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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                            ------------------------
                                   FORM 10-K

(MARK ONE)

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   /X/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
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                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
                                       OR

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<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
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        FOR THE TRANSITION PERIOD FROM ______________ TO ______________.

                      COMMISSION FILE NUMBER
                            ------------------------
                               NBC INTERNET, INC.

             (Exact name of Registrant as specified in its charter)

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<S>                                            <C>
               DELAWARE                                     94-3333463
       (State of incorporation)                (I.R.S. Employer Identification No.)
</TABLE>

                                225 BUSH STREET
                        SAN FRANCISCO, CALIFORNIA 94104
                                 (415) 375-5000

         (Address and Telephone Number of principal executive offices)

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

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

                        COMMON STOCK, $0.0001 PAR VALUE
                                   (CLASS A)

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

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

    Based on the closing sale price of the Class A common stock on the Nasdaq
National Market System on February 29, 2000, the aggregate market value of the
voting stock held by non-affiliates of the Registrant was $1,168,483,192. Shares
of Class A common stock held by each officer and director and by each person
known by the Company to own 5% or more of the outstanding Class A common stock
have been excluded in that such persons may be deemed to be affiliates. This
determination of affiliate status is not necessarily a conclusive determination
for other purposes.

    The number of shares outstanding of Registrant's Class A common stock,
$0.0001 par value, was 31,778,622 at February 29, 2000. The number of shares
outstanding of Registrant's Class B common stock, $0.0001 par value, was
24,550,708 at February 29, 2000.

                      DOCUMENTS INCORPORATED BY REFERENCE

    Certain information required in Part III hereto is incorporated by reference
to the Proxy Statement for the Registrant's 2000 Annual Meeting of Stockholders
to be filed with the Securities and Exchange Commission pursuant to
Regulation 14A not later than 120 days after the end of the fiscal year covered
by this Form 10-K.

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                               NBC INTERNET, INC.

                                   FORM 10-K

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                               TABLE OF CONTENTS

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                                PART I

Item 1.  Business...........................................      1

Item 2.  Properties.........................................     16

Item 3.  Legal Proceedings..................................     16

Item 4.  Submission of Matters to a Vote of Security
  Holders...................................................     18

                               PART II

Item 5.  Market Price of and Dividends on the Registrant's
         Common Equity and Related Stockholder Matters......     19

Item 6.  Selected Financial Data............................     21

Item 7.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations................     22

Item 7A. Quantitative and Qualitative Disclosures About
         Market Risk........................................     49

Item 8.  Financial Statements and Supplementary Data........     49

Item 9.  Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure................     50

                               PART III

Item 10.  Directors and Executive Officers of the
  Registrant................................................     50

Item 11.  Executive Compensation............................     50

Item 12.  Security Ownership of Certain Beneficial Owners
  and Management............................................     50

Item 13.  Certain Relationships and Related Transactions....     50

                               PART IV

Item 14.  Exhibits, Financial Statement Schedules and
  Reports on Form 8-K.......................................     50

Signatures..................................................     54

Financial Statements........................................    F-1
</TABLE>
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    THIS REPORT ON FORM 10-K, INCLUDING THE DISCUSSIONS IN PART I, ITEM 1
"BUSINESS" AND PART II, ITEM 7 "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION" CONTAINS FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH FORWARD-LOOKING STATEMENTS
INCLUDE, AMONG OTHERS, THOSE STATEMENTS INCLUDING THE WORDS "EXPECTS",
"ANTICIPATES", "INTENDS", "BELIEVES" AND SIMILAR LANGUAGE. NBCI'S ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THE RESULTS ANTICIPATED IN THESE FORWARD LOOKING
STATEMENTS AS A RESULT OF A VARIETY OF FACTORS, INCLUDING THOSE SET FORTH IN
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--FACTORS AFFECTING OPERATING RESULTS."

                                     PART 1

ITEM 1.  BUSINESS

OVERVIEW

    We are an integrated Internet media company that combines portal, community,
online and on-air advertising, and e-commerce services designed to deliver a
comprehensive, next-generation online experience to a global audience. According
to Media Metrix reports, our online properties ranked in the top ten of the most
visited sites on the Internet in December 1999 with over 14.9 million unique
visitors and an aggregate Internet reach among home and work users of 22.9%. We
believe that we deliver to our customers enhanced branded services and content
and that we place a growing emphasis on offering services that take advantage of
Internet ubiquity and broadband access. We integrate fast-growing and premier
Web site assets, such as Snap.com, Xoom.com, NBCi.com, NBC.com, VideoSeeker.com
and NBC-IN.com and content from AccessHollywood.com. We combine the NBC media
brand and related content with the complementary portal and navigation services
of our Snap.com Web site and community and direct e-commerce services of our
Xoom.com Web site to deliver a comprehensive, entertaining and compelling
Internet experience to a broad audience. We enable our advertising customers to
purchase integrated online and on-air advertising. We believe our core services
will provide the foundation for a next-generation media company whose e-commerce
and community orientation will reach a diverse user base through a variety of
interactive media, including broadcast and cable television, radio and the
Internet.

    We believe that our services create an environment that attracts users and
encourages both longer and repeat visits as well as customer loyalty, resulting
in a large base of registered members. These services are focused on generating
both advertising and e-commerce revenue by allowing advertisers and merchants to
reach a broad and segmented audience of Internet users. Our portfolio of
content, community and e-commerce services include:

    - ENTERTAINMENT SERVICES: free rich media and broadband content,
      user-generated content, chat rooms and online greeting cards;

    - INFORMATION SERVICES: free directory, global resources and information,
      local and personalized content and personal finance information;

    - UTILITY SERVICES: free e-mail, search engine, Web development tools, home
      pages, digital user storage and software libraries; and

    - E-COMMERCE SERVICES: business-to-consumer services and
      business-to-business tools, such as auctions, price comparison shopping
      engine, database marketing, shopping directory, digital wallet, business
      portal and business directory.

    We believe our ability to aggregate information about our consumers'
interests across these online services, in combination with our ability to
coordinate on-air advertising with our media partners, will provide
cross-selling and promotional opportunities that distinguish us from most of our
competitors in the Internet industry. In addition, we have the ability to target
customers with advertising and e-commerce opportunities using demographic data
and information on buying habits, services used and lifestyle

                                       1
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interests. This information is collected on a permission basis, and we use it to
assist advertisers in focusing and monitoring the effectiveness of their
presentations, as well as to offer relevant e-commerce opportunities. We
facilitate these transactions through our direct e-commerce platform and
proprietary database management system.

    The total number of registered users on our various properties was over
16 million as of December 31, 1999, with new members registering at the rate of
approximately 33,000 per day during December 1999. In December 1999, our
Internet properties had over 917 million collective page views. From these users
we have generated $20.0 million in revenues from advertising and $15.6 million
in revenues from e-commerce for the year ended December 31, 1999. These revenues
do not include the revenues generated by Snap.com, NBCi.com, Videoseeker.com and
NBC-IN.com for the period January 1 through November 30, 1999.

RECENT EVENTS

    On November 29, 1999 and November 30, 1999, the transactions contemplated by
the agreement and plan of contribution and merger, dated as of May 9, 1999, as
amended on October 20, 1999, among us, CNET, Inc., Xoom.com, Xenon 3, Inc. and
Snap! LLC and by the second amended and restated agreement and plan of
contribution, investment and merger dated as of July 8, 1999, as amended on
October 20, 1999, among us, NBC, GE Investments Subsidiary, Inc., Neon Media
Corporation and Xoom.com were consummated. As a result of these transactions,
Xoom.com and Snap became our wholly-owned subsidiaries and we became the owners
of the businesses related to NBC.com, NBC-IN.com and VideoSeeker.com and of a
10% ownership interest in CNBC.com LLC.

    On January 12, 2000 we entered into a joint venture agreement with
Asiacontent.com Ltd., a developer of Internet content, advertising and commerce
services in the Asian market. The joint venture is intended to develop and
launch comprehensive, localized Internet community, content, portal and shopping
services in Korea, Hong Kong, Singapore, Malaysia and Taiwan. These new Web
sites will combine our content and technology with localized content and
services developed by Asiacontent.com and other local providers to offer users,
partners and advertisers in the Asian markets with high quality Internet
services focused on local languages. In February 2000, we invested approximately
$10.0 million in Asiacontent.com.

    On February 3, 2000, we completed a follow-on offering of our Class A common
stock and issued 4,600,000 shares at a price of $81.38 per share. Of the
4,600,000 shares of Class A common stock sold in the offering, 3,650,000 were
sold by us and 950,000 shares of Class A common stock were sold by existing
stockholders. The Company received net proceeds from the offering of
approximately $280.1 million. Concurrent with our follow-on offering there was
also a public offering of hybrid equity securities known as Trust Automatic
Common Exchange Securities, or TRACES, by the NBCi Automatic Common Exchange
Securities Trust which issued 1,250,000 of these securities to the public.

    We completed the acquisition of AllBusiness.com, Inc., a privately held
company with approximately 120 employees active in the business-to-business
field as of March 7, 2000. The transaction was a stock for stock merger valued
at approximately $225 million and was accounted for as a purchase during the
first quarter of 2000. In addition, we have assumed the outstanding options of
AllBusiness.com. AllBusiness.com's Web site is designed to offer practical
solutions to the everyday challenges of starting, managing and growing a
business and provides entrepreneurs and small businesses with a single point of
access for resources that enhance operations, solve problems and save money. We
believe AllBusiness.com will provide a broad platform from which we can develop
and integrate our business-to-business services and products.

                                       2
<PAGE>
STRATEGY

    By providing a broad array of professionally created and user-generated
content in a single service, we are developing leading integrated media
properties on the Internet. We have been upgrading and expanding our portfolio
of services to create a more entertaining and dynamic online experience. We
believe this focus will enable us to grow our registered user base and increase
the level of Internet traffic on our properties. We also capture relevant data
on our users to enhance our proprietary database of user demographics and to
provide them with more personalized services. A key element of our business
strategy is the development and introduction of new services designed for
specific user groups with particular demographic characteristics and geographic
concentration. To accomplish these goals, we have put into place and continue to
use the following strategies:

    - building and enhancing our core brands;

    - increasing content and service offerings to grow our user base;

    - creating a valuable advertising and e-commerce franchise;

    - aggregating users around selected vertical content areas;

    - leading next-generation broadband and wireless initiatives;

    - building our business-to-business offerings;

    - accelerating pursuit of international opportunities; and

    - continuing to develop or acquire leading-edge targeting technology and
      software.

    Under our brand integration and license agreement with NBC, we are the
exclusive vehicle for NBC to operate a general portal service, a broad-based
community service and a direct e-commerce service. Our NBC relationship offers
us opportunities to access content and extend our brand awareness in defining
the next-generation Internet user experience. We leverage NBC's extensive
advertising relationships to create ways for advertisers to reach consumers by
capitalizing on synergies between on-air and online media. We also have entered
into a multi-year television network advertising agreement with NBC enabling us
to market our integrated services to viewers of the NBC television network.

    This relationship combined with our offering of free services and content,
as well as our large and diverse range of active communities, encourages users
of our Web sites to become members. Finally, with our proprietary consumer
database of purchasing information, we offer advertisers and e-commerce partners
the ability to deliver highly targeted messages and product offerings to our
members.

    We have been growing our e-commerce activities through investments,
strategic partnerships and complementary acquisitions. We have been building our
business-to-consumer e-commerce platform by aggregating buyers, creating
targeted promotional opportunities for high quality products and services, and
enhancing the user experience to encourage completion of online transactions.
Similarly, we have been developing our business-to-business e-commerce platform
by leveraging our auction, business portal, business directory and database
services. Through our acquisition of AllBusiness.com, we offer a small business
portal with which we can provide a broad platform from which we can develop and
integrate our business-to-business services and products.

    We will continue to derive revenue from the sale of integrated media and
e-commerce services. Our integrated media services include the sale of
co-branded Internet, television and radio promotions. We also earn revenue from
e-commerce sales, which mainly consist of direct marketing via the Internet
through our e-list management and database marketing division.

                                       3
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OUR INTERNET ASSETS, PRODUCTS AND SERVICES

    We provide a comprehensive and compelling online experience to users
worldwide via our powerful branded Web properties that incorporate
entertainment, information, utility and e-commerce services delivered across all
bandwidths. Our select portfolio of online properties is comprised of highly
popular, content-rich sites and services geared to specific audiences with
various interests and needs.

    OUR INTERNET ASSETS

    SNAP.COM.  Snap is currently NBCi's Internet portal service and flagship
    consumer brand. Snap offers efficient, high-quality Internet search results,
    comprehensive directory listings, proprietary Resource Centers and content
    from hundreds of leading Web publishers.

    XOOM.COM.  Xoom.com is a leading online community service that provides our
    members with services such as home page development tools and digital
    storage space. Members also receive targeted product and service offerings
    from partner merchants and advertisers.

    NBCI.COM.  NBCi.com is our broadband Internet portal service. NBCi.com uses
    innovative broadband technology to optimize users' access to rapidly
    evolving forms of content, including video, audio, animation and gaming, to
    create a richer Internet experience.

    NBC.COM.  NBC.com is a full-scale online offering from the NBC Television
    Network, featuring original online programming, comprehensive backgrounds on
    the network's shows and stars, interactive promotional campaigns, and
    innovative online product offerings linked directly to on-air programs.
    Visitors to the site will find a growing lineup of exclusive video content,
    show-related games and downloads, exclusive Web content designed to
    complement and extend NBC shows and network branding into the online space.

    NBC-IN.COM.  NBC-IN.com is a resource for valuable local information on the
    Web, providing access to local content via the Web sites of over 100 local
    NBC television affiliates nationwide. Users can find promotions, contests
    and coupons, and various other local information, such as job and real
    estate listings, eateries and television programming.

    VIDEOSEEKER.COM.  VideoSeeker.com is a leading-edge video resource on the
    Internet-a one-stop, on-demand service featuring popular video content from
    NBC and third party programmers. VideoSeeker is building a comprehensive
    video directory on the Web, with popular video content channels and
    user-friendly search capabilities.

                                       4
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PRODUCTS AND SERVICES

    The following chart illustrates the categories and services that we offer
through our online properties and media partnerships:

<TABLE>
<CAPTION>
CATEGORIES                                                  SERVICES
----------                                  ----------------------------------------
<S>                                         <C>
Entertainment Services....................  Free rich media and broadband content
                                            User-generated content
                                            Chat rooms
                                            Online greeting cards

Information Services......................  Free directory
                                            Global resources and information
                                            Local and personalized content
                                            Personal finance information

Utility Services..........................  E-mail
                                            Search engine
                                            Web development tools
                                            Home pages
                                            Digital user storage and software
                                            libraries

Advertising Services......................  Online advertising
                                            Television advertising
                                            Radio advertising

E-Commerce Services.......................  Auctions
                                            Price comparison shopping engine
                                            Database marketing
                                            Shopping directory
                                            Business portal
                                            Business directory
</TABLE>

    ENTERTAINMENT SERVICES

    FREE RICH MEDIA AND BROADBAND CONTENT.  Through NBC.com we offer information
and promotion for NBC on-air broadcasts as well as original show extensions
developed specifically for Internet users. We provide show descriptions, episode
updates, actor biographies, schedule information, "backstage tours", online-only
interviews, online show "spin-offs", Internet-only segments and program trivia
for NBC entertainment programming. We also adapt program content owned by or
licensed to NBC for interactive uses, such as games and photo galleries. Through
AccessHollywood.com, we leverage the popularity of an on-air show to attract
online users interested in up-to-date entertainment industry news and online
extensions of the show. Our Videoseeker.com service is an innovative, on-demand
video service with search capability that provides access to various NBC-related
and third party video content.

    To provide a more entertaining and dynamic online experience, we have
developed several initiatives for an enriched offering of our services to
broadband-enabled Internet users. Our Web site, NBCi.com, launched in
February 2000, uses innovative broadband technology to optimize users' access to
rapidly-evolving forms of content, including video, audio, animation and gaming,
to create a richer Internet experience. This service enhances and supports the
core functionality of Snap.com by offering multimedia content and navigation
services to the expanding number of users with high-speed Internet access. In
addition, because NBCi.com is positioned as an alternative rather than a
separate product experience, users can switch easily between Snap.com and
NBCi.com while keeping all of their personalization and membership settings
intact.

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    Through our relationship with Telocity, Inc., we expect to offer a
co-branded high-speed Internet access service to consumers by the third quarter
of 2000. Through this co-branded service, we expect to provide entertainment,
shopping, games, search applications and other utility services designed for
broadband users.

    USER-GENERATED CONTENT, CHAT ROOMS AND ONLINE GREETING CARDS.  Our members
can participate in one or more of over 200 topical communities where they can
exchange ideas and information. Members may also enter specialized forums, such
as Investor Place, Women's Circle or Health & Fitness, where they can gain
access to professional content and special product and service offers available
only on our Web sites. We also generate significant user created content by
offering members the tools necessary to create their own personalized Web sites
and then provide the digital storage space to add their sites to the Internet.
Our community services include user created content, chat, bulletin boards,
electronic newsletters, online greeting cards, games and other services, which
enable us to attract and retain customers. These services help us build a
long-term relationship with our visitors and members. By serving as a virtual
meeting ground for many people, we continue to broaden our reach and increase
the opportunities for our advertisers and e-commerce partners.

    INFORMATION SERVICES

    FREE DIRECTORY.  The Snap Directory is a hierarchical listing of Web pages
that have been selected and summarized by us into 22 topical categories. The
Snap Directory enables a user to click on an entry and look through a hierarchy
of relevant Internet sites for various areas of interest. Our directory assists
the user by providing abstracts for each entry. The Snap Directory is hand built
by our editors, and we believe that searches through our directory return more
accurate results than searches through most of our competitors' mechanically
compiled directories. As of December 31, 1999, our directory contained over
660,000 entries.

    Our LiveDirectory is a unique service that allows our members to submit
their Web sites and any other Web sites to our search and navigation service
quickly and easily. The LiveDirectory combines relevancy algorithms licensed
from GlobalBrain.net, Inc. with our search engine technology and enables our
members to monitor when updates to their submitted Web sites occur and to
determine the popularity of such Web sites. The LiveDirectory is continually
updated by the addition of new sites by submitting members and ensures that our
collection of searchable Web sites remains up to date. The LiveDirectory is
created and maintained through a combination of GlobalBrain.net, Inc.'s
proprietary popularity ranking process and by our editors, who choose the most
popular and significant Web sites included in the LiveDirectory for inclusion in
the Snap Directory. We also own a 10% interest in GlobalBrain.net, Inc.

    GLOBAL RESOURCES AND INFORMATION.  We maintain direct links to MSNBC News,
MSNBC Sports and CNBC.com, which provide users with access to breaking news,
worldwide sports and financial information, respectively. Content from national
news magazine shows such as Dateline NBC is available via links to MSNBC.com,
and users can link to NBC's site devoted to the Olympics through NBC.com. We
also offer a platform to gather information from and interact with national and
international government agencies.

