,  although  the  individual  platforms upon which
product(s) are developed are still under review and analysis.  Due to the recent
upgrade  of  many of the Company's IT systems, the majority of these systems are
either  currently  prepared for Year 2000 in all material respects or are in the
process  of  being  upgraded to standardized systems and applications which will
meet  this  objective.  Most  IT  systems and applications which are deemed Year
2000 compliant by the software vendors are tested by the Company to verify these
claims.  At  this  time,  critical  financial, accounting and corporate database
systems have been tested, and Non-IT systems are in the process of being tested.
These  testing  proportions are related to both the magnitude and perceived risk
of system non-compliance and future testing will be scheduled in accordance with
these criteria.  For the remaining IT systems and the Non-IT systems, plans with
critical  dates are being developed to monitor the Company's progress toward the
overall  objective of Year 2000 compliance.  The Company's anticipates readiness
for  Year  2000  by  the  end  of  December  1999.

Costs  to  Address  Year  2000  Issues
--------------------------------------
Historical  and  estimated  costs  of  remediation  to  this point have not been
material.  The  Company has resolved IT systems compliance issues through normal
replacement  and  upgrades of software.  Non-IT systems are being addressed on a
case  by  case  basis  through  the  use of existing MIS resources.  Most of the
Non-IT systems remedial activity to this point has involved applying low or zero
cost  patches to operating systems and platforms using existing MIS resources to
achieve a date compliance level.  The Company will continue to monitor Year 2000
remediation  costs  and will update its estimate of future remediation costs, if
any,  as  it  completes  its  Non-IT  systems  analysis.

Key  Considerations  and  Contingency  Plans
--------------------------------------------
At  the  current  time,  the Company's Year 2000 readiness plan anticipates that
both  IT  and Non-IT systems and applications will be Year 2000 compliant in all
material  respects by the end of December 1999.  This assessment is based on the
Company's  analysis  to  date  and detailed findings at its Vienna, Virginia and
Columbia,  Maryland  locations.  There can be no assurance, however, of complete
compliance  based  on  the  status  to  date.  However, since the Company is not
dependent  upon  any single IT or Non-IT system for the majority of its revenue,
it is unlikely that any single system will have an adverse effect on the Company
as  a  whole.  Contingency plans will involve the procurement of newer platforms
for  Non-IT  systems  and  the  temporary  use  of  standardized  commercial
off-the-shelf  replacement  modules  for IT applications and business functions.
While  at  present  there  are no indications that any contingency plans will be
necessary  or that there will be revenue disruptions, there can be no assurances
that  this  will  necessarily  be  the  case.


                                       16
<PAGE>
EURO  CONVERSION
----------------

On January 1, 1999, the exchange rates of eleven countries (Germany, France, the
Netherlands,  Austria,  Italy,  Spain,  Finland,  Ireland, Belgium Portugal, and
Luxembourg)  were  fixed  amongst  one  another and became the currencies of the
EURO.  The  currencies  of the eleven countries will remain in circulation until
mid-2002.  The EURO currency will be introduced on January 1, 2002.  The Company
does  not expect future balance sheets and statements of earnings and cash flows
to  be  materially  impacted  by  the  EURO  Conversion.


NEW  ACCOUNTING  PRONOUNCEMENTS

In  June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133,  "Accounting  for  Derivative  Instruments  and  Hedging Activities."  This
statement  establishes  accounting  and reporting standards requiring that every
derivative  instrument,  including  certain  derivative  instruments embedded in
other  contracts,  be  recorded  in  the  balance  sheet  as  either an asset or
liability  measured at its fair value.  The statement also requires that changes
in  the  derivative's fair value be recognized in earnings unless specific hedge
accounting  criteria are met.  The Company believes the adoption of SFAS No. 133
will  not  have  a  material  effect  on  the  financial  statements.

The  American  Institute of Certified Public Accountants has issued Statement of
Position  98-9,  "Modification  of  SOP-97-2, Software Revenue Recognition, With
Respect  to  Certain  Transactions."  SOP  98-9  is  effective  for  revenue
transactions  entered  into  in the Company's fiscal year 2001.  The Company has
evaluated SOP 98-9 and does not believe its adoption will have a material effect
on  the  financial  statements.


MARKET  RISK

The Company's market risk is principally confined to changes in foreign currency
exchange  rates  and  potentially  adverse  effects of differing tax structures.
International  sales  are  made  mostly  from  ETIL, the Company's foreign sales
subsidiary,  and  are  typically  denominated  in British pounds.  The Company's
exposure  to foreign exchange rate fluctuations arises in part from intercompany
accounts  in  which  royalties on ETIL sales are charged to ETIL and recorded as
intercompany  receivables  on the books of the U.S. parent company.  The Company
is  also  exposed to foreign exchange rate fluctuations as the financial results
of  ETIL  are  translated into U.S. dollars in consolidation.  As exchange rates
vary,  those  results  when  translated may vary from expectations and adversely
impact  overall  expected  profitability.


                                       17
<PAGE>
                           PART II-- OTHER INFORMATION


Item 1.  Legal Proceedings                                  None.
-------


Item 2.  Changes in Securities                              None.
-------


Item 3.  Defaults upon Senior Securities                    None.
-------


Item 4.  Submission of Matters to Vote of Security Holders  None.
-------


         The  1999  Annual  Meeting  of  Shareholders was held August 24, 1999.

         a)  The following individuals were elected to serve as the Board of
             Directors for  the  terms  expiring  at  the  2000 Annual meeting:

                                Number of Shares Voted
                                ----------------------

                                 For         Withheld
                                 ----------  --------
         Donald R. Keough        11,949,763   183,270
         Patrick C. Condo        11,949,865   183,168
         Richard M. Crooks, Jr.  12,048,961    84,072
         John S. Hendricks       12,048,969    84,064
         W. Frank King III       11,960,443   172,590
         John G. McMillian       11,960,933   172,100
         Philip J. O'Reilly      12,048,749    84,284
         Harry C. Payne          11,960,475   172,558


         b)  The shareholders voted 10,070,127 shares in the affirmative and
             1,994,057 in  the  negative to approve the Company's 1999 stock
             option  plan.


Item 5.  Other  Information                                 None.
-------


Item 6.  Exhibits  and  Reports  on  Form  8-K              None.
-------


                                       18
<PAGE>
                                   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.

                       EXCALIBUR TECHNOLOGIES CORPORATION
                       ----------------------------------



December  13,  1999          By:  /s/  Patrick  C.  Condo
                                  -----------------------
                                  Patrick  C.  Condo
                                  President and Chief Executive Officer
                                  (Principal  Executive  Officer)


December  13,  1999          By:  /s/  James  H.  Buchanan
                                  ------------------------
                                  James  H.  Buchanan
                                  Chief  Financial  Officer
                                  (Principal Financial and Accounting Officer)


                                       19
<PAGE>