    LOCAL AND PERSONALIZED CONTENT.  The NBC-IN.com Web site serves as a portal
to a network of local news and information Web sites developed in collaboration
with 104 NBC-owned and NBC-affiliated television stations throughout the United
States. When a user identifies a particular city of interest, NBC-IN.com enables
the user to connect with the Web site of the local NBC-owned or NBC-affiliated
station in that city. On the local station Web sites connected by NBC-IN.com,
users can access news, sports and weather from MSNBC and, in the case of NBC
affiliates, the local station itself. Users can also access services, such as
job searching, local advertising for real estate and automobiles, restaurant
reviews and telephone directories customized for the relevant geographic area.
Information from local government agencies is also available through our Web
sites. Most of the content appearing on the NBC-IN.com Web sites is obtained
from unaffiliated content providers, often through exclusive relationships with

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NBC-IN.com. The NBC-IN.com network of station Web sites offers advertisers a
city-by-city advertising platform tailored to local needs with on-air and online
cross-promotion, anchored by the NBC brand. We provide a portion of each local
site's content through strategic relationships with Web sites, such as
Realtor.com, Auto-by-Tel and CareerBuilder. These content providers pay a fee to
NBC-IN.com to furnish search or other functionality in a particular category
such as auto and real estate sales, apartment rentals, telephone directory
services and job searching services for the geographic areas covered by each
site throughout the NBC-IN.com site network. As subsidiaries of NBC, the
13 stations owned by NBC have historically included all content furnished by
NBC-IN.com on their Web sites, but they are not presently under a written
obligation to do so.

    In addition to providing users local information through NBC-IN.com, we have
developed a number of personalization tools, integrated in the MySnap service,
that allow users to compile and format Internet content and advertising
information according to their specific interests. MySnap allows users to create
permanent filters for continually changing Internet-based information, such as
stock quotes, weather and sports scores, compile linked news headlines in
selected categories, and access personalized locally-relevant information, such
as movie and television listings, simply by entering a zip code. MySnap also
offers e-mail and a reminder feature with access to value-added Internet
content. MySnap seeks to complement our comprehensive search functionality by
positioning Snap.com and NBCi.com as a single source for users' recurring
information needs.

    UTILITY SERVICES

    E-MAIL.  We offer members free e-mail accounts that allow them to check
e-mail from anywhere at any time. The sophisticated e-mail service includes a
filter that enables the user to easily choose to receive only certain types of
e-mails.

    SEARCH ENGINE.  Our search capability allows users to execute query-based
searches of the Web and other premium content databases or the Snap Directory. A
search can be effected using simple keywords, phrases or full text natural
language searches. In addition to its general search function, Snap.com also
offers users a more focused or "search only" service that allows for special
search expressions. Our exclusive license agreement with GlobalBrain.net for its
proprietary search technology enables our search engine to rank sites by user
preferences and formulate a search response that reflects the popularity and
relevance of the sites to which the user is referred. The GlobalBrain.net
technology also will enable the customization of search results for different
user groups, by reflecting differences in preferences based on country of
residence, occupation, age or other variables we choose to set.

    We also have created Snap "Guides to" resource centers to provide a
comprehensive, targeted first stop for searches in popular areas of interest on
Snap.com. Snap's resource centers serve as "mini-portals", delivering
intelligently compiled search results in over 500 niche areas of interest. In
addition, because our product managers can build resource centers and assemble
relevant content quickly, we have used resource centers to build search
capability opportunistically around topics of current interest as well as
contextual programming developed through our strategic relationship with NBC.
Resource centers provide full-service access to information sources as well as
to e-commerce opportunities, enabling users to commence and complete
transactions, from locating a source of information about a particular service
or product, to identifying appropriate providers and finally to consummating a
transaction for the specific product or service needed.

    WEB DEVELOPMENT TOOLS, HOME PAGES, DIGITAL STORAGE AND SOFTWARE
LIBRARIES.  We offer Web development tools that allow our users to build
personal Web sites complete with the latest in Web page features, such as
multimedia capabilities, counters that track and gather useful data about Web
site visitors, clip art and streaming video. In addition to providing tools to
build the Web sites, we also provide the digital storage that allows our members
to add their sites to the Internet. Members can also set up direct links to
their personal Web sites, allowing them to take advantage of our services
without the need to access our

                                       7
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Web site directly. We also offer many free downloadable software choices from
our extensive free software library. Our members rely on us to provide them with
continually updated and expanded software choices that further enhance their
online experience. These services strengthen our relationship with our members
and incentivize them to provide the valuable personal information that our
advertisers and e-commerce partners use to offer our members targeted products
and services.

    ADVERTISING SERVICES

    We offer our advertising customers a variety of advertising opportunities on
our Web sites. Further, we have entered into agreements with NBC and Clear
Channel Broadcasting, Inc. to purchase advertising on the NBC television
properties and Clear Channel's radio stations. Through our access to this on-air
media, we offer our advertising customers an opportunity to purchase integrated
and co-branded online and on-air advertising.

    We have a direct sales organization, located in New York and San Francisco,
which is dedicated to developing and maintaining close relationships with top
advertisers and leading advertising agencies nationwide. As of December 31,
1999, we had 74 employees in our direct sales organization. Our sales
organization is focused on selling advertising on all of our online properties,
as well as co-branded advertisements on television and radio. Our sales
organization consults regularly with advertisers and agencies on design and
placement of their Web-based and on-air advertising, provides advertisers with
advertising measurement analysis and focuses on providing a high level of
customer service and satisfaction.

    Advertisers and advertising agencies typically enter into short-term
agreements, of an average of one to two months in duration, under which they
receive a guaranteed number of impressions, i.e., the number of times an
advertisement is seen by a user, and in specific cases, a guaranteed number of
on-air television and radio advertisements for a fixed fee. We have experienced,
and expect to continue to experience, a variable renewal rate for our
advertising contracts. Advertising on our Web sites currently consists primarily
of banner-style advertisements that are prominently displayed at the top of
pages on a rotating basis throughout our Web site. From each banner
advertisement, viewers can directly access the advertiser's own Web site through
a hyperlink, thus providing the advertiser an opportunity to directly interact
with an interested customer.

    We have signed a number of long-term sponsorships of a minimum of six months
duration as a result of the growth in reach of our Web sites and the desire of
advertisers to reach our membership and user base. Such sponsorships generally
provide for specific placement on our online properties and the delivery of a
minimum number of impressions over the course of the contract. We have signed
such agreements with Job Options.com, LLC and NECX Direct LLC, among others.

    During the year ended December 31, 1999, we had approximately 642
advertisers on our Web sites. For the year ended December 31, 1999, the five
largest advertising customers, JobOptions.com, BuyItNow.com, LLC, NECX, Snap.com
and Beyond.com, accounted for approximately 17% of advertising revenue
(approximately 9% of total net revenue). The following is a list of our top 15
advertising customers by net revenue for the year ended December 31, 1999:

<TABLE>
<S>                            <C>                       <C>
About.com/The                  eBay                      Prize Point
Mining Co.                     Hypernix-Gooey            Snap.com
Beyond.com                     Icom                      Teknosurf
BuyItNow.com, LLC              JobOptions.com, LLC       VR Services
CNET                           NECX Direct LLC           Zing
Cyberworld Group
</TABLE>

                                       8
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    E-COMMERCE SERVICES

    AUCTIONS.  We offer our individual and business members the ability to sell
and buy goods via online auctions. Our service permits member sellers to list
items for sale, member buyers to bid on items of interest and users to browse
through listed items in a fully-automated, topically-arranged, intuitive and
easy-to-use online service that is available 24 hours a day, seven days a week.
Our basic and advanced search capabilities are available for users of the
auction service to search for and identify items of interest. Non-member sellers
pay a nominal placement fee for an item based on the seller's minimum price for
the item. At the end of the auction period, if a bid exceeds the seller's
minimum price, we automatically notify the buyer and seller via email and then
the buyer and seller consummate the transaction independently of us. Buyers are
not charged for making bids or purchases through us. At no point during the
process do we take possession of either the item being sold or the buyer's
payment for the item. Following completion of a transaction, each user is able
to submit compliments or criticism to the trading profile of the seller. As we
continue to develop and refine our auction sites, we expect to build in many
more modern features that are a natural product extension, for example "group"
buying.

    PRICE COMPARISON SHOPPING ENGINE.  To assist members in their online
purchases, we provide an online comparison shopping guide and purchasing
service. This service allows consumers to easily and quickly shop online for the
products they want at prices they desire. This technology also enables us to
collect valuable e-commerce related data about our online buyers, including
information about their preferences and purchase history. We use this data to
better target online buyers with products and services based on their individual
needs. We also provide a shopping service that brokers consumer transactions,
serving as an infomediary between online shoppers and more than 300 merchants,
allowing consumers to easily and quickly compare prices and shop online, without
having to navigate through multiple merchant Web sites. To enhance the shopping
experience, we also offer free, objective and up-to-date reviews of top products
in dozens of merchandise categories, provided by Productopia, Inc., a third
party product review service. Along with third party reviews by Productopia,
users of the comparison engine also have access to unbiased merchant quality
rankings from BizRate.com, a leading Internet merchant rating site.

    DATABASE MARKETING.  Through NBCi Direct, our e-list management and database
marketing division, we market products and services and deliver other email
marketing campaigns to our growing member base. NBCi Direct enables our clients
to target, transact with and retain customers via one-on-one direct email
marketing. Further, through NBCi Direct, we believe we have created an
innovative online sales channel with low customer acquisition costs. We have
gathered a significant base of information about our members through
registration information, responses to promotional campaigns and purchasing
information obtained from third parties. As more members join our Web sites
Xoom.com and Snap.com, participate in our topical communities and use our other
free services, and as we obtain additional purchasing history data, the level of
information about our members will continue to grow. To become a member, a
visitor must provide a valid e-mail address as well as permission to be
re-contacted with targeted news and product offers by e-mail. We apply a
sophisticated direct e-commerce approach to generate product sales and deliver
email marketing campaigns. NBCi Direct also enables our clients to generate
product sales from and deliver email marketing campaigns to their customer
bases. Unlike traditional direct marketing campaigns, which typically use
paper-based promotional materials delivered by mail, our campaigns use regular
e-mails to communicate offers to members, significantly reducing the cost of
reaching the consumer. The interactive nature of the Web enables us to present
such offerings in a more complete and dynamic manner than allowed by paper-based
delivery systems. Prior to introducing new product offerings to our entire
membership base, we select a subset of members for the purpose of test-marketing
a campaign. We have developed campaign-management software that uses statistical
techniques to analyze a test campaign and to predict the expected response rate
to such a campaign if it is rolled out to a larger group of members. We can also
analyze the effects of variations in price, graphics and copy. Results are
usually available in less than one day. On the basis of these tests, we select
product offers

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for a larger audience and modify them to maximize response rates, sales,
profitability and member retention. Testing also increases the accuracy of our
forecasts of product demand. As a result, we typically are able to carry small
amounts of inventory, thus lowering overhead and the risk of write-offs.

    SHOPPING DIRECTORY.  We offer our visitors and members a variety of shopping
opportunities through our shopping directory. We facilitate online transactions
by providing custom tailored buying opportunities for visitors and members and
enabling customers to easily buy products or services from a wide variety of
suppliers in a seamless, "one stop shopping" experience. In addition to offers
via e-mail, members may purchase products through various themed areas on the
Xoom.com and Snap.com Web sites, such as Investor Place and Health & Fitness and
other sites controlled by us, such as the Xoom.com shopping channel. Under our
Buyer's Club, our partners allow us to offer their users the ability to receive
pre-approved direct e-mail offers from us. In return, we offer to manage their
e-mail databases, offer to share revenue from product sales and offer our
e-commerce solutions. We currently manage approximately 2.5 million e-mail
addresses and third party sites, including Roxy.com, Talk City, Ulead Systems
and NameSecure.com. In addition, we have access to over one million other e-mail
addresses from third party sites who prefer to send these direct e-mail offers
themselves. These partners include BuyItNow, BuyONet.com and Mplayer.com, among
others.

    BUSINESS PORTAL.  We offer our small business users a variety of business
services, resources and e-commerce opportunities at our business portal located
at business.snap.com. This site offers services provided on other areas of our
Web sites but tailored for business users as well as co-branded services
provided by our partners. Services and resources available to business users at
our business portal include an online calendar and address book, free business
cards, assistance with developing a business plan and corporate credit cards.

    BUSINESS DIRECTORY.  Our global business directory provides a listing of
over seven million businesses in 250 countries. Over 750,000 of the businesses
listed in our directory have elected to become registered members. Membership
enables them to get a premier listing in our directory and provides them an
opportunity to receive targeted e-commerce product and service offers.

STRATEGIC ALLIANCES

    NBC BRAND INTEGRATION AND LICENSE AGREEMENT.  We have an agreement with NBC
that allows us to use the "NBC" trademark, multicolor logo and soundmark on our
Web properties. This agreement will assist us in building our core brands and
help us to turn a large portion of the NBC television viewers into NBCi online
members. The license agreement grants us the exclusive right to use the Web site
addresses of NBC.com, VideoSeeker.com and NBC-IN.com, in connection with
interactive delivery of content from NBC's television programming. NBC retains
the title to such Web site addresses.

    The license agreement also grants us an exclusive license to use, reproduce
and display on our Web sites short content from some NBC television programs.
Our agreement contains limited non-competition provisions restricting both
parties from competing with each other in various areas of business. For
example:

    - both parties are limited in their ability to authorize co-branding of any
      of the their respective properties, products or services by a competitor
      of the other;

    - neither party can invest in, purchase or loan money to a competitor of the
      other; and

    - NBC has granted us first look rights in relation to acquisitions of our
      non-primary competitors and related businesses.

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<PAGE>
    The license agreement will continue in perpetuity unless terminated on
grounds set forth in the license agreement, including:

    - by either party, if NBC or its subsidiaries no longer own at least 5% of
      our outstanding stock; or

    - by NBC, in the event we experience a change of control.

    VALUEVISION/SNAPTV.  To expand the market for our e-commerce services and
obtain direct access to the cable television audience, on September 13, 1999, we
entered into a strategic alliance with ValueVision International, Inc.,
consisting of re-branding and electronic commerce agreements, including
television home shopping, Internet shopping and direct e-commerce initiatives.
Under the terms of the agreements, Snap granted ValueVision a ten-year,
exclusive license to use Snap's "SnapTV" trademark for the purpose of operating
a television home shopping service and a Web site at www.snaptv.com in exchange
for a royalty of 20% of gross revenues received from Internet users in
connection with commerce opportunities on the SnapTV Web site. ValueVision's
television home shopping network, currently called ValueVision, will be
re-branded as SnapTV. The re-branding will be phased in during the first half of
2000. This partnership is an important part of our strategy to gather members
from various media sources and become a fully integrated media company.

    We will become the exclusive direct electronic commerce partner for SnapTV,
managing all such initiatives, including database management, e-mail marketing
and other sales efforts. Direct online shopping offers will include our products
and services, as well as SnapTV merchandise. We will share revenues with
ValueVision from all such initiatives. ValueVision and Snap will roll-out a new
companion Internet shopping service, SnapTV.com, featuring online purchasing
opportunities that spotlight products offered on-air along with online-only
e-commerce opportunities offered by SnapTV and our merchant partners. In
addition, we have the exclusive right to sell all Internet advertising on
SnapTV.com and will retain 50% of the revenues generated from such advertising.
The SnapTV.com online store will be featured prominently within Snap.com's
shopping area.

    CLEAR CHANNEL BROADCASTING.  We have entered into an agreement with Clear
Channel Broadcasting, Inc., a globally diversified media and outdoor advertising
company, which operates, or is affiliated with over 500 radio stations
worldwide. The agreement provides that we, through Xoom.com, will be the
exclusive provider of free Web site space, chat rooms and Web e-mail on
474 Clear Channel Web sites and that we, through Snap.com, will be the premier
provider of search and directory services on all Clear Channel Web sites.
Although we can promote Xoom.com or Snap.com on the Clear Channel Web sites, we
cannot display the NBC brand. We, through Xoom.com, also has the exclusive right
to send direct advertising and marketing offers to members associated with the
services provided by Xoom.com on the Clear Channel Web sites. Additionally, we
have agreed to purchase at least $3.5 million per year of advertising on the
Clear Channel radio network and billboards. This partnership broadens our reach
beyond the Internet and television into radio, thereby strengthening our
position as a truly integrated media company.

    TELOCITY.  In December 1999, we entered into a strategic partnership with
Telocity, a national broadband service provider, to bring "plug and play"
broadband Internet services to home residences. Under the agreement with
Telocity, we expect to provide a co-branded, high-speed Internet access service
to consumers by the third quarter of 2000. Under the agreement, we will also
promote Telocity's "plug and play" technology, a service that enables consumers
to obtain broadband services through the installation of a digital subscriber
line modem without additional telephone or computer equipment. This partnership
enables us to remain at the leading edge of broadband network growth and helps
position us as a dominant broadband content provider.

    CNBC.COM.  We currently own a 10% interest in CNBC.com and a subsidiary of
NBC owns the remaining ownership interests. CNBC.com is an online service that
provides financial information and analytic tools that is generated by CNBC and
other sources. Our equity interest is subject to restrictions

                                       11
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against transfer by us. Our equity interest has no governance rights with
respect to CNBC.com other than the right to vote such equity interest with
respect to matters requiring approval by a vote of equity holders of CNBC.com
under the limited liability company agreement of CNBC.com. However, as the
indirect holder of the remaining 90% interest in CNBC.com, NBC will have
effective control over any matters subject to approval by a vote of equity
holders. In addition, in the event that NBC assigns or transfers more than 50%
of the equity interests in CNBC.com to a third party, NBC may compel us to
transfer our equity interest in CNBC.com as well, and in some circumstances we
may compel NBC to include our equity interest in such a transfer by NBC.

    ASIACONTENT.COM LTD.  In January 2000, we entered into an agreement with
Asiacontent.com Ltd., a leading provider of Internet content, advertising and
commerce services to Asian markets to form a joint venture to launch community,
content, Internet portal and shopping services in Korea, Hong Kong, Singapore,
Malaysia, Taiwan and other Asian countries. Under the terms of the multifaceted
agreement, we own a 35 % stake in the venture, with an option to increase that
stake to 60 %. Asiacontent.com Ltd. currently owns a 65 % stake in the venture.
Additionally, as part of the agreement, we have acquired a minority equity
interest in Asiacontent.com Ltd.

    In the normal course of business, we have entered into a number of strategic
alliances with a variety of online properties to increase the distribution of
our products and services, to obtain access to content and to provide our
members with access to unique services and technologies.

MARKETING

    Our strategy is to leverage the promotional reach of NBC to turn television
viewers into visitors and registered members. We intend to stimulate brand
awareness and user demand for our services through integrated marketing elements
including outdoor, television, radio and Internet advertising as well as
promotions and sponsorships. We also seek to leverage the marketing reach of our
distribution partners and content providers through a range of joint marketing
programs, such as the SnapLENS initiative, which enables rapid creation of
customized versions of our Snap.com Web site. In addition, we cross-promote our
services with content providers though advertising swaps in both traditional and
online media.

    We have also entered into distribution agreements with selected Internet
companies to increase our reach. For example, since February 1999, Snap.com has
been listed as a search and navigation service on Netscape's Netcenter Web site
accessible via the "Internet Search" button, for which we pay Netscape a fee
based in part on the number of visits to our Snap.com Web site initiated through
Netscape. Netscape currently displays eight premier providers, including
Snap.com, on an equal placement basis, and has agreed to limit the total number
of premier providers to nine. Snap's agreement with Netscape has a term of one
year, expiring June 30, 2000.

ADVERTISING

    We believe we can leverage our relationship with NBC to offer advertisers
cross-promotion capability by coordinating network advertising with a variety of
advertising opportunities on our Web sites. Through our relationship with NBC,
we have the ability to coordinate advertising strategies to reach NBC's
substantial broadcast and cable television viewing audience. In addition, the
capabilities of the Internet have increased advertisers' emphasis on tracking
users carefully to connect with audiences that fit specific buying profiles.
Targeted Internet advertising campaigns, through directory and channel
advertisements or keyword advertisements, provide opportunities to engage in
high response, product-specific advertising. In order to provide such audiences
to advertisers, services and sites must develop technologies to enable them to
conduct complex demographic profiling of consumers. We have developed a
registration methodology and underlying databases that enable us to
differentiate among users. Through user segmentation, we intend to continue to
provide highly-targeted content selected by our editors in conjunction with
related e-commerce opportunities, increasing the effectiveness of advertising
messages.

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CUSTOMER SERVICE AND SUPPORT

    We believe that the strength of our customer service and technical support
operations is critical to our success in maintaining our membership base,
increasing membership and encouraging repeat usage and purchases. We have
established a team of customer service and technical support professionals who
process inquiries and monitor the status of orders, shipments and payments,
operating from 7 a.m. to 6 p.m. Pacific time Monday through Friday. Members can
access customer service by e-mail and through a toll-free telephone number. We
intend to enhance and automate the e-mail response portions of our customer
service and technical support operations in the near future.

TECHNOLOGY AND INFRASTRUCTURE

    We use Exodus Communications, Inc. and GlobalCrossing Global Center to house
our network servers and to provide and manage power and maintain the correct
environment for their networking and server equipment. We intend to standardize
our network and mail platforms between our principal and satellite offices. In
addition, we will seek to standardize the hardware and software used by our
various businesses by making purchases through a select group of vendors. We do
not presently expect to incur any material costs due to the consolidation of
vendor and supplier relationships. We will continue to strive to rapidly develop
and deploy high-quality tools and features into our systems without interruption
or degradation in service. In addition, we will continue to upgrade and expand
our server and networking infrastructure in an effort to ensure fast and
reliable access to our Web sites.

    We have developed an open standard hardware and software system that is
designed for reliability. Our system architecture is based on a distributed
model that is highly scalable, flexible and modular, emphasizing extensive
automation and a high degree of redundancy that is designed to minimize single
points of failure. The system integrates site management, network monitoring,
quality assurance, transactions processing and fulfillment services. Currently,
the system has 2.5 terabytes of unformatted disk space and has a peak bandwidth
of over 300 megabits per second.

    We also use third party and public domain server software that we have
optimized internally, and internally developed tools and utilities. Requests for
files are distributed to the appropriate servers using load distribution and
balancing hardware. We also employ in-house monitoring software that includes
automated diagnostic programs and intelligent agents that test and measure
system response, create reports for evaluation by technical staff and generate
pager calls in the event of system failures. Additional software monitors abuse
of the site by members and potential hackers. Reporting and tracking systems
generate daily membership, order and campaign reports. Membership and mailing
engines allow for efficient deployment of member data and targeting of e-mail
campaigns.

    We store member-generated content on a redundant array of independent disks.
We store member profile information on multiple disk arrays using Oracle and
Sybase database software and back it up on long-term tape storage devices on a
daily basis. We will continue to upgrade and expand our server and networking
infrastructure in an effort to maintain and improve fast and reliable access to
our Web sites and communities. Any system failure that causes an interruption in
service or a decrease in responsiveness of our Web sites could result in less
traffic on the Web site and, if sustained or repeated, could impair our
reputation and the attractiveness of our brands.

    Exodus and GlobalCrossing Global Center connect our Web sites to the
Internet via multiple links on a 24 hours a day, seven days per week basis.
Exodus and GlobalCrossing Global Center also provide and manage power and
maintain the correct environment for our networking and server equipment. We
manage and monitor servers and networks remotely from our headquarters in
San Francisco, California. We strive to rapidly develop and deploy high quality
tools and features into our system without interruption or degradation in
service. Any disruption in the Internet access provided by Exodus or
GlobalCrossing Global Center, or any interruption in the service that Exodus or
GlobalCrossing Global Center receives from other providers, or any failure of
Exodus or GlobalCrossing Global Center to handle higher volumes

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of Internet users to our Web sites could have an adverse effect on our business,
results of operations or financial condition.

    We developed our current search engine technology based on a collection of
third party licensed proprietary tools. Our engineers developed an enhanced
search technology to offer an approach to information retrieval that provides
users with enhanced levels of accuracy, relevancy, comprehensiveness and speed.
Our search engine includes built-in ranking algorithms with search features
geared toward advanced users, accessing producer-selected content from over
100 leading Web publishers and information from over 300,000 third party Web
sites while using Inktomi's index of over 100 million Web pages to provide a
comprehensive and seamless search experience. Our search results are enhanced by
the GlobalBrain.net proprietary search technology that enables our search engine
to rank sites by user preferences, formulate search responses reflecting the
popularity of Web sites and customize search results for specific user groups.

    Our search engine seeks to deliver relevant search results, emphasizing high
precision and recall functionality in responding to user queries. In addition,
due to the dynamic nature of the Internet, the retrieval of up-to-date
information has become another key factor for the evaluation of Internet search
services. To bring current information to the user, our producers continually
refresh Snap's database of Web pages and regularly update the database with new
Web pages. For every search, our innovative response compilation technology
allows the importation of producer-selected data collections into our system and
gives users ready access to highly relevant results via targeted links to
related Web site addresses.

    We have no fulfillment operation or warehouse facility of our own, and
currently rely primarily on Banta Global Turnkey Corporation for warehousing and
fulfillment services. We use automated interfaces for accepting, sorting and
processing orders to enable us to achieve the most rapid and economical purchase
and delivery terms. We process approximately 90% of orders online, with the
remainder by telephone, fax or mail.

COMPETITION

    The market for our products and services continues to develop and rapidly
evolve and is characterized by an increasing number of market entrants with
competing products and services. We expect that competition will continue to
intensify with brand name recognition becoming an increasingly important
competitive factor. To achieve brand name recognition, Internet companies are
consolidating a broad array of products and services under a single brand. For
example, recently a number of significant acquisitions and strategic plans have
been announced involving some of our competitors, including:

    - America Online's acquisition of Netscape and its proposed merger with Time
      Warner, Inc.;

    - CMGI's acquisition of 83% of AltaVista;

    - Disney's acquisition of the remaining interest in Infoseek not already
      owned by Disney;

    - @Home Network's acquisition of Excite; and

    - Yahoo!'s acquisitions of GeoCities and Broadcast.com.

    These acquisitions and proposed strategic relationships will result in more
formidable competitors, some of whom are aligned with other media companies.

    A number of companies offer competitive products and services addressing
many of our target markets. These companies include Alta Vista, America Online
(including AOL.com, Netcenter and ICQ), Disney (including the Go Network, which
is jointly operated with Infoseek), Excite@Home, Lycos (including Hotbot and
Tripod), Microsoft (including msn.com) and Yahoo! (including GeoCities and
Broadcast.com). In addition, our businesses will compete directly with a great
number of other Internet

                                       14
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sites and other media companies across a wide range of different online services
with advantages in expertise, brand recognition and other factors. For example,
we will compete with other community Web sites such as iVillage and
theglobe.com, content Web sites such as ESPN.com and local content Web sites
such as Ticketmaster Online-CitySearch.

    We also expect intense competition in the e-commerce market from an
ever-increasing number of companies selling goods and services over the
Internet, particularly goods and services that relate to the use of computers.
These competitors include Amazon.com, CompUSA and Egghead's Egghead.com.

    We believe the principal factors upon which we will compete will be brand
name recognition and our ability to offer advertisers and e-commerce partners a
large user and membership base. In addition to brand name recognition, our
ability to increase our user and membership base will be dependent upon our
ability to differentiate ourselves by the quality and variety of our product and
service offerings, including the variety and depth of content offered on our
online properties. Our ability to attract users is also dependent upon strategic
alliances and distribution relationships we execute. We believe the breadth and
quality of our service and product offerings, including our broadband
capabilities and our large and varied membership base, together with our
relationship with NBC, will enable us to effectively compete with our
competitors.

INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

    We view our technology as proprietary and will try to protect it under
existing United States and international laws relating to protection of
intellectual property. We have developed internal procedures to control access
and dissemination of our proprietary information. Despite our precautions, third
parties may succeed in misappropriating our intellectual property or
independently developing similar intellectual property. Protecting our
intellectual property against infringement could result in substantial legal and
other costs and could divert our limited management resources.

    Some of our technology is based on technology licensed from third parties.
As we introduce new services, we may need to license additional technology. If
we are unable to license needed technology on a timely basis and on commercially
reasonable terms, we could experience delays and reductions in the quality of
our services, all of which could adversely affect our business or results of
operations. Our reputation and the value of our proprietary information could
also be adversely affected by actions of third parties to whom we license our
proprietary information and intellectual property. If someone asserts a claim
relating to proprietary technology or information against us or our
subsidiaries, we may seek licenses to such intellectual property. We cannot
assure you, however, that we could obtain these licenses on commercially
reasonable terms, if at all. The failure to obtain the necessary licenses or
other rights could have an adverse effect on our business or results of
operations.

    Although we do not believe our businesses infringe the proprietary rights of
any third parties, we cannot assure you that third parties will not assert
claims against us in the future. From time to time, our businesses have been
subject to claims of alleged infringement of intellectual property rights of
others on the basis of the actions of such businesses and the content generated
by their members and users. These categories of claims, whether or not
meritorious, could result in litigation and become a drain on our management and
financial resources. If successful, claims of this nature could subject us to
liability, injunctive relief restricting our use of intellectual property
important to our operations, and could ultimately cause us to lose rights to
some of our intellectual property. Any of these events could have an adverse
effect on our business or results of operations.

EMPLOYEES

    As of December 31, 1999, we had approximately 635 full-time employees. Our
future success will depend, in part, on our ability to continue to attract,
retain and motivate highly-qualified technical and management personnel, for
whom competition is intense. From time to time, we will employ independent

                                       15
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contractors to support our research and development, marketing, sales and
support and administrative organizations. Our employees are not covered by any
collective bargaining agreement.

ITEM 2.  PROPERTIES

    Our headquarters are currently located in a leased facility in
San Francisco, California, consisting of approximately 187,000 square feet of
office space, which is under an operating lease that expires in March 2010. We
lease two additional office spaces in San Francisco including one space of
approximately 26,000 square feet which is under an operating lease that expires
in July 2007, and one space of approximately 97,000 square feet which is under
an operating lease that expires in April 2000.

    In addition to our San Francisco offices, we are also leasing office spaces
in New York, New York consisting of approximately 32,000 square feet and
Los Angeles, California consisting of approximately 15,000 square feet of office
space. We also occupy office space in Seattle, Washington and Chicago, Illinois.

ITEM 3.  LEGAL PROCEEDINGS

    As a recently formed company, NBCi is not directly subject to any pending or
threatened litigation. NBCi's operations and financial performance, however, may
be affected by pending litigation against Xoom.com and Snap.com or our other
subsidiaries or online properties.

    Zoom Telephonics, Inc. filed a lawsuit against Xoom.com in September 1998 in
the United States District Court for the District of Massachusetts alleging
trademark infringement and related statutory violations. In April 1999, Zoom
Telephonics filed a motion for preliminary injunction to stop Xoom.com from
using any mark containing "Xoom". In October 1999 the court denied Zoom
Telephonics' motion for a preliminary injunction but allowed Zoom Telephonics to
request the court to reconsider the motion if the Xoom.com merger did not close
by October 31, 1999. On November 3, 1999, Zoom Telephonics filed a motion to
renew their previous motion for preliminary injunction. On November 17, 1999,
Xoom.com filed an opposition to Zoom Telephonics' motion to renew its previous
motion for a preliminary injunction. We believe that the claims asserted by Zoom
Telephonics are without merit, and we intend to defend against them vigorously.
We cannot assure you, however, that the results of this litigation will be
favorable to us. An adverse result of the litigation would seriously harm our
business and results of operations, particularly if the litigation forces us to
discontinue our use of the Xoom.com mark. Any name change could result in
confusion to customers and investors, which could adversely affect the results
of our operations and the market price of the common stock.

    In January 1998, Xoom.com became aware that Imageline, Inc. claimed to own
the copyright in certain images that a third party, Sprint Software Pty Ltd, had
licensed to Xoom.com. Some clip art images that Imageline alleged infringed
Imageline's copyright were included by Xoom.com in versions of its Web Clip
Empire product and licensed by Xoom.com to third parties, including other
software clip publishers. Xoom.com's contracts with such publishers require it
to indemnify the publisher if copyrighted material licensed from Xoom.com
infringes a copyright. Imageline claims that Xoom.com's infringement of
Imageline's copyrights is ongoing. Xoom.com engaged in discussions with
Imageline, but were unable to reach any agreement regarding a resolution of this
matter. On August 27, 1998, Xoom.com filed a lawsuit in the United States
District Court for the Eastern District of Virginia against Imageline, certain
parties affiliated with Imageline and Sprint Software regarding Xoom.com's and
the licensees' alleged infringement of Imageline's copyright in certain clip art
that Xoom.com licensed from Sprint Software. The lawsuit sought, among other
relief, disclosure of information from Imageline concerning the alleged
copyright infringement, a declaratory judgment concerning the validity and
enforceablilty of Imageline's copyrights and copyright registrations, a
declaratory judgment regarding damages, if any, owed by Xoom.com to Imageline
and indemnification from Sprint Software for damages, if any, owed by Xoom.com
to Imageline. There is no contractual limitation on Sprint Software's
indemnification. While we are seeking indemnification from Sprint Software for
damages, if any, we cannot assure you Sprint Software will be able to fulfill

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the indemnity obligations under its license agreements with Xoom.com. On
September 17, 1998, Imageline filed a counterclaim, which Imageline amended in
January 1999, seeking up to $60.0 million in damages. In March 1999, the parties
completed the discovery process and filed separate motions for summary
judgement. On April 5, 1999, the court granted one of Xoom.com's motions for
partial summary judgment and stayed the case to allow Imageline to file all
necessary copyright registration applications to cover the clip art images.
Further, we are subject to an indemnification claim made by International
Microcomputer Software, Inc. ("IMSI") in connection with a judgment entered in
favor of Imageline and against IMSI in connection with the infringement of
Imageline copyrights. We may be subject to similar indemnifications by third
parties. Based on the discussions with Imageline, we believe the range of
liability related to this matter is from $0 up to $10,000,000; however, we
believe it is unlikely that the liability would exceed $1,000,000. Accordingly,
we reserved $1,000,000 for this potential liability, the expense of which was
included in non-recurring charges for the year ended December 31, 1997. We
believe that the $1,000,000 reserve represents a reasonable estimate of the loss
that could be incurred in the Imageline dispute. Based on information available
to date, management does not believe that the outcome of this matter will
seriously harm our financial position, results of operations and cash flows over
and above the $1,000,000 accrued in the 1997 financial statements. If our
reserves are not adequate to defend this claim, the resulting outcome could
seriously harm our business, results of operations, cash flows or financial
condition.

    Snap filed a complaint against CityAuction, Inc. and Ticketmaster
Online-CitySearch in March 1999 in connection with an agreement entered into
between Snap and CityAuction to promote CityAuction's online auction site in
exchange for monetary compensation and warrants to purchase shares of
CityAuction. This matter is presently pending in Superior Court in
San Francisco, California. Snap is claiming that CityAuction breached the
agreement by refusing to honor Snap's exercise in February 1999 of its
CityAuction warrants, failing to make a $125,000 payment due to Snap and failing
to provide Snap with notice of CityAuction's pending acquisition by Ticketmaster
Online-CitySearch. Snap is also claiming that Ticketmaster Online-City Search
induced CityAuction to breach its contractual obligations to Snap. Snap is
seeking damages, injunctive and equitable relief of not less than $5.0 million
from CityAuction, in addition to damages from Ticketmaster
Online-CitySearch Inc. for intentional interference with the Snap and
CityAuction agreements. CityAuction has filed a cross-complaint against Snap
seeking rescission of its promotion agreement with Snap, restitution of not less
than $125,000 and unspecified damages for Snap's alleged failure to perform the
promotion agreement. This matter is in the discovery stage. An unfavorable
outcome in this litigation would deny us the economic benefit of the claimed
payments and our stock ownership in CityAuction and expose us to a damage
judgment in favor of CityAuction.

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

    On November 24, 1999, prior to the consummation of the transactions
contemplated by the merger agreement whereby Snap and Xoom.com became our
wholly-owned subsidiaries, we held a Special Meeting of our sole stockholder. At
this special meeting our sole stockholder voted all of its shares in favor of
the following matters:

        1.  A proposal to approve and enter into the agreement and plan of
    contribution and merger, dated as of May 9, 1999, as amended on October 20,
    1999.

        2.  A proposal to approve and enter into the amended and restated
    agreement and plan of contribution, investment and merger, dated as of
    July 8, 1999, as amended on October 20, 1999.

    On October 18, 1999 our then sole stockholder executed written consents
approving the following matters:

        1.  A proposal to approve the adoption of our 1999 Stock Incentive Plan

                                       17
<PAGE>
    On November 18, 1999 our then sole stockholder executed written consents
approving the following matters:

        1.  A proposal to approve the adoption of our 1999 Employee Stock
    Purchase Plan.

                                       18
<PAGE>
                                    PART II

ITEM 5.  MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
         RELATED STOCKHOLDER MATTERS

(A)  MARKET INFORMATION

    Our Class A common stock has been quoted on the Nasdaq National Market under
the symbol NBCI since November 30, 1999, the date the merger of Xoom.com, Snap
and NBC Mulitmedia Division was completed. Prior to such time, the common shares
of Xoom.com registered with the Securities and Exchange Commission had been
quoted on the Nasdaq National Market under the symbol XMCM since Xoom.com's
initial public offering on December 9, 1998. The following table sets forth, for
the periods indicated, the high and low sale prices per share of the common
stock for both NBCi and Xoom.com as reported on the Nasdaq National Market for
the periods indicated:

<TABLE>
<CAPTION>
                                                                  HIGH            LOW
                                                              -------------   -----------
<S>                                                           <C>             <C>
Fiscal Year Ended December 31, 1998:
  Fourth Quarter (from December 9, 1998) (Xoom.com).........  $      45 1/8   $    21 1/8

Fiscal Year Ended December 31, 1999:
  First Quarter (Xoom.com)..................................             79        28 1/4
  Second Quarter (Xoom.com).................................         98 1/2            41
  Third Quarter (Xoom.com)..................................       61 15/16            30
  Fourth Quarter:
    October 1 through November 29, 1999 (Xoom.com)..........         88 1/2        47 1/2
    November 30 through December 31, 1999 (NBCi)............             95            59
</TABLE>

    Our Class B common stock has no established public trading market.

    HOLDERS  As of December 31, 1999, there were approximately 293 holders of
record of our Class A common stock and one holder of record of our Class B
common stock.

    DIVIDENDS  We have not declared or paid any cash dividends on our capital
stock since inception and do not expect to pay any cash dividends for the
foreseeable future. We currently intend to retain future earnings, if any, to
finance the expansion of our business.

(B)  RECENT SALES OF UNREGISTERED SECURITIES

    On November 29, 1999, CNET, Inc. and Global BrainNet, Inc. contributed their
ownership interests in Snap to us in exchange for 7,147,584 and 97,479 shares of
our Class A common stock, respectively, in accordance with the terms and
provisions of the agreement and plan of contribution and merger dated May 9,
1999, as amended on October 20, 1999. In addition, upon the merger of our
wholly-owned subsidiary with and into Xoom.com, an affiliate of NBC received
960,028 shares of our Class A common stock which were automatically converted
into shares of our Class B common stock on November 30, 1999. The shares of our
Class A common stock were issued in reliance upon the exemption provided by
Section 4(2) of the Securities Act.

    On November 30, 1999, in accordance with the terms and provisions of the
agreement and plan of contribution, investment and merger dated July 8, 1999, as
amended on October 20, 1999: (1) Neon Media Corporation, was merged with and
into us in exchange for 12,173,111 shares of our Class B common stock issued to
NBC Multimedia; (2) NBC Multimedia received 11,417,569 shares of our Class B
common stock in exchange for its ownership interests in Snap; (3) NBC Multimedia
transferred the business related to VideoSeeker.com to us in exchange for our
$39,477,953 subordinated zero coupon convertible note due 2006; and (4) GE
Investments Subsidiary purchased our $447,416,805 subordinated zero coupon
convertible note due 2006 in exchange for an assignment of a $340 million note
issued by NBC. The shares of our

                                       19
<PAGE>
Class B common stock and the convertible notes were issued in reliance upon the
exemption provided by Section 4(2) of the Securities Act.

(C)  USE OF PROCEEDS

    Xoom.com completed its initial public offering in December 1998. The
following information relates to the use of proceeds of the offering:

    (1) EFFECTIVE DATE OF REGISTRATION STATEMENT AND COMMISSION FILE NUMBER.
Xoom.com's Registration Statement on Form S-1, File No. 333-62395 (the
"Registration Statement"), relating to the offering, became effective on
December 8, 1998.

    (2) OFFERING DATE. The closing date of the offering was December 14, 1998.

    (3) MANAGING UNDERWRITERS. Bear, Stearns & Co. Inc.

    (4) SECURITIES REGISTERED AND PROPOSED AGGREGATE OFFERING PRICE. Xoom.com
registered a total of 4,600,000 shares of common stock. The proposed maximum
aggregate offering price was $64,400,000.

    (5) SECURITIES SOLD. Xoom.com sold a total of 4,600,000 shares of common
stock in the offering, at a price of $14 per share.

    (6) AGGREGATE GROSS PROCEEDS, EXPENSES AND AGGREGATE NET PROCEEDS. The sale
of the 4,600,000 shares of common stock generated aggregate gross proceeds of
$64,400,000. The aggregate net proceeds to Xoom.com was approximately
$57,342,000, after deducting underwriting discounts and commissions of
$4,508,000 and Xoom.com's expenses of the offering of approximately $2,550,000.

    (7) USE OF PROCEEDS. Through December 31, 1999, Xoom.com and NBCi used total
proceeds from Xoom.com's initial public offering as follows: (i) $2.7 million of
cash used for the repayment of notes payable issued in connection with the
execution of a loan agreement, the acquisition of Pagecount, Inc., the
acquisition of Global Bridges Technologies, Inc., the purchase of certain assets
of Revolutionary Software, Inc., and the license of certain technology from
ArcaMax, Inc.; (ii) $15.6 million of net cash used in connection with the
acquisitions of Focused Presence, Inc., Liquid Market, Inc., MightyMail
Networks, Inc., Net Floppy, Inc., Paralogic Software Corporation and Private
One, Inc., and a portion of the acquisition costs related to our acquisition of
Snap and the businesses related to NBC.com, NBC-IN.com and Videoseeker.com; and
(iii) $639,000 of cash used for the repayment of capital lease obligations and
other notes payable. The remaining $38.4 million in net proceeds has been
allocated for general corporate purposes, including working capital and capital
expenditures.

                                       20
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA

    The following selected consolidated financial data should be read in
conjunction with the Consolidated Financial Statements and notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing elsewhere in this Annual Report on Form 10-K.

<TABLE>
<CAPTION>
                                                                                             PERIOD FROM
                                                                                           APRIL 16, 1996
                                                            YEAR ENDED DECEMBER 31,          (INCEPTION)
                                                         ------------------------------        THROUGH
                                                           1999       1998       1997     DECEMBER 31, 1996
                                                         --------   --------   --------   -----------------
                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                      <C>        <C>        <C>        <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Net revenue:
  Advertising..........................................  $ 19,953   $  2,144   $     60         $   --
  E-commerce...........................................    15,628      6,174        781             --
                                                         --------   --------   --------         ------
Total net revenue......................................    35,581      8,318        841             --

Cost of net revenue:
  Cost of advertising..................................     6,296      1,385        333             --
  Cost of e-commerce...................................    10,504      3,542        171             --
                                                         --------   --------   --------         ------
Cost of net revenue....................................    16,800      4,927        504             --

Gross profit...........................................    18,781      3,391        337             --

Operating expenses:
  Operating and development............................     7,674      2,939        965            266
  Sales and marketing..................................    21,951      2,393        292             23
  General and administrative...........................    11,482      3,366        721            150
  Promotion and advertising provided by NBC............    16,858         --         --             --
  Amortization of deferred compensation................       963      1,416        248             --
  Purchased in-process research and development........     2,603        790         --             --
  Amortization of intangible assets....................    35,822      1,843         --             --
  Non-recurring charges................................    17,801         --      1,243             --
                                                         --------   --------   --------         ------
Total operating expenses...............................   115,154     12,747      3,469            439
                                                         --------   --------   --------         ------
Loss from operations...................................   (96,373)    (9,356)    (3,132)          (439)

Other income (expense):
  Interest income......................................    10,963        187         --             --
  Interest expense.....................................    (1,421)      (135)        --             --
  Interest expense related to warrant..................        --     (1,494)        --             --
                                                         --------   --------   --------         ------
Net loss...............................................  $(86,831)  $(10,798)  $ (3,132)        $ (439)
                                                         ========   ========   ========         ======
Net loss per share--basic and diluted..................  $  (4.26)  $  (1.37)  $  (0.64)        $(0.89)
                                                         ========   ========   ========         ======
Number of shares used in per share calcuation--basic
  and diluted..........................................    20,386      7,879      4,874            496
                                                         ========   ========   ========         ======
</TABLE>

<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                         -------------------------------------------------
                                                            1999         1998         1997         1996
                                                         ----------   ----------   ----------   ----------
                                                                          (IN THOUSANDS)
<S>                                                      <C>          <C>          <C>          <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments......  $  204,764   $   56,575   $        6   $        1
Amounts receivable from NBC and its affiliates.........  $  340,000   $       --   $       --   $       --
Working capital (deficit)..............................  $  197,849   $   52,560   $   (1,400)  $      156
Total assets...........................................  $2,494,096   $   66,874   $      782   $      705
Long-term obligations, less current portion and amounts
  due to related parties...............................  $   11,737   $      528   $       --   $       --
Amounts due to NBC and its affiliates, non-current.....  $  371,233   $       --   $       --   $       --
Total stockholders' equity (deficit)...................  $1,999,784   $   60,333   $     (873)  $      560
</TABLE>

                                       21
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW

    We are an integrated media company that combines portal, community, online
and on-air advertising, and e-commerce services designed to deliver a
comprehensive, next-generation online experience to a global audience. We were
organized in May 1999. As a result of merger transactions that occurred on
November 29 and November 30 of 1999, Xoom.com and Snap became our wholly-owned
subsidiaries, and we became the owners of the businesses related to NBC.com,
NBC-IN.com and VideoSeeker.com and a 10% ownership interest in CNBC.com. On
November 29, 1999 the transactions contemplated by the merger agreement were
consummated. Under the merger agreement, (1) Xenon 3, our wholly-owned
subsidiary, was merged with and into Xoom.com; and (2) CNET exchanged its
ownership interest in Snap, all in exchange for shares of our Class A common
stock. On November 30, 1999 the transactions contemplated by the contribution
agreement were consummated. Under the contribution agreement, (1) Neon Media
Corporation, the owner of the businesses related to NBC.com, NBC-IN.com and a
10% ownership interest in CNBC.com, was merged with and into us in exchange for
shares of our Class B common stock issued to NBC Multimedia; (2) NBC Multimedia
received shares of our Class B common stock in exchange for its ownership
interests in Snap; (3) NBC Multimedia transferred the business related to
VideoSeeker.com to us in exchange for our $39.5 million subordinated zero coupon
convertible note due 2006; and (4) GE Investments Subsidiary purchased our
$447.4 million subordinated zero coupon convertible note due 2006 in exchange
for an assignment of a $340 million note issued by NBC. The total purchase costs
of the transactions have been calculated with Xoom.com treated as the accounting
acquiror and give effect to the purchase of the Internet properties contributed
by NBC and to NBCi's acquisition of CNET's and NBC's ownership interests in
Snap.

    We have not achieved profitability on a quarterly or annual basis to date,
and anticipate that we will incur net losses for the foreseeable future. The
extent of these losses will depend, in part, on the amount and rates of growth
in our net revenue from advertising and e-commerce. We expect our operating
expenses to increase significantly, especially in the areas of sales and
marketing, goodwill amortization and brand promotion and non-cash charges
resulting from stock compensation. As a result, we will need to increase our
quarterly net revenue to achieve profitability. We believe that pro-forma
period-to-period comparisons of our operating results are not meaningful and
that you should not rely upon the results for any period as an indication of
future performance. Our business, results of operations and financial condition
will be significantly and adversely affected if:

    - net revenue does not grow at anticipated rates;

    - increases in operating expenses are not offset by commensurate increases
      in net revenue; or

    - we are unable to adjust operating expense levels as a result of lower net
      revenues.

    Our operating losses might increase in the future, and we cannot guarantee
that we will ever achieve or sustain profitability.

    We intend to continue making acquisitions to increase online reach and
membership and to seek additional strategic alliances with content and
distribution partners, including alliances that create co-branded sites through
which we market our services. Acquisitions carry numerous risks and
uncertainties, including:

    - difficulties in integrating operations, personnel, technologies, products
      and the information systems of the acquired companies;

    - diversion of management's attention from other business concerns;

    - risks of entering geographic and business markets in which we have little
      or no prior experience; and

                                       22
<PAGE>
    - potential loss of key employees.

    We cannot guarantee that we will be able to successfully integrate any
businesses, products, technologies or personnel that might be acquired in the
future. A failure to integrate acquired entities or assets successfully could
seriously harm our business, results of operations and financial condition. In
addition, we cannot guarantee that we will be successful in identifying and
closing transactions with potential acquisition candidates.

RECENT EVENTS

    ASIACONTENT.COM, LTD.  On January 12, 2000 we entered into a joint venture
agreement with Asiacontent.com Ltd., a developer of Internet content,
advertising and commerce services in the Asian market. The joint venture is
intended to develop and launch comprehensive, localized Internet community,
content, portal and shopping services in Korea, Hong Kong, Singapore, Malaysia
and Taiwan. These new Web sites will combine our content and technology with
localized content and services developed by Asiacontent.com and other local
providers to offer users, partners and advertisers in the Asian markets high
quality Internet services focused on local languages. In February, 2000, we
invested approximately $10 million in Asiacontent, Ltd.

    FOLLOW-ON OFFERING.  On February 3, 2000, we completed a follow-on offering
of 4,600,000 shares of our Class A common stock at a price of $81.38 per share.
Of the 4,600,000 shares of Class A common stock sold in the offering, 3,650,000
were sold by us and 950,000 shares of Class A Common Stock were sold by existing
stockholders. We received net proceeds from the offering of approximately
$280.1 million. Concurrent with our follow-on offering there was also a public
offering of hybrid equity securities known as Trust Automatic Common Exchange
Securities, or TRACES, by the NBCi Automatic Common Exchange Securities Trust
which issued 1,250,000 of these securities to the public.

    ALLBUSINESS.COM.  As of March 7, 2000 we acquired 100% of the outstanding
shares of AllBusiness.com, a privately held company with approximately 120
employees active in the business-to-business field for approximately
$225 million in stock. In addition, we assumed the outstanding options of
AllBusiness.com. Ten percent of the purchase consideration was placed into
escrow and will be released in March 2001, upon the expiration of certain
indemnification obligations. Escrow shares will be released to all shareholders
based on their relative equity interests in AllBusiness.com at the time of
consummation of the acquisition.

                                       23
<PAGE>
RESULTS OF OPERATIONS

    The following table presents our pro forma condensed combined statement of
operations data for the periods indicated as a percentage of total net revenue.

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net revenue:
  Advertising...............................................     56.1%      25.8%       7.1%
  E-commerce................................................     43.9       74.2       92.9
                                                              -------    -------    -------
Total net revenue...........................................    100.0      100.0      100.0

Cost of net revenue:
  Cost of advertising.......................................     17.7       16.6         --
  Cost of e-commerce........................................     29.5       42.6       37.9
                                                              -------    -------    -------
Cost of net revenue.........................................     47.2       59.2       37.9

Gross profit................................................     52.8       40.8       62.1

Operating expenses:
  Operating and development.................................     21.6       35.3      136.8
  Sales and marketing.......................................     61.7       28.8       34.7
  General and administrative................................     32.3       40.5       85.7
  Promotion and advertising provided by NBC.................     47.4         --         --
  Amortization of deferred compensation.....................      2.7       17.0       29.5
  Purchased in-process research and development.............      7.3        9.5         --
  Amortization of intangible assets.........................    100.7       22.2         --
  Non-recurring charges.....................................     50.0         --      147.8
                                                              -------    -------    -------
Total operating expenses....................................    323.7      153.3      434.5

Loss from operations........................................   (270.9)    (112.5)    (372.4)
Other income (expense):
  Interest income...........................................     30.8        2.2         --
  Interest expense..........................................     (4.0)      (1.6)        --
  Interest expense related to warrant.......................       --      (18.0)        --
                                                              -------    -------    -------
Net loss....................................................   (244.1)%   (129.9)%   (372.4)%
                                                              =======    =======    =======
</TABLE>

    NET REVENUE.  Total net revenue was $35.6 million in the year ended
December 31, 1999, $8.3 million in the year ended December 31, 1998 and $841,000
in the year ended December 31, 1997. The increases in net revenue were primarily
due to the following factors: (A) an increase in traffic directed to our Web
sites, which resulted in increased attractiveness to advertisers and strategic
partnership growth; (B) an increase in the number and frequency of e-mail
offerings and broader product offerings which resulted in an increase in product
sales through e-commerce; and in 1999, (C) the inclusion in our revenues of one
month of advertising revenues generated by Snap and the businesses related to
NBC.com, NBC-IN.com, and Videoseeker.com, following the closing of the NBCi
merger transactions on November 30, 1999.

    ADVERTISING REVENUE.  Advertising revenue, which includes online and on-air
media sales, totaled $20 million in 1999, compared to $2.1 million in 1998 and
$60,000 in 1997. These increases in advertising revenue were primarily a result
of an increase in membership, increased site traffic, the expansion of our
advertising sales force and increased co-branding agreements with our Web sites.
Additionally, the increase during 1999 was due to the inclusion in our revenues
of one month of advertising revenues generated by Snap and the businesses
related to NBC.com, NBC-IN.com and Videoseeker.com, following the closing of the
NBCi merger transactions on November 30, 1999, as well as promotion on NBC's
television network. In 1999, online advertising totaled $18.2 million, while
on-air advertising totaled $1.8 million. There was no

                                       24
<PAGE>
on-air advertising in 1998 or 1997. Included in advertising revenue in 1999 was
$1.7 million in revenue from the sale of television advertising procured from
NBC and $100,000 in radio advertising procured from Clear Channel. Revenue from
related parties accounted for less than 10% of revenue in 1999. There was no
revenue from related parties in 1998 or 1997. Included in advertising revenue in
1999 was $2.7 million in revenue from exchange of media and advertising services
for equity instruments or advertising in other media. There was no barter
revenue in 1998 or 1997. Barter revenue is generally recorded at the fair value
of services provided.

    The percentage of total net revenue attributable to advertising revenue
increased to 56.1% in 1999 from 25.8% in 1998 and 7.1% in 1997. These increases
were primarily due to increased site traffic, an increase in our membership base
and the expansion of our advertising sales force, all of which resulted in a
higher volume of advertising customers.

    E-COMMERCE REVENUE.  E-commerce revenue consists of online product sales,
inclusive of shipping and handling fees, fees paid to us for co-branded
e-mail-based product offers, lead generation fees and license fees. E-commerce
revenue increased to $15.6 million in 1999 from $6.2 million in 1998 and
$781,000 in 1997. The increases in e-commerce revenue were primarily due to the
expansion of our membership base combined with an increase in the number and
frequency of e-mail offerings, which resulted in an increase in product sales,
as well as an expansion of the breadth of products offered.

    The percentage of total net revenue attributable to e-commerce revenue
decreased to 43.9% during 1999 from 74.2% during 1998 and 92.9% during 1997.
These decreases were due to the fact that advertising revenue grew at a more
rapid rate than e-commerce revenue in the years 1999, 1998 and 1997. Advertising
revenue grew more rapidly than e-commerce revenue in 1999 and 1998 due to the
expansion of our reach to end-users achieved through on-air and online
advertising. As our membership base has grown, the demand for online and on-air
advertising has increased.

    COST OF NET REVENUE.  Cost of net revenue increased to $16.8 million in 1999
from $4.9 million in 1998 and $504,000 in 1997, as a result of increases in net
revenue. As a percentage of net revenue, cost of net revenue decreased to 47.2%
of net revenue in 1999 and increased to 59.2% in 1998 from 37.9% in 1997. The
decrease during 1999 was due to the change in our revenue mix. Advertising
revenue, which has higher margins than e-commerce revenue, was 56.1% of net
revenue in 1999, and it was 25.8% of revenue in 1998.

    COST OF ADVERTISING REVENUE.  Cost of advertising revenue consists of costs
incurred to acquire, create and produce the content of our Web sites as well as
the technical hosting and bandwidth charges associated with transmitting such
content over the Internet. Cost of advertising revenue increased to
$6.3 million in 1999 from $1.4 million 1998 and $333,000 in 1997. These
increases were primarily a result of increased content costs and hosting and
bandwith charges, and an increase in demand for advertising on co-branded sites.

    As a percentage of advertising revenue, cost of advertising revenue
decreased to 31.6% of net revenue 1999 from 64.6% in 1998 and 555.0% in 1997.
These decreases were primarily due to advertising revenues growing at a higher
rate than cost of advertising revenues.

    COST OF E-COMMERCE REVENUE.  Cost of e-commerce revenue consists primarily
of the costs of merchandise sold to customers, credit card commissions, product
fulfillment and outbound shipping and handling costs. Cost of e-commerce
increased to $10.5 million in 1999 from $3.5 million in 1998 and $171,000 in
1997. These increases were primarily a result of the growth in e-commerce sales.

    As a percentage of e-commerce revenue, cost of e-commerce revenue increased
to 67.2% of e-commerce revenue in 1999 from 57.4% in 1998 and 21.9% in 1997.
These increases were primarily a result of the fact that in 1999 and 1998, we
broadened our product offerings. Our new product offerings included items with
higher costs than in the prior years.

                                       25
<PAGE>
    OPERATING AND DEVELOPMENT EXPENSES.  Operating and development expenses
consist primarily of payroll and related expenses for development and network
operations personnel and consultants, costs related to modifications,
enhancements and new development operations to enhance our Web sites. Operating
and development expenses increased to $7.7 million in 1999 from $2.9 million in
1998 and $965,000 in 1997. These increases were primarily due to higher payroll
and related expenses caused by additional headcount. We believe operating and
development expenses will increase significantly in the future as management
initiates new product features and makes significant investments in its Web
sites to remain competitive.

    Operating and development expenses decreased as a percentage of net revenue
to 21.6% in 1999 from 35.3% in 1998 and 136.8% in 1997. These decreases were due
to net revenues growing at a higher rate than spending for operating and
development.

    SALES AND MARKETING EXPENSES.  Sales and marketing expenses consist of
payroll and related expenses for personnel engaged in sales, marketing and
customer support, as well as advertising, promotional and traffic distribution
expenditures. Sales and marketing expenses increased to $22.0 million in 1999
from $2.4 million in 1998 and $292,000 in 1997. These increases were due to
increased personnel and related expenses required to implement our sales and
marketing strategy, as well as increased other promotional and advertising
expenses. We believe sales and marketing expenses will increase significantly in
future periods as additional personnel are hired and as a result of increased
branding, marketing and promotional spending.

    Sales and marketing expenses increased as a percentage of net revenue to
61.7% in 1999 from 28.8% in 1998 and it decreased in 1998 from 34.7% in 1997.
The increase during 1999 was due to significant increases in sales and
marketing, as we have grown our sales force and increased our branding,
marketing and promotional expenditures. The decrease in 1998 was due to the
growth in revenues, as we commenced offering products on our Web site in March
of 1997.

    GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses
consist primarily of payroll and related expenses for general corporate
functions, including finance, legal, accounting, business development, human
resources, investor relations and administration, as well as outside legal and
accounting fees, director fees and insurance and facilities-related expenses.
General and administrative expenses increased to $11.5 million in 1999 from
$3.4 million in 1998 and $721,000 in 1997. These increases were primarily due to
increases in the number of general and administrative personnel, as well as
increases in professional services and facilities-related expenses to support
the growth of our operations. We believe general and administrative expenses
will increase significantly in future periods as a result of staff expansion and
increased operational costs associated with the growth of our business.

    General and administrative expenses decreased as a percentage of net revenue
to 32.3% in 1999 from 40.5% in 1998 and 85.7% in 1997. These decreases were due
to net revenues growing at a higher rate than general and administrative
expenses.

    PROMOTION AND ADVERTISING PROVIDED BY NBC.  We have recorded $16.9 million
in promotion and advertising expense in the year ended December 31, 1999, and we
did not record any promotion and advertising expense related to NBC promotions
in 1998 or 1997. This increase occurred due to the NBCi merger transactions that
closed on November 30, 1999. In connection with these transactions, we entered
into an advertising agreement to purchase at least $405.0 million of advertising
on NBC's television properties over the next four years.

    AMORTIZATION OF DEFERRED COMPENSATION.  Amortization of deferred
compensation reflects the amortization of stock compensation charges resulting
from employee stock option grants. Deferred compensation charges account for the
difference between the exercise price and the deemed fair value of specific
stock options granted to our employees and are amortized over the vesting
period. We recorded amortization of deferred compensation of $963,000 in 1999,
$1.4 million in 1998 and $248,000 in 1997. We cannot

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guarantee that we will not accrue additional deferred compensation charges,
which could harm our business, results of operations and financial condition.

    PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT.  During 1999 we recognized
cost of purchased in-process research and development of $2.6 million in
connection with the acquisitions of MightyMail Networks, Inc. and Paralogic
Software Corporation. During 1998 we recognized $790,000 in connection with the
acquisition of Paralogic Corporation, the purchase of certain assets of
Revolutionary Software, Inc. and the acquisition of substantially all of the
assets of Pagecount, Inc. We did not record any cost of purchased in-process
research and development in 1997.

    In each acquisition, the amounts allocated to purchased in-process research
and development were expensed upon acquisition because technological feasibility
had not been established and no future alternative uses existed. The values
assigned to purchased in-process technology were determined by identifying the
on-going research projects for which technological feasibility had not been
achieved and assessing the state of completion of the research and development
effort. The state of completion was determined by estimating the costs and time
incurred to date relative to those costs and time to be incurred to develop the
purchased in-process technology into commercially viable products, estimating
the resulting net cash flows only from the percentage of research and
development efforts complete at the date of acquisition, and discounting the net
cash flows back to their present value. The discount rate included a factor that
took into account the uncertainty surrounding the successful development of the
purchased in-process technology projects.

    MIGHTYMAIL NETWORKS, INC.  In May 1999, we acquired 100% of the outstanding
shares of MightyMail Networks, Inc. for $23.1 million in stock and assumption of
stock options. In connection with the acquisition, we acquired MightyMails'
e-mail platform. The MightyMail platform allows branding material and marketing
content to be placed within person-to-person e-mail that is sent by individuals
to other individuals. At the time of the acquisition, MightyMail Networks was
developing a version of the MightyMail Networks technology, which was not
completely functional as a commercially viable product.

    As of the date of the technology's valuation, we estimated that 50.0% of the
research and development effort had been completed at the date of acquisition
and expected the remaining research and development efforts relating to the
completion of the MightyMail technology would require approximately six months
of effort from the date of valuation through its release date in the fourth
quarter of 1999. We estimated that three full-time engineers would be required
to complete the in-process projects. Accordingly, we estimated that the total
estimated research and development costs to complete MightyMail version 2.0
would be $170,000. We completed the project in the fourth quarter of 1999, and
the actual costs of completion were not materially different than estimated.

    PARALOGIC SOFTWARE CORPORATION.  In June 1999, we acquired 100% of the
outstanding shares of Paralogic Software Corporation, a provider of Java based
community products and services, such as customizable chat rooms, discussion
boards, guestbooks and event calendars, for $35.4 million in stock and
assumption of stock options. In connection with the Paralogic Software
Corporation acquisition, we acquired Paralogic Software Corporation's product
Anexa.com, a combination of Web site authoring and community building tools that
allows users to instantly create comprehensive Web sites featuring multi-media
albums, discussion forums, events, chat, news announcements, classified ads,
guest books, membership databases and community administration. In connection
with this acquisition we also obtained ParaChat Professional, a chat software
that is licensed to individuals and businesses. This software is hosted by a
server and is supported by a staff of engineers, both of which were acquired in
conjunction with the Paralogic Software Corporation acquisition. This purchase
is in contrast to the purchase of the ParaChat Personal Network, which we
acquired in connection with the purchase of Paralogic Corporation in
March 1998. The ParaChat Personal Network is hosted by us, and is based on a
free chat service that our members can download on to their Web pages. At the
time of acquisition, the current versions of Anexa.com and ParaChat Professional
did not represent the more robust, feature-rich products that

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Paralogic Software Corporation envisioned and intended to develop in the
12 months following the acquisition date.

    As of the date of the technology's valuation, we estimated that 17% of the
research and development effort had been completed at the date of acquisition
and expected the remaining research and development efforts relating to the
completion of the new versions of Anexa.com and ParaChat Professional technology
would require approximately nine months of effort from the date of valuation
through its expected release date in the third quarter of 2000. These projects
will include the use of four engineers, spending 75% of their time on the
project, for 15 months, to create the new versions of the products, at an
estimated total cost to complete of $576,000. Our incurred costs have
approximated our estimates to date.

    In 1998 we completed three acquisitions with a total of $790,000 of
purchased in-process research and development. This includes $330,000 from the
acquisition of Paralogic Corporation in March 1998, $330,000 from the
acquisition of certain assets from Revolutionary Software, Inc. in June 1998 and
$130,000 from the acquisition of Pagecount, Inc. in July 1998.

    AMORTIZATION OF INTANGIBLE ASSETS.  Amortization of intangible assets
totaled $35.8 million during 1999, $1.8 million during 1998 and $0 during 1997.
The additional amortization of intangible assets in 1999 resulted from the
acquisitions of Focused Presence, Inc., MightyMail Networks, Inc., Net
Floppy, Inc., Paralogic Software Corporation, LiquidMarket, Inc. and Private
One, Inc. amortized over periods ranging from 36 to 48 months. The amortization
of intangible assets in 1998 was due to the acquisitions of Paralogic
Corporation, Global Bridges Technologies, Inc., the purchase of substantially
all of the assets of Pagecount, Inc. and the purchase of specific assets of
Revolutionary Software, Inc., amortized over periods ranging from 24 to
42 months. The amortization of intangible assets in 1999 also included
amortization of intangible assets related to NBCi merger transactions, which
included the purchase of Snap and the business related to NBC.com, NBC-IN.com,
and Videoseeker.com, amortized over periods ranging from 36 to 84 months.

    For the acquisitions in 1999 and 1998, we determined the appropriateness of
the estimated useful lives related to the intangible assets based on general and
specific analysis. In general, the Internet is characterized by rapid
technological change, changes in users and customer requirements and
preferences, frequent new product and service introductions and the emergence of
new industry standards and practices.

    With respect to the purchased technology associated with the business and
technology acquisitions, we considered the effects of obsolescence, demand,
competition and other economic factors. Due to the rapid technological change
involved in the Internet, we estimated that new technologies would replace the
intangible assets relating to the purchased technology within periods ranging
from 24 to 48 months.

    With respect to the workforce acquired in connection with the business and
technology acquisitions, we considered expected turnover rates for employees in
Internet companies, and we estimated the life of these intangible assets to be
42 - 48 months.

    With respect to the brand names acquired in connection with the business and
technology acquisitions, we considered the effects of obsolescence, brand
recognition and future earnings potential, and we estimated the life of these
intangible assets to range from 60 to 84 months.

    With respect to the affiliate and other contracts associated with the
business and technology acquisitions, we considered the duration of the
contracts acquired, and we estimated the life of these intangible assets to
range from 36 to 48 months.

    With respect to the goodwill associated with the acquisitions, we considered
the effects of obsolescence, demand, competition, other economic factors and
expected actions of competitors and others. Based on these considerations, we
determined the positive effect of the acquisitions, and therefore the life of
the goodwill, to range from 24 to 84 months.

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    NON-RECURRING CHARGES.  In 1999, in connection with the closing of the NBCi
merger transactions on November 30, 1999, we recorded non-cash, non-recurring
charges of $17.8 million related to the termination of the employment of
Xoom.com's chief executive officer, and the write-off of leasehold improvements
related to facility leases that will be abandoned as a result of the merger
transactions. We did not record any non-recurring charges in 1998. In 1997, we
recorded $1.2 million of non-recurring charges. These charges consisted of a
$243,000 write-off of costs associated with a discontinued product, and a
$1 million provision for a legal dispute for a copyright infringement claim from
Imageline relating to certain clip art that we had licensed from an unrelated
third party.

    INTEREST INCOME.  Interest income represents interest we earned on our cash
investments and on our $340 million note receivable from NBC. We earned
$11 million of interest income in 1999, $187,000 in 1998 and $0 in 1997. The
increase in interest income was primarily due to the increased cash balances
available to invest as a result of proceeds from Xoom.com's initial public
offering in December 1998 and its secondary offering in April 1999, as well as
proceeds from the issuance of 960,028 shares of Xoom.com common stock to NBC in
July 1999, and interest income earned in the month of December on our note
receivable from NBC.

    INTEREST EXPENSE.  Interest expense represents interest charges related to
notes payable, including our two convertible notes payable to NBC that total
$370 million, and capital leases. We incurred $1.4 million in interest expense
in 1999, $135,000 in 1998 and $0 in 1997. The increase in interest expense was
primarily due interest expense incurred in December of 1999 related to the two
convertible notes payable to NBC.

    NET LOSS.  Our net loss was $86.8 million in 1999, $10.8 million in 1998 and
$3.1 million in 1997. The $76.0 million increase during 1999 was primarily
attributable to an increase of $11.9 million in cost of net revenue, an increase
of $4.7 million in operating and development expenses, an increase of
$19.6 million in sales and marketing expenses, an increase of $8.1 million in
general and administrative expenses, an increase of $16.9 million in expenses
for promotion and advertising provided by NBC, and an increase of $34.0 million
in amortization of intangible assets, offset by an increase in net revenue of
$27.3 million. The increase in net loss during 1998 was primarily due to an
increase of $4.4 million cost of net revenue, $9.3 million in total operating
expenses, offset by an increase in net revenues of $7.5 million.

    INCOME TAXES.  There was no provision for federal or state income taxes for
any period as we have incurred operating losses. As of December 31, 1999, we had
net operating loss carryforwards for federal income tax purposes of
approximately $139.3 million and operating loss carryforwards for state income
tax purposes of approximately $80.8 million. We cannot assure you that we will
realize the benefit of the net operating loss carryforwards. The federal net
operating loss carryforwards will expire at various dates beginning in fiscal
year 2011 through 2018 if we do not use them. The state net operating loss
carryforwards will expire at various dates beginning in fiscal year 2003 through
2004. Due to the "change of ownership" provisions of the Internal Revenue Code,
the availability of our net operating loss and credit carryforwards may be
subject to an annual limitation against taxable income in future periods. This
consequence would result if a change in ownership of more than 50% of the value
of our stock should occur over a three-year period, and this could substantially
limit the eventual tax utilization of these carryforwards. See Note 7 of Notes
to Consolidated Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

    We have financed our operations primarily from proceeds received from the
Xoom.com initial public offering in December 1998, secondary offering in
April 1999, as well as proceeds from the issuance of 960,028 shares of common
stock to NBC in July 1999.

    We had cash, cash equivalents and short-term investments of $204.8 million
as of December 31, 1999. We regularly invest excess funds in short-term money
market funds, government securities and commercial paper.

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<PAGE>
    Net cash used in operating activities was $27.7 million during the year
ended December 31, 1999, $3.6 million during the year ended December 31, 1998,
and $1.4 million during the year ended December 31, 1997. Cash used in operating
activities in 1999 was primarily the result of the net loss of $86.8 million and
increases in accounts receivable of $15.0 million and other long-term assets of
$11.9 million related to an increase in our restricted cash balances, partially
offset by non-cash non-recurring charges of $17.8 million and amortization of
intangible assets of $35.8 million, both primarily related to the NBCi merger
transactions, and an increase in accrued compensation and accounts payable of
$28.3 million, both due to the growth of our business. Cash used in operating
activities in 1998 was primarily the result of the net loss of $10.8 million and
an increase in accounts receivable of $1.2 million related to the growth of
advertising revenues, partially offset by amortization of $4.1 million related
to amortization of intangible assets in connection with our acquisitions and
amortization of deferred compensation of incurred in connection with the
granting of options to employees to purchase common stock, an increase in other
accrued liabilities of $1.4 million as a result of the growth of our business,
and a non-cash charge of $1.4 million related to the issuance of warrants in
connection with a loan agreement. Cash used in operating activities in 1997 was
primarily a result of the net loss of $3.1 million, partially offset by an
increase other accrued liabilities of $1.0 million related to a contingency
accrual.

    Net cash used in investing activities was $175.9 million during 1999,
$4.7 million during 1998, and $392,000 during 1997. Cash used in investing
activities was primarily the result of the purchase of investments of
$223.1 million and fixed asset additions of $10.7 million in 1999 and
$2.0 million in 1998, partially offset by the maturity of investments of
$58.6 million in 1999. From time to time, we expect to evaluate the acquisition
of products, businesses and technologies that complement our business. These
acquisitions may involve the use of cash investments. Cash used in investing
activities in 1997 primarily related to fixed asset additions of $392,000.

    Net cash provided by financing activities was $177.1 million during 1999,
$62.8 million during 1998 and $1.8 million during 1997. Cash provided by
financing activities in 1999 was primarily attributable to proceeds from our
secondary stock offering of $167.0 million, as well as proceeds from the
issuance of common stock to NBC of $55.0 million, partially offset by the
repayment of notes payable of $49.9 million. Cash provided by financing
activities in 1998 was primarily attributable to net proceeds from our initial
public offering of $57.3 million, proceeds from the issuance of common stock of
$5.5 million, and the issuance of notes payable of $1.8 million, partially
offset by the repayment of notes payable of $3.2 million. Cash provided by
financing activities in 1997 was primarily from the issuance of common stock of
$1.2 million and proceeds from the repayment of stock subscriptions receivable
of $400,000.

    On February 3, 2000, we completed a follow-on offering of 4,600,000 shares
of our Class A common stock at a price of $81.38 per share. Of the 4,600,000
shares of Class A common stock sold in the offering, 3,650,000 were sold by us
and 950,000 shares of Class A common stock were sold by existing stockholders.
The Company received net proceeds from the offering of approximately
$280.1 million.

    As set forth in the consolidated statements of operations, we experienced
net losses for the years ended December 31, 1999, 1998 and 1997. We believe that
we have the financial resources needed to meet our presently anticipated
business requirements, including capital expenditure and strategic operating
programs, for at least the next 12 months. Thereafter, if cash generated by
operations is insufficient to satisfy our liquidity requirements, we may need to
sell additional equity or debt securities or obtain additional credit
facilities. The sale of additional equity or convertible debt securities may
result in additional dilution to our stockholders. We may not be able to raise
any such capital on terms acceptable to us or at all.

YEAR 2000

    Many currently installed computer systems and software products are coded to
accept only two digit entries in the date code field. As a result, software that
records only the last two digits of the calendar year

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may not be able to distinguish whether "00" means 1900 or 2000. This may result
in software failures or the creation of erroneous results. In addition, computer
programs may fail to recognize February 29, 2000 as a leap year date as a result
of an exception to the calculation of leap years that will occur in the year
2000 and otherwise occurs only once every 400 years. To date we have not
experienced any significant Year 2000 problems in our internal technology
systems or with the vendors of systems we believe to be critical to our
business. In addition, we believe that it is unlikely we will experience any
significant Year 2000 problems in the future. However, there can be no assurance
that residual Year 2000 problems will not materially adversely affect our
results of operations, cash flows or financial position in a particular period.

RECENT ACCOUNTING PRONOUNCEMENTS

    The Emerging Issues Task Force recently issued Issue 99-17, "Accounting for
Advertising Barter Transactions." This issue established accounting and
reporting standards for barter transactions that involve nonmonetary exchange of
advertising. It requires that an entity recognize revenues and expenses from
advertising barter transactions at the fair value of the advertising surrendered
only when an entity has a historical practice of receiving cash for similar
transactions. Management does not believe that EITF 99-17 will have a material
impact on our revenues and expenses.

FACTORS AFFECTING OPERATING RESULTS

    This report on Form 10-K contains forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from those
anticipated by such forward looking statements as a result of certain factors,
including those set forth below.

OUR FAILURE TO SUCCESSFULLY INTEGRATE THE OPERATIONS OF XOOM.COM, SNAP AND THE
INTERNET BUSINESSES CONTRIBUTED BY NBC COULD SERIOUSLY HARM OUR OPERATIONS

    Our success will depend substantially on whether Xoom.com, Snap and the
Internet businesses contributed by NBC can be integrated by us in an efficient
and effective manner. We can provide no assurance that this will occur. The
combination of our online properties will require, among other things, the
technological integration of our Web sites which include NBCi.com, Xoom.com,
Snap.com, NBC.com, NBC-IN.com and VideoSeeker.com and the coordination of the
sales, marketing and research and development efforts of Xoom.com, Snap and the
Internet businesses contributed by NBC.

    Some of the factors contributing to the risks attendant to integration are:

    - difficulties and expenses of integrating operations, technology and
      personnel into our operations while preserving the goodwill of our
      businesses;

    - the additional financial resources that may be needed to fund our
      operations;

    - the potential disruption caused to the businesses of Xoom.com, Snap and
      the Internet businesses contributed by NBC by the need to dedicate
      management and other resources to completing the transactions;

    - our ability to retain employees; and

    - the difficulty of creating and maintaining uniform standards, controls,
      procedures and policies.

    We cannot assure you that we will be able to integrate our businesses
smoothly or successfully. The integration of operations will continue to require
significant management resources, which may distract attention from our
day-to-day operations.

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WE RECORDED ITEMS RELATED TO OUR MERGER IN THE QUARTER ENDED DECEMBER 31, 1999
THAT WILL HAVE A NEGATIVE IMPACT ON OUR FINANCIAL RESULTS IN FUTURE PERIODS

    On November 30, 1999, we completed a transaction accounted for using the
purchase method of accounting whereby the operations of Snap, Xoom.com and
Internet businesses contributed by NBC were merged into our operations. As a
result of the transaction, in the quarter ended December 31, 1999, we recorded
an aggregate of approximately $1.7 billion in intangible assets, which will be
amortized on a straight-line basis over periods ranging from three to seven
years. In addition, in the quarter ended December 31, 1999, we recorded
non-recurring restructuring charges of approximately $17.8 million. The
amortization of intangibles will have a negative impact on our financial
condition and results of operations in future periods.

WE CANNOT ASSURE YOU THAT WE WILL BE PROFITABLE BECAUSE WE HAVE A LIMITED
OPERATING HISTORY AND OUR BUSINESSES ALSO HAVE LIMITED OPERATING HISTORIES AND A
HISTORY OF LOSSES

    We and the businesses that were combined to form us have a limited operating
history. We were launched in November 1999, Xoom.com was founded in April 1996,
the Snap.com Web site was launched in September 1997, and NBC.com, NBC-IN.com
and VideoSeeker.com began operations in August 1995, October 1997 and May 1998,
respectively. NBC launched CNBC.com in June 1999. In addition, Xoom.com, Snap
and the Internet businesses contributed by NBC have not achieved positive annual
operating cashflows, and we expect to incur net losses for the foreseeable
future.

    Because of the limited operating histories of our businesses and the
uncertain nature of the rapidly changing markets we serve, future results of
operations cannot be predicted. Moreover, we have difficulties forecasting our
revenue potential and operating expenses based on the limited historical
financial data of our businesses.

    We currently expect that our operating expenses will continue to increase
significantly as we expand our sales and marketing operations, continue to
build, develop and extend our online brands, fund greater levels of product
development, develop and commercialize additional media properties, and acquire
complementary businesses and technologies. Accordingly, we will need to increase
revenues to be profitable. As a result, we may experience significant losses on
a quarterly and annual basis. If our actual revenue is lower than predicted, we
may be unable to adjust our operating expenses accordingly. If revenues do not
grow as expected or increases in expenses are not in line with forecasts, our
business, results of operations and financial condition could be seriously
harmed. If our operating results in any period fall below the expectations of
securities analysts and investors, the market price of our shares would likely
decline.

OUR BUSINESSES WILL BE SUBJECT TO ALL OF THE RISKS AND DIFFICULTIES FREQUENTLY
ENCOUNTERED BY EARLY STAGE COMPANIES

    The prospects of our businesses are subject to all of the risks and
difficulties frequently encountered by early stage companies in new and rapidly
evolving markets, particularly those involved in the Internet and in e-commerce.
These risks include the following uncertainties and potential adverse
developments:

    - the uncertainty of the level of use of the Internet and online services
      and the acceptance of the Internet and other online services and products
      such as those we offer;

    - the lack of success of our proposed business model on the Internet;

    - our failure to continue to build, develop and extend our online brands;

    - our inability to obtain needed financing;

    - higher than anticipated marketing costs that we will need to incur to
      build, maintain and enhance our online brands;

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    - our inability to generate significant advertising, e-commerce or premium
      service revenue;

    - our inability to maintain and increase levels of traffic and membership on
      our Web sites or to manage rapidly expanding operations effectively;

    - the emergence of new services offered by our competitors that affect the
      level of traffic on our Web sites and our ability to expand our membership
      base;

    - our inability to predict demand for products and services we offer and to
      optimize advertising inventory levels accordingly;

    - our inability to meet minimum guaranteed impressions under advertising
      agreements;

    - our failure to adapt to the mix of types of advertising we will sell and
      developments relating to advertising on the Web;

    - our failure to anticipate and adapt to a developing Internet market and
      increased competition;

    - our inability to upgrade, develop and deploy our network, systems and
      infrastructure and attract new personnel in a timely and effective manner;
      and

    - the failure of our server and networking systems to handle traffic on our
      Web sites efficiently.

THE MAJORITY OF OUR CUSTOMERS ARE INTERNET COMPANIES AND OUR BUSINESS WILL BE
SERIOUSLY HARMED IF THE INTERNET DOES NOT BECOME A VIABLE COMMERCIAL MARKETPLACE

    The majority of our customers are Internet companies that are dependent upon
the acceptance of the Internet as a viable commercial marketplace. If the use of
the Internet for e-commerce transactions and as an advertising medium does not
continue to grow, we could lose a substantial portion of our customer base,
which would seriously harm our business and financial condition.

WE ANTICIPATE OUR BUSINESS WILL FLUCTUATE FROM QUARTER TO QUARTER DUE TO OUR
INITIAL RELIANCE ON SHORT-TERM ADVERTISING AGREEMENTS AND SEASONAL FLUCTUATIONS,
WHICH COULD HARM OUR RESULTS OF OPERATIONS

    Initially, a substantial portion of our net revenue is expected to be from
short-term advertising contracts, usually one to two months in length. That
means our quarterly operating results will be a function of the contracts we
enter into within the quarter and our ability to adjust spending in light of any
net revenue shortfalls. As a result, the cancellation of even a small number of
advertising contracts could significantly affect our operating results. Our
operating expenses are likely to increase significantly over the near term. To
the extent that our expenses increase but our revenues do not, our business,
operating results and financial condition may be seriously harmed.

    Advertising revenues are also subject to seasonal fluctuations.
Historically, advertisers spend less in the first and third calendar quarters
and user traffic on online media properties has been lower during the summer and
during year-end vacation and holiday periods. As a result, we expect our results
of operations to fluctuate throughout the year, which may significantly harm our
business and financial condition.

OUR ADVERTISING REVENUE MAY BE AFFECTED BY THE LOSS OF TRAFFIC ON OUR WEB SITES

    Advertising revenue is linked to the level of traffic on our Web sites, so
if traffic is less than the level expected by our advertising customers, revenue
from this source could be reduced. We will have some advertising contracts that
include a guaranteed minimum number of impressions on our Web sites. Reduced
traffic on our Web sites would cause us to fall short in meeting these minimum
requirements and, as a result, we may give credits to our advertisers and reduce
advertising rates, which would lead to a reduction in our revenue from
advertising.

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OUR FAILURE TO ATTRACT ADVERTISING REVENUE IN QUANTITIES AND AT RATES THAT ARE
SATISFACTORY TO US COULD HARM OUR BUSINESS

    We expect to derive a significant portion of our revenue from the sale of
on-air and online advertisements, including co-branded commercials, banners,
buttons, windows and text links. It is uncertain whether Web advertising will
continue to grow at a rate that will support expansion in our revenue. The
Internet as a marketing and advertising medium has not been available for a
sufficient period of time to gauge accurately its effectiveness as compared with
traditional media. Many of our suppliers and advertisers have only limited
experience with the Web as a marketing and advertising medium.

    The ability to generate significant advertising revenues will depend upon:

    - the development of a large base of users of services possessing
      demographic characteristics attractive to advertisers;

    - the ability to continue to develop and update effective advertising
      delivery and measurement systems; and

    - advertising rates, which may fall based on increased competition from
      online companies and offline media.

    No standards have yet been widely accepted for the measurement of the
effectiveness of Web-based advertising. Advertisers may determine that banner
advertising, which currently comprises a substantial portion of our revenues, is
not an effective advertising medium. If other forms of Web-based advertising
prove more popular than banner advertisements, we may not be able to change our
operations to take advantage of such forms. Advertising filter software programs
are available that limit or remove advertising from an Internet user's desktop.
Such software, if generally adopted by users, may adversely effect the viability
of advertising on the Internet. Our advertising customers may not accept the
internal and third-party measurements of impressions received by advertisements
on our online media properties and such measurements may contain errors. We rely
primarily on our internal advertising sales force for domestic advertising
sales, which involves additional risks and uncertainties, including risks
associated with the recruitment, retention, management, training and motivation
of sales personnel. As a result of these factors, we may not be able to sustain
or increase advertising sales levels. Failure to do so may harm our business,
operating results and financial position.

WE ARE IN A HIGHLY COMPETITIVE INDUSTRY AND SOME OF OUR COMPETITORS MAY BE MORE
SUCCESSFUL IN ATTRACTING AND RETAINING CUSTOMERS

    The market for Internet products and services is highly competitive.
Generally, there are no substantial barriers to entry in these markets; however,
the ability to secure financial resources necessary to promote brand awareness
is increasingly becoming a barrier to entry in the market in which we compete.
We expect that competition will continue to intensify. Negative competitive
developments could seriously harm our business and the trading price of our
Class A common stock. In addition, our competitors may still have superior or
more attractive product offerings.

    We will compete with many other providers of online navigation, information
and community services, such as Yahoo! (including GeoCities and Broadcast.com),
America Online (including AOL.com, Netcenter and ICQ), AltaVista, Excite@Home,
Disney (including the GO Network, which is jointly operated with Infoseek),
Lycos (including HotBot and Tripod) and Microsoft Corporation (including
msn.com).

    Our businesses compete directly with a great number of other Internet sites
and other media companies across a wide range of different online services with
advantages in technical expertise, brand recognition and other factors,
including:

    - metasearch services and software applications that allow a user to search
      the databases of several directories and catalogs simultaneously;

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    - database vendors that offer information search and retrieval capabilities
      with their core database products;

    - Web-based e-mail and instant messaging services either on a stand alone
      basis or integrated into other products and media properties;

    - online merchant hosting services and the entry of an increasing number of
      companies selling goods and services on the Internet;

    - online content Web sites such as ESPN.com and ZDNet.com;

    - online local interactive content Web sites, such as Excite@Home's City
      Guides, Lycos City Guides, America Online's Digital City, Ticketmaster
      Online-CitySearch and Yahoo! Get Local;

    - online video broadcast services, such as CNN VideoSelect, RealNetworks and
      FoxNews;

    - online community Web sites, such as iVillage, Tripod, WhoWhere, GeoCities
      and theglobe.com; and

    - potential new entrants in any one or all of these areas, or new areas not
      considered.

    In order to effectively compete, we may need to expend significant internal
engineering resources or acquire other technologies and companies to provide
such capabilities. Any of these acquisitions could be dilutive to our
stockholders.

    Our carriage agreement with CNET limits CNET's ability to compete with Snap
to provide a broad based information, navigation and content aggregation
service. These restrictions, however, will no longer apply after May 9, 2000. As
a result, CNET could become a competitor of Snap. Competition from CNET could
seriously harm our business.

IF OUR INVESTMENT OF RESOURCES IN DEVELOPING AND PROMOTING OUR ONLINE BRANDS IS
NOT SUCCESSFUL, THE RESULTS OF OUR OPERATIONS COULD BE SERIOUSLY HARMED

    As the number of Internet sites grows, brand recognition will play an
increasingly important role in the success of Internet companies. Establishing
and promoting our online brands in the face of pressures from our competitors
will be critical to further developing our member and user base as well as
various strategic and commercial relationships. We will need to continue to
devote substantial financial and other resources to increase and maintain the
awareness of our online brands among members, advertisers and e-commerce
partners through:

    - Web advertising and marketing;

    - traditional media advertising campaigns in television, print, radio and
      billboards; and

    - providing a high quality user experience.

    For this purpose, we have agreed to purchase at least $405.0 million of
promotional services from NBC over a four-year period to develop and promote our
online brands as well as our products and services. Our results of operations
could be seriously harmed if this investment of financial and other resources in
developing and promoting our online brands does not generate a corresponding
increase in net revenue, or if the expense of developing and promoting our
online brands becomes excessive.

IF FUTURE ACQUISITIONS ARE NOT SUCCESSFUL, OR IF WE ARE NOT ABLE TO STRUCTURE
FUTURE ACQUISITIONS IN A FINANCIALLY EFFICIENT MANNER, THERE COULD BE AN ADVERSE
EFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS

    Acquiring complementary businesses, products and technologies is an integral
part of our business strategy. We are and will continue to be engaged in
exploring potential acquisitions both of publicly traded and private companies.
This acquisition strategy will subject us to integration risks similar to those
we face

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in integrating our current businesses. In addition, the success of the
acquisitions will be dependent upon the ability of our management to maximize
our financial and strategic position when incorporating the technology or
businesses. Any of these risks could prevent us from realizing significant
benefits from our acquisitions.

    In addition, we may invest in business areas in which we do not currently
compete. Such acquisitions represent greater risks as we would be entering
markets, at potentially great expense, where we have little or no direct prior
experience. Accordingly, such acquisitions, if unsuccessful, could have a
significant adverse impact on our financial condition and the price of our
Class A common stock. Even if we believe an acquisition is in our best interest,
investors or securities analysts may disagree and the size of a potential
acquisition could adversely impact the price of our Class A common stock. We may
also engage in other forms of financial transactions such as spin-offs or
initial public offerings of common stock of our subsidiaries. These transactions
or large acquisitions could effectively change our corporate structure, without
providing you an opportunity to vote on the transaction. We cannot assure you
that such acquisition or investment strategies, if implemented, will prove
successful.

    We will face increased competition with other entities for desirable
acquisition targets. Like several of our competitors and other Internet
companies, we expect to issue common stock in future acquisitions. If the market
price of our Class A common stock suffers declines which are disproportionate
relative to our competitors or fails to keep pace with any increases in the
price of the stock of our competitors, we may not be able to compete with other
entities for desirable acquisition candidates. Our inability to acquire
complementary businesses, products and technologies may seriously harm our
business and results of operations.

    In addition, issuing Class A common stock in acquisitions will dilute our
existing stockholders, while the use of cash will deplete cash reserves. We
anticipate that we will be unable to account for future acquisitions under the
"pooling of interests" method of accounting and, therefore, expect to incur
significant, one-time write-offs and amortization charges. These write-offs and
charges would decrease our future earnings or increase our future losses. Due to
all of the foregoing, our inability to structure acquisitions in a financially
efficient manner may seriously harm our business and results of operations.

THE USE OF A COMMUNITY PLATFORM IS UNPROVEN AND DEPENDS ON MAINTAINING AND
EXPANDING OUR MEMBERSHIP BASE; WE DO NOT KNOW WHETHER OUR COMMUNITY PLATFORM
WILL BE VIABLE AND PROFITABLE

    A part of our business model relies on using our community platform and
membership base to generate revenues from different sources. To be profitable,
we will need to provide goods and services that are attractive to our members,
advertisers and vendors. We had previously relied on member-generated content
and the "grassroots" voluntary promotional efforts of our members to develop and
maintain our profile as a community site. A decline in voluntary promotional
activities by the members or member-generated content could make our community
services less attractive.

    We cannot be sure that Internet users will continue to be interested in
communities on the Web, or that direct e-mail marketing will prove to be a
profitable or effective method of selling goods and services.

WE WILL NOT BE ABLE TO SUSTAIN THE RAPID GROWTH OF OUR INTERNET PROPERTIES

    Although Xoom.com and Snap have experienced rapid growth in net revenues,
members, customers and reach in recent periods, these growth rates are likely
not sustainable. These growth rates will likely decrease and are not indicative
of future growth rates we may experience.

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ANY FAILURE OF OUR NETWORK INFRASTRUCTURE COULD SERIOUSLY HARM OUR RESULTS OF
OPERATIONS

    Our success depends upon the capacity, reliability and security of our
networking hardware and software infrastructure. Any failure in our networking
hardware and software infrastructure could significantly and adversely impact
the results of our operations.

    Our businesses have developed systems for maintaining their Web sites,
processing transactions and managing orders internally. If, in the future, we
cannot modify these systems to accommodate increased traffic and an increased
volume of transactions and orders, we could suffer from slower response times,
problems with customer service and delays in reporting accurate financial
information.

    We use network servers that are housed separately by application at Exodus
Communications, Inc. in Santa Clara, California and GlobalCrossing Global Center
in Sunnyvale, California. Our Web sites are connected to the Internet via
multiple links 24 hours a day, seven days per week by Exodus and GlobalCrossing
Global Center. Exodus and GlobalCrossing Global Center also provide and manage
power and maintain the correct environment for our networking and server
equipment. We manage and monitor our servers and network remotely from our
headquarters in San Francisco, California. We strive to rapidly develop and
deploy high-quality tools and features into our systems without interruption or
degradation in service.

    Although agreements with hosting companies will give us remedies for service
interruptions, we cannot guarantee that:

    - we will have uninterrupted access to the Internet;

    - our members and users will be able to reach our Web sites; or

    - communications via our Web sites will be secure.

    Any disruption in the Internet access provided by our hosting companies, or
any interruption in the service that our hosting companies receive from other
providers, or any failure of our hosting companies to handle higher volumes of
Internet users to our Web sites, could seriously harm our business, results of
operations and financial condition.

    Despite precautions taken by our businesses and by the companies that host
our Web sites, our systems are susceptible to natural and man-made disasters
such as earthquakes, fires, floods, power loss and sabotage. Our systems also
may be vulnerable to disruptions from computer viruses and attempts by hackers
to penetrate our network security.

    We are covered by insurance for loss of income from some of the events
listed above, but this insurance may not be adequate to cover all instances of
system failure. We also have insurance against loss of income due to
earthquakes, but the amount of such insurance may be insufficient, especially
given the frequency and magnitude of earthquakes in Northern California where
our primary facilities and servers are located.

    Any of the events listed above could cause interference, delays, service
interruptions or suspensions and seriously harm our business and results of
operations.

    We must continue to expand and adapt our system infrastructure to keep pace
with the increase in the number of members who use the free services we provide.
Demands on infrastructure that exceed our current forecasts could result in
technical difficulties with our Web sites. Any system failure that interferes
with the access to our Web sites and the use of the free services we provide
could diminish the level of traffic on our Web sites. Continuing or repeated
system failures could impair our reputation and our brand names and reduce our
commerce and advertising revenue. At present, we do not know if we will be able
to scale the systems to handle a larger amount of traffic at higher transmission
speeds. Expanding the network infrastructure will require substantial financial,
operational and management resources, all of which could harm our operations.

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    If, in the future, we cannot modify these systems to accommodate increased
traffic and an increased volume of transactions and orders, we could suffer
slower response times, problems with customer service and delays in reporting
accurate financial information. Any of these factors could significantly and
adversely impact the results of our operations.

DIFFICULTIES WE MAY ENCOUNTER IN DEALING WITH OUR GROWTH AND EXPANSION COULD
SERIOUSLY HARM OUR RESULTS OF OPERATIONS

    Our strategy is to continue growing our membership and user base at a rapid
pace. If this growth continues, we will experience a significant strain on our
resources because of:

    - the need to manage relationships with various strategic partners,
      technology licensors, members, advertisers and other third parties;

    - difficulties in hiring and retaining skilled personnel necessary to
      support our businesses;

    - the need to train and manage a growing employee base; and

    - pressures for the continued development of our financial and information
      management systems.

    Difficulties we may encounter in dealing successfully with the above risks
could seriously harm our operations. In addition, in the second quarter of 2000
we expect to move our headquarter facilities to a new facility in San Francisco.
The move could cause disruption of our business or otherwise divert management's
attention, which could harm our financial results.

THE SUCCESSFUL OPERATION OF OUR BUSINESS DEPENDS UPON THE SUPPLY OF CRITICAL
ELEMENTS FROM OTHER COMPANIES

    In addition to the infrastructure, we will depend substantially upon third
parties for several critical elements of our business, including technology,
order fulfillment, content development and distribution activities.

    TECHNOLOGY:  We will continue to license technology and related databases
from third parties for some elements of our properties, including, among others,
technology underlying the delivery of stock quotes and current financial
information, chat services, street mapping, telephone listings and similar
services. We expect to experience interruptions and delays in service and
availability for such elements, from time to time. Furthermore, we will be
dependent on hardware suppliers for prompt delivery, installation and service of
servers and other equipment used to deliver our products and services. Any
errors, failures or delays experienced in connection with these third-party
products and information services could negatively affect our relationship with
users and adversely affect our brands and business, and could expose us to third
party liability.

    ORDER FULFILLMENT:  We continue to rely on other companies for critical
aspects of our e-commerce business. For example, Banta Global Turnkey
Corporation is primarily responsible for fulfilling orders for products and
services sold via our Web sites and in response to direct e-mail marketing. If
our relationship with Banta were to terminate without sufficient advance notice,
our operations would be negatively affected, even if we were able to quickly
establish a relationship with a comparable vendor to fulfill orders. The success
of our specific e-mail direct e-commerce campaigns depends on the timely supply
of inventory by the manufacturers and suppliers of the products we offer for
sale to our members. The failure of the suppliers on whom we depend would
adversely affect the results of our operations.

    CONTENT DEVELOPMENT:  A key element of our strategy involves the
implementation of our branded online properties targeted for specific interest
areas, demographic groups and geographic areas. In these efforts, we rely on
content development and localization efforts of third parties. We cannot
guarantee that the third parties will effectively implement these properties, or
that their efforts will result in significant

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revenue to us. Any failure of these parties to develop and maintain high-quality
and successful media properties also could hurt our brands.

    DISTRIBUTION RELATIONSHIPS:  In order to create traffic for our online
properties and make them more attractive to advertisers and consumers, we expect
to have distribution agreements and informal relationships with leading Web
browser providers and portals, operators of online networks and leading Web
sites, manufacturers of Internet devices and computer manufacturers. These
distribution arrangements typically are not exclusive, and may be terminated
upon little or no notice. Third parties that provide distribution typically
charge fees or otherwise impose additional conditions on the listing of our
online properties. Any failure to cost-effectively obtain distribution could
seriously harm our business, results of operations and financial condition.

PLANNED INTERNATIONAL OPERATIONS ARE SUBJECT TO RISKS THAT COULD SERIOUSLY HARM
OUR RESULTS OF OPERATIONS

    We plan to establish operations or form business partnerships in other parts
of the world. We have very limited experience in international markets and may
not be able to compete effectively in international markets. The expansion of
operations into international markets will require substantial management
attention and financial resources. We cannot be certain that our investment in
establishing operations in other countries will produce desired levels of
revenue. In addition, international operations are subject to other inherent
risks and problems, including:

    - the impact of recessions in economies outside the United States;

    - slower adoption of the Internet by users and advertisers in foreign
      countries;

    - greater difficulty in collecting accounts receivable;

    - higher costs to develop new or specialized content;

    - widely varied and changing regulatory requirements;

    - difficulties and costs of staffing and managing foreign operations;

    - reduced protection for intellectual property rights in some countries;

    - political and economic instability;

    - continued acceptance of the Euro;

    - fluctuations in currency exchange rates; and

    - difficulty in maintaining effective communications due to distance and
      language and cultural barriers.

    Some or all of the above factors could seriously harm our operations.

TO BE SUCCESSFUL IN THE CONTINUALLY EVOLVING MARKET FOR ONLINE SERVICES, WE MUST
CONTINUE TO ENHANCE OUR PROPERTIES AND DEVELOP NEW ONES

    Rapid technological change, changing customer needs, frequent new product
and service introductions and evolving industry standards characterize the
Internet market. These market characteristics could render our existing
services, technology and systems obsolete. We must continually improve the
performance features and reliability of our services to respond to evolving
market demands and competition. Our business, operating results and financial
condition would be seriously harmed if we are unable to respond in a
cost-effective and timely manner to changing market conditions or customer
requirements.

    To remain competitive, we must continue to enhance and improve the
functionality, features and content of our Web sites. We may not be able to
successfully maintain competitive user response times or implement new features
and functions, as these changes will likely involve the development of
increasingly

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complex technologies. Personalized information services, such as our Web-based
e-mail services, message boards, stock portfolios and our community features,
require significantly greater expenses than our general services. We cannot
guarantee that these higher expenses will be offset by additional revenues.

    A key element of our business strategy is the development and introduction
of new branded online properties targeted for specific user groups with
particular demographic characteristics and geographic concentration. We may not
be successful in developing, introducing and marketing such products or media
properties and such properties may not achieve market acceptance, enhance our
brand name recognition or increase user traffic. Furthermore, enhancements of or
improvements to our Web sites or new media properties may contain undetected
errors that require significant design modifications, resulting in a loss of
customer confidence and user support and a decrease in the value of our brand
name. If we fail to effectively develop and introduce new properties, or those
properties fail to achieve market acceptance, our business, results of
operations and financial condition could be seriously harmed.

OUR INABILITY TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS COULD SERIOUSLY HARM
OUR BUSINESS AND FINANCIAL CONDITION

    We view our technology as proprietary and will seek to protect it under
existing United States and international laws relating to protection of
intellectual property. We will also develop internal procedures to control
access to and dissemination of our proprietary information. Despite our
precautions, third parties may succeed in misappropriating our intellectual
property or independently developing similar intellectual property. Protecting
our intellectual property against infringement could result in substantial legal
and other costs and could divert our limited management resources and attention,
any of which could adversely impact our business and the results of our
operations.

    Some of the technology to be incorporated into our Web sites is based on
technology licensed from third parties. As we continue to introduce new
services, we may need to license additional technology. If we are unable to
license needed technology in a timely manner and on commercially reasonable
terms, we could experience delays and reductions in the quality of our services,
all of which could seriously harm our business and results of operations. Our
reputation and the value of our proprietary information could also be adversely
affected by actions of third parties to whom we license our proprietary
information and intellectual property. If someone asserts a claim relating to
proprietary technology or information against us, it may be necessary to seek a
license to such intellectual property. We cannot assure you, however, that we
will be able to obtain such licenses on commercially reasonable terms, if at
all. The failure to obtain any necessary licenses or other rights could
seriously harm our business and results of operations.

    Each of our businesses has been subject to claims that they have allegedly
infringed the proprietary rights of third parties, and we cannot assure you that
third parties will not assert claims against us or our businesses in the future.
These claims, whether or not meritorious, sometimes result in litigation and
could become a drain on our management and financial resources. If successful,
claims of this nature could subject us to liability for money damages as well as
injunctive relief restricting our use of intellectual property important to our
operations, and could ultimately cause us to lose rights to some of our
intellectual property. Any of these events could seriously harm our business and
results of operations.

WE COULD BE SUBJECT TO LIABILITY FOR ONLINE CONTENT THAT MAY NOT BE COVERED BY
OUR INSURANCE

    The nature and breadth of information disseminated on our Web sites and
through the sites of our members could expose us to liability in various areas,
including claims relating to:

    - product information and reviews we offer;

    - the content and publication of various materials based on defamation,
      libel, negligence, personal injury and other legal theories;

    - copyright or trademark infringement and wrongful action due to the actions
      of third parties;

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<PAGE>
    - use of third party content made available through our Web sites or through
      content and material posted by members on their home pages or in chat
      rooms and bulletin boards; and

    - damages arising from the use or misuse of the free e-mail services we will
      offer.

    Claims of these kinds against us could result in us incurring substantial
costs and could also be a drain on our financial and other resources. If the
number or severity of claims of this nature were significant, we would need to
implement measures to reduce our exposure and potential liability. In addition
to being a drain on our resources, this could also require taking measures that
could make our services less attractive to our members and visitors. This in
turn could reduce traffic on our Web sites, negatively impact our member and
user base, and reduce our revenue from e-commerce and advertising. Our general
liability insurance may be insufficient to cover expenses and losses arising in
connection with any claims against us. To the extent our insurance coverage does
not cover liability or expenses we incur, our business and results of operations
would be seriously harmed.

E-COMMERCE ACTIVITIES MAY EXPOSE US TO UNCERTAIN LEGAL RISKS AND POTENTIAL
LIABILITIES

    As part of our business, we will enter into agreements with sponsors,
content providers, service providers and merchants under which we are entitled
to receive a share of revenue from the purchase of goods and services by users
of our Web sites. In addition, we will provide hosting and other services to
online merchants. These types of arrangements may expose us to additional legal
risks and uncertainties, including potential liabilities relating to the
products and services offered by such third parties.

    Although we will maintain liability insurance, insurance may not cover these
claims or may not be adequate. Even to the extent these types of claims do not
result in material liability, investigating and defending claims is expensive
and, if the number or severity of claims defended were significant, this could
seriously harm our business and operations.

WE COULD FACE LIABILITY FROM LEGAL PROCEEDINGS OF XOOM.COM AND SNAP THAT COULD
SERIOUSLY HARM OUR BUSINESS AND RESULTS OF OPERATIONS

    Because Snap and Xoom.com are our wholly owned subsidiaries, claims made
against Snap and Xoom.com will impact our financial condition and results of
operations. An unfavorable outcome in any matters that we are currently
litigating could seriously harm our business and results of operations and the
market price of our Class A common stock. See "Business--Legal Proceedings."

IF OUR CAPITAL IS INSUFFICIENT TO PROMOTE OUR BUSINESS, AND IF WE CANNOT OBTAIN
NEEDED FINANCING, WE WILL BE UNABLE TO PROMOTE OUR BRAND NAMES, EXPLOIT
ACQUISITION OPPORTUNITIES AND OTHERWISE MAINTAIN OUR POSITION RELATIVE TO OUR
COMPETITORS

    We believe we have sufficient capital resources to support our operations at
least for the next 12 months. Nevertheless, we anticipate that we will need to
raise funds to maintain and develop our position in the marketplace. It may be
difficult or impossible for us to obtain financing on favorable terms, if at
all. Neither GE nor its affiliates, including NBC, has made any commitment to
provide financing to us. We cannot assure you that there will be a market for
our securities at any time when we may seek to raise needed funds by equity
financing. Raising funds by issuing equity securities or convertible debt
securities will dilute the percentage ownership of our stockholders, subject to
NBC's exercise of its preemptive rights, and we cannot assure you that an
offering of securities would be completed successfully. Also, new securities we
may issue could have rights senior to the rights of our common stock. If we
cannot obtain needed financing, we could jeopardize our ability to complete the
integration of our Web properties and otherwise meet our business plan and we
will likely be unable to promote our brand names, take advantage of acquisition
opportunities and otherwise maintain our position relative to that of our
competitors, which could seriously harm our business and results of operations.

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IF IMPORTANT STRATEGIC RELATIONSHIPS ARE DISCONTINUED FOR ANY REASON, THERE
WOULD BE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND FINANCIAL CONDITION

    Although strategic relationships are a key factor in our overall business
strategy, our strategic partners may not view their relationships with us as
significant to their own business. There is a risk that parties with whom we
will have strategic alliance agreements may not perform their obligations as
agreed. We expect that our arrangements with strategic partners generally will
not establish minimum performance requirements but instead rely on the voluntary
efforts of our partners. In addition, we expect that most of our agreements with
strategic partners will be terminable by either party with little notice. If
important strategic relationships are discontinued for any reason, our business
and results of operations may be harmed.

RISKS RELATED TO OUR ORGANIZATIONAL STRUCTURE AND OUR RELATIONSHIP WITH NBC

BECAUSE NBC HAS SIGNIFICANT INFLUENCE OVER OUR MANAGEMENT AND STRATEGY, THE
ABILITY OF THE HOLDERS OF OUR CLASS A COMMON STOCK TO DETERMINE THE OUTCOME OF
MATTERS WILL BE REDUCED

    After the secondary offering completed in February 2000, NBC and its
affiliates own approximately 43.9% of our outstanding common stock. If the
convertible notes held by NBC are converted, this ownership interest could
increase up to approximately 49.2%, although such conversion cannot occur until
November 30, 2000. Even before the convertible notes are converted, however,
CNET has agreed to vote its shares of Class A common stock in the same manner as
NBC with respect to change in control transactions involving us, enabling NBC to
determine the outcome of such vote. In addition, NBC and its affiliates have
rights to maintain their percentage ownership in the event of dilutive issuances
of stock by us. As a result, NBC may be able to exercise significant influence
in the future over many matters requiring approval by our stockholders,
including amending our certificate of incorporation and bylaws, the issuance of
additional shares of our Class B common stock or the adoption of a stockholders
rights plan.

    In addition, NBC and its affiliates have the right to elect six of the 13
members of our board of directors, and will retain that right so long as they
own 20% of the outstanding shares of our common stock. Following conversion of
the convertible notes, for so long as NBC and its affiliates own 35% or more of
the outstanding shares of our common stock, NBC and its affiliates will have the
right to elect seven of the 13 members of our board of directors. As long as the
NBC directors do not constitute a majority of our board of directors, several
significant corporate actions by us will require the approval of our directors
appointed by NBC, including a change in control of us or our significant
subsidiaries and significant sales of assets or securities. For as long as there
are any Class B directors, those directors will have the exclusive ability to
remove our chief executive officer and to appoint our chief financial officer
and our general counsel. In addition, Robert C. Wright, the president and chief
executive officer of NBC, serves as our chairman of the board. Many of these
rights are embodied in our certificate of incorporation, and as a result any
amendment will require a vote of our stockholders.

    Because of these rights, NBC has the ability to exert significant influence
over our management and strategy. While our directors appointed by NBC are
obligated by Delaware law to act in the best interests of NBCi and its
stockholders, NBC's views concerning our management and strategy may be
different from the views held by directors appointed by the holders of shares of
our Class A common stock.

NBC WILL BE ABLE TO ENGAGE FREELY IN MANY ACTIVITIES THAT MAY BE COMPETITIVE
WITH OUR BUSINESS

    Under our brand integration and license agreement with NBC, NBC is obligated
not to co-brand the portal, community and e-commerce services of our competitors
with specified NBC marks, and NBC may not operate a general portal service, a
broad-based community service or a broad-based e-commerce service other than
through us. However, apart from the restrictions in the brand integration and
license agreement, our certificate of incorporation provides that NBC has the
right to engage in, and has no duty to refrain from engaging in, the same or
similar activities or lines of business as we do, to do business with

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our potential or actual customers and suppliers and to employ any of our
employees. In the event that NBC learns of a potential corporate opportunity to
both NBC and us, NBC has no duty to communicate or present the opportunity to
our management. NBC will have no liability to us or our stockholders for breach
of any fiduciary duty which may be applicable to NBC as one of our major
stockholders for acquiring or pursuing any corporate opportunity for itself,
directing the opportunity to another person or company, or failing to
communicate information about the opportunity to us.

    Moreover, our certificate of incorporation provides that persons who are
directors or officers of us and also of NBC are deemed to have fully satisfied
their fiduciary duties to us with respect to corporate opportunities of NBC and
NBCi if they act consistently with the policy regarding corporate opportunities
set forth in our certificate of incorporation. In particular, a corporate
opportunity offered to any person who is a director, but not an officer, of us
and who is also a director or officer of NBC belongs to us only if offered in
writing to such person solely in his or her capacity as our director, and
otherwise such corporate opportunity belongs to NBC.

    These provisions are effective for so long as NBC owns at least 20% of our
common stock and at least one person who is one of our directors or officers is
also a director or officer of NBC. In addition, amendment of these provisions of
our certificate of incorporation in a manner adverse to NBC's interests requires
the approval of holders of at least 80% of our outstanding common stock.

    Although as our principal stockholder NBC has a significant financial
interest in our success, NBC also has the objective of maximizing value for its
parent company, General Electric, and the stockholders of GE. There may be
circumstances under which NBC's corporate objectives conflict with our
operations or strategy, and, except as may otherwise be required by law, NBC has
no obligation to act in a manner beneficial to us in the event of such a
conflict. For example, NBC has entered into a distribution and marketing
agreement with ValueVision International, Inc. with respect to its home shopping
and transactional television service, and an affiliate of NBC is a principal
shareholder of ValueVision. NBC is also the parent company of the CNBC cable
channel and owns 90% of CNBC.com LLC. Moreover, NBC distributes its owned and
licensed television programming and other content over a wide array of media in
varied formats, including videostreaming and other methods of distribution of
video content via the Internet, and there is no limitation on its ability to
continue to do so or to develop new methods of distribution or delivery or forms
of content independently from us. In addition, the value of NBC-IN.com will be
dependent on our ability to negotiate content and distribution relationships
with NBC's affiliated television stations, including the 13 stations owned and
operated by NBC. Although NBC is obligated to comply with the terms of the brand
integration and license agreement, we cannot assure you that NBC will not engage
in activities which are competitive with or otherwise negatively affect our
business. Any such action by NBC may seriously harm our business, operating
results and financial condition.

NBC'S RELATIONSHIPS WITH OUR STRATEGIC PARTNERS WILL LIMIT OUR ABILITY TO ENTER
INTO STRATEGIC RELATIONSHIPS AND TO PROVIDE NEWS, INCLUDING SPORTS AND BUSINESS
NEWS, ON OUR WEB SITES

    Our relationships with our existing strategic partners and our future
relationships with partners may limit our ability to enter into other strategic
relationships or provide services that we might otherwise offer on our Web
sites. For example, NBC has a relationship with Microsoft which limits in
significant respects the ability of NBC and its affiliates to provide news,
including sports and business news, on any Web site other than MSNBC.com.
Consequently, our ability to develop and present news content on our sites is
limited, and our efforts must be consistent with these restrictions. In
addition, the ability of NBC and its affiliates to deliver business news video
on an interactive basis via the Internet is restricted by the terms of NBC's
joint ventures with Microsoft and Dow Jones. We may enter into similar or other
non-competition arrangements with strategic partners that may limit our ability
to engage in or provide some activities or services.

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WE WILL BE SIGNIFICANTLY DEPENDENT UPON THE QUALITY OF THE NBC BRAND

    A deterioration in the quality or value of the NBC brand or the termination
of the brand integration and license agreement may seriously harm our business,
operating results and financial condition. Our licensed use of the NBC brand is
a critical aspect of our efforts to retain, attract and expand our user and
advertiser base, both through the advertising and promotion we will purchase on
the NBC television network as well as the inclusion of the NBC brand on our Web
sites. The television industry is characterized by a small number of
participants with significant financial resources and substantial experience in
a wide variety of media, and consequently is extremely competitive. The success
of each television network is often dependent upon its ability to deliver
programming that appeals to viewers. Television programming often requires
substantial lead time to develop and produce, and seasonal network schedules are
typically designed months before actually being aired. This limits a network's
flexibility to alter programming to respond to changes in viewers' tastes. The
relative ranking of television networks fluctuates continuously. Each network
conducts its own research and obtains research from third parties in order to
evaluate its appeal to a complex variety of demographic groups, and each network
uses this information to promote its television programming and negotiate
pricing with advertisers. While NBC has enjoyed significant success in broadcast
and cable television and expects to continue to devote its efforts to continuing
this success, we cannot be assured that NBC television programming will continue
to appeal to viewers generally, or to the particular demographic groups which
are valued by advertisers. Consequently, we cannot predict the extent to which
use of the NBC brand will have a positive effect on our ability to attract users
and advertisers. In addition, NBC may terminate the brand integration and
license agreement if, among other reasons, its percentage ownership in us
declines to 5% or less, or if there is a change in control of us.

THE SIGNIFICANT INFLUENCE OF NBC AND ANTI-TAKEOVER PROVISIONS IN OUR CHARTER
DOCUMENTS COULD NEGATIVELY IMPACT OUR STOCKHOLDERS

    NBC has significant influence with respect to our management and strategy.
As a result of NBC's influence, NBC is able to exercise effective control over
significant corporate transactions which may delay or prevent a change in
control. NBC and its affiliates have enhanced voting rights with respect to the
approval of significant corporate acquisition transactions. In the event that a
third party initiates a tender offer for our common stock or we agree to enter
into any transaction which would result in a change of control, the limitations
on NBC's ability to acquire additional shares in us, to solicit proxies in
connection with an amendment to our certificate of incorporation or for the
election of Class A directors, or to propose to the holders of the Class A
common stock a merger, business combination or similar transaction terminate.
Moreover, NBC can terminate our use of the NBC trademarks and logos in the event
of a change of control of us. Other provisions of our charter documents could
make it more difficult for a third party to acquire us, even if doing so would
be beneficial to our stockholders. Any of these factors could impede or prevent
transactions that would cause a change in control in us. This might discourage
bids for our common stock at a premium over the market price of our common stock
and adversely affect the trading price of our common stock.

MARKET AND INDUSTRY RISKS

ANY INCREASE IN COMPETITION IN THE E-COMMERCE MARKET COULD ADVERSELY AFFECT OUR
ABILITY TO MAINTAIN OR IMPROVE OUR POSITION IN THE MARKET RELATIVE TO THAT OF
OUR COMPETITORS

    We expect intense competition in the e-commerce market from an ever
increasing number of companies selling goods and services over the Internet.
These competitors include: traditional retailers, various mail-order retailers,
Internet-focused retailers, manufacturers that sell directly over the Internet
and many software companies. We expect new competitors to emerge.

                                       44
<PAGE>
    Increased competition from these and other sources could require us to
respond by establishing pricing, marketing and other programs or seeking out
additional strategic alliances or acquisitions that may be less favorable to us
than we otherwise establish or obtain. Such outcomes could seriously harm our
business, prospects, financial condition and results of operations.

MARKET CONSOLIDATION HAS CREATED AND CONTINUES TO CREATE COMPANIES THAT ARE
LARGER AND HAVE GREATER RESOURCES THAN US

    In the recent past, there have been a number of significant acquisitions and
strategic plans announced among and between our competitors, including:

    - America Online's acquisition of Netscape and its proposed merger with Time
      Warner, Inc.;

    - CMGI's acquisition of 83% of AltaVista;

    - Disney's acquisition of the remaining interest in Infoseek not already
      owned by Disney;

    - @Home Network's acquisition of Excite; and

    - Yahoo!'s acquisitions of GeoCities and Broadcast.com.

    The effects these completed and pending acquisitions and strategic plans
have on us cannot be predicted with accuracy, but some of these competitors are
aligned with companies that are larger or more well established than us. In
addition, these competitors include television broadcasters with access to
unique content and substantial marketing resources. As a result, these
competitors may have access to greater financial, marketing and technical
resources than us.

RECENT ALLIANCES HAVE RESULTED IN COMPETITORS OFFERING A BROADER VARIETY OF
INTERNET RELATED SERVICES THROUGH MORE INTEGRATED WEB SITES AND THE USE OF
PROMINENT SEARCH BUTTONS TO DIRECT TRAFFIC, WHICH MAY MAKE IT MORE DIFFICULT FOR
INTERNET USERS TO FIND AND USE OUR PRODUCTS AND ONLINE PROPERTIES

    As discussed above, recent acquisitions and alliances will result in greater
competition as more users of the Internet consolidate to fewer services that
incorporate search and retrieval features. In addition, providers of software
and other Internet products and services are incorporating search and retrieval
features into their offerings. For example, Web browsers offered by Microsoft
and by America Online's Netscape increasingly incorporate prominent search
buttons that direct search traffic to competing services. These features could
make it more difficult for Internet users to find and use our products and
services.

    In the future, Netscape, Microsoft and other browser suppliers may also more
tightly integrate products and services similar to ours into their browsers or
their browsers' pre-set home pages. Microsoft recently announced that it will
feature and promote Internet search services provided by Alta Vista and signed a
long term partnership with LookSmart to provide directory services in the
Microsoft Network and other Microsoft online properties. Such search services
may be tightly integrated into future versions of the Microsoft operating
system, the Internet Explorer browser, and other software applications, and
Microsoft may promote such services within the Microsoft Network or through
other Microsoft affiliated end-user services such as WebTV Networks. Each of
these situations creates a potential competitive advantage over us because
Internet navigational offerings of competitors may be more conveniently accessed
by users.

OUR SUCCESS WILL DEPEND UPON THE GROWTH IN THE USE OF THE INTERNET FOR
E-COMMERCE TRANSACTIONS

    Our future success also depends on the continued growth in the use of the
Internet and the Web for e-commerce transactions. Use of the Internet for retail
transactions is a recent development, and the continued demand and growth of a
market for services and products via the Internet is uncertain. The

                                       45
<PAGE>
Internet may ultimately prove not to be a viable commercial marketplace for a
number of reasons, including:

    - unwillingness of consumers to shift their purchasing from traditional
      retailers to online purchases;

    - lack of acceptable security for data and concern for privacy of personal
      information;

    - limitations on access and ease of use;

    - congestion leading to delayed or extended response times;

    - inadequate development of Web infrastructure to keep pace with increased
      levels of use; and

    - increased or excessive government regulation.

    Because of these factors, we do not know whether our business model will
ultimately be viable and profitable. It is also possible that, in the future,
some Internet access providers will act to block or limit the use of e-mail for
direct e-commerce solicitations, whether at their own initiative or at the
request of users. Our members may also choose not to receive our e-mail
offerings or may fail to respond to such offerings. If these blocking or
limiting programs become popular, there could be a negative effect upon the
viability of e-commerce on the Web and on our business, results of operations
and financial condition.

COMPETITION FOR QUALIFIED PERSONNEL IS INTENSE, AND THE LOSS OF KEY PERSONNEL
AND OUR INABILITY TO ATTRACT AND RETAIN ADDITIONAL QUALIFIED PERSONNEL COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR RESULTS OF OPERATIONS

    Our success depends to a significant degree upon the contributions of our
executive management team, most of whom have not previously worked together, as
well as our technical, marketing and sales personnel. Due to the integration of
the operations of our businesses, our employees may have different job
responsibilities and may be required to work with new people. Accordingly, we
may experience loss of key management and other personnel due to the change in
job responsibilities and work environment. Our employees may voluntarily
terminate their employment with us at any time. Our success also depends upon
our ability to attract and retain additional highly qualified management,
technical, sales and marketing and customer support personnel. Locating
personnel with the combination of skills and attributes required to carry out
our strategy is often a lengthy process. In addition, competition for qualified
employees is intense, specifically in the areas of Web site development, design
and integration. The loss of key personnel, or the inability to attract and
retain additional, qualified personnel, could significantly harm our results of
operations.

THE YEAR 2000 PROBLEM COULD CAUSE OUR SOFTWARE PRODUCTS AND THOSE OF OUR
SUPPLIERS TO MALFUNCTION, WHICH COULD PREVENT OR LIMIT ACCESS TO OUR ONLINE
PROPERTIES AND COULD BE COSTLY TO REMEDY

    Many currently installed computer systems and software products are coded to
accept only two digit entries in the date code field. As a result, software that
records only the last two digits of the calendar year may not be able to
distinguish whether "00" means 1900 or 2000. In addition, computer programs may
fail to recognize February 29, 2000 as a leap year date as a result of an
exception to the calculation of leap years that will occur in the year 2000 and
otherwise occurs only once every 400 years. Residual Year 2000 problems may
result in miscalculations, data corruption, system failures or disruption of
operations. To date we have not experienced any significant Year 2000 problems
in our internal technology systems or with the vendors of systems we believe to
be critical to our business. In addition, we believe that it is unlikely we will
experience any significant Year 2000 problems in the future.

    However, our applications operate in complex network environments and
directly and indirectly interact with a number of other hardware and software
systems. We cannot predict whether Year 2000 unknown errors or defects that
affect the operation of software and systems that we use in operating our
businesses will arise in the future. If residual Year 2000 problems cause the
failure of any of the

                                       46
<PAGE>
technology, software or systems necessary to operate our business, we could lose
customers, suffer significant disruptions in our business, lose revenues and
incur substantial liabilities and expenses. We could also become involved in
costly litigation resulting from Year 2000 problems. This could seriously harm
our business, financial condition and results of operations.

REGULATORY AND LEGISLATIVE RISKS

IMPOSITION OF NEW TAXES OR FEES BY FEDERAL, STATE OR FOREIGN GOVERNMENTS ON
INTERNET TRANSACTIONS OR ON THE USE OF THE INTERNET AS A MEANS OF COMMUNICATION
COULD ADVERSELY AFFECT US

    Imposition of sales or other similar taxes on our sales of merchandise in
states or countries where we ship goods could have a material adverse effect on
our results of operations. Imposition of new taxes or fees by federal, state or
foreign governments on Internet transactions or on the use of the Internet as a
means of communication could also adversely affect us.

PRIVACY CONCERNS, GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES COULD HAVE AN
ADVERSE EFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS

    Laws and regulations that apply directly to communications or commerce over
the Internet are becoming more prevalent. The most recent session of the United
States Congress resulted in Internet laws regarding privacy and the protection
of children, copyrights, taxation and the transmission of sexually explicit
material. The European Union recently enacted its own privacy regulations and
other countries may do so in the future. In addition, new laws may be adopted in
the United States and in other countries covering issues such as music
licensing, broadcast licensing fees and the characteristics and quality of
Internet services. Laws regulating the Internet, however, remain largely
unsettled, even in areas where there has been some legislative action. It may
take years to determine whether and how existing laws that govern intellectual
property, privacy, libel and taxation apply to the Internet. The development of
laws governing these areas, or the application to the Internet of existing laws
not designed for the Internet, may decrease the growth in the use of the
Internet. In addition, the growth and development of the e-commerce market may
prompt calls for more stringent consumer protection laws, both in the United
States and abroad, that may impose additional burdens on companies conducting
business online. The adoption or modification of laws or regulations relating to
the Internet could adversely affect our business.

    The Federal Communications Commission is currently reviewing its regulatory
positions on data transmissions over telecommunications networks and could seek
to impose some form of telecommunications carrier regulation on
telecommunications functions of information services. State public utility
commissions generally have declined to regulate information services, although
the public service commissions of some states continue to review potential
regulation of such services. Future regulation or regulatory changes could have
an adverse effect on our business and results of operations.

TRADING RISKS

OUR STOCK PRICE MAY BE VOLATILE BASED ON A NUMBER OF FACTORS, SOME OF WHICH ARE
NOT IN OUR CONTROL

    The trading price of our Class A common stock has been highly volatile. Our
stock price could be subject to wide fluctuations in response to a variety of
factors, many of which are out of our control, including:

    - actual or anticipated variations in quarterly operating results;

    - announcements of technological innovations;

    - new products or services offered by us or our competitors;

    - changes in financial estimates by securities analysts;

                                       47
<PAGE>
    - conditions or trends in the Internet industry and the portal and community
      services segment in particular;

    - our announcement of significant acquisitions, strategic partnerships,
      joint ventures or capital commitments;

    - additions or departures of key personnel; and

    - sales of common stock by us or our stockholders, which could occur at any
      time after the closing of the transaction.

    In addition, The Nasdaq National Market, where most publicly held Internet
companies are traded, has recently experienced extreme price and volume
fluctuations. These fluctuations often have been unrelated or disproportionate
to the operating performance of these companies. The trading prices of many
Internet companies continue to trade at multiples of earnings or revenues which
are substantially above historic levels. These trading prices and multiples may
not be sustainable. These broad market and industry factors may materially
adversely affect the market price of our Class A common stock, regardless of our
actual operating performance. In the past, following periods of volatility in
the market price of an individual company's securities, securities class action
litigation often has been instituted against that company. This type of
litigation, if instituted, could result in substantial costs and a diversion of
management's attention and resources.

SALES OF SUBSTANTIAL AMOUNTS OF OUR CLASS A COMMON STOCK IN THE OPEN MARKET
COULD LOWER OUR STOCK PRICE

    Sales of a substantial number of our Class A common stock in the public
market, or the belief that such sales could occur, could cause a drop in our
market price and could impair our ability to sell equity or equity securities in
the future at a time and price that we deem appropriate.

    Upon completion of our follow-on offering on February 9, 2000, we had
31,325,545 shares of our Class A common stock outstanding, based on shares
outstanding as of December 31, 1999. Of these shares, a total of 21,374,778
shares are freely tradable without restriction, unless the shares are held by
our "affiliates" as defined under the Securities Act. Of the remaining shares of
Class A common stock, 6,595,063 shares are "restricted securities" within the
meaning of Rule 144 under the Securities Act, of which 97,479 shares are not
saleable under Rule 144 until, at the earliest, November 30, 2000. The remaining
6,497,584 shares held by CNET are subject to a lock-up agreement with Goldman,
Sachs & Co. until October 30, 2000. After this date, these shares are not
saleable under Rule 144 until November 30, 2000. In addition, with limited
exceptions, our officers and directors have agreed that they will not sell,
directly or indirectly, any Class A common stock without the prior written
consent of Goldman, Sachs & Co. until May 3, 2000 (and in the case of one
director with respect to any stock he has received in connection with his
services until February 3, 2001). There are also outstanding 24,550,708 shares
of our Class B common stock held by affiliates of NBC which will not be
available for sale in the public market without registration or an available
exemption from the Securities Act. Upon the sale of Class B common stock by NBC
or its affiliates, such shares will be converted into Class A common stock. NBC,
CNET and Chris Kitze, among others, have entered into a registration rights
agreement with us under which they may register their shares. The exercise by
NBC, CNET or Chris Kitze of these registration rights with respect to a
significant portion of their shares of Class A common stock could substantially
increase the number of shares of Class A common stock available for sale in the
public market.

    We could issue additional shares of Class A common stock upon the closing of
potential acquisitions. In addition, we could issue additional shares of
Class A common stock upon the exercise of outstanding options or warrants. As of
December 31, 1999, there were outstanding options to purchase up to 8,514,299
shares of Class A common stock that will be eligible for sale in the public
market from time to time subject to becoming exercisable and the expiration of
the lock-up agreements, and an additional 4,366,454 shares

                                       48
<PAGE>
of Class A common stock that were reserved for issuance under our 1999 stock
incentive plan and 300,000 shares of Class A common stock were reserved for
issuance under our 1999 employee stock purchase plan. In addition, we must issue
244,004 shares of Class A common stock upon the exercise of a warrant held by
ValueVision International, Inc.

    As a result of these circumstances, if our stockholders sell substantial
amounts of our Class A common stock in the open market, or if the perception is
that such sales could occur, the market price of our Class A common stock could
be depressed and our ability to raise equity capital impaired.

THE TRACES TRANSACTION COULD CAUSE OUR STOCK PRICE TO DECLINE

    The market price volatility of our Class A common stock could increase or
the price could become depressed if investors sell their shares of our Class A
common stock in anticipation of the potential distribution into the market of
additional shares of Class A common stock as a result of the delivery of shares
of Class A common stock under the terms of the Trust Automatic Common Exchange
Securities, or TRACES, by the Automatic Common Exchange Securing Trust, by the
possible sale of shares of Class A common stock by investors who view the TRACES
as a more attractive means of equity participation in us and by hedging or
arbitrage trading activity that may develop involving the TRACES and the
Class A common stock.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    Our exposure to market risk is confined principally to the impact of
interest rate changes and changes in the market values of our investments.

    Our exposure to interest rate risk relates primarily to our portfolio of
short- and long-term cash investments, our note receivable from NBC and our
convertible note payable to NBC. We do not use derivative financial instruments
in our portfolio. We invest primarily in instruments issued by high quality
financial institutions and companies including demand and money market
instruments and debt issued by corporations. All of our investments have
maturities of less than two years. Investments in fixed and floating rate
interest earning instruments carry interest rate risk in that the fair value of
fixed rate securities may be adversely impacted if interest rates rise while
floating rate securities may produce less interest income if interest rates
fall. A hypothetical 100 basis point increase in interest rates would result in
an approximate $2.2 million decrease in the fair value of the Company's debt
securities classified as available-for-sale. Because the interest rates on the
note receivable from NBC and convertible note payable to NBC are fixed, an
increase in interest rates causes the fair value of the note receivable to
decline and the fair value of the convertible note payable to rise and a
decrease in interest rates has the opposite effect. A hypothetical 100 basis
point increase in interest rates would result in a $13.3 million decrease in the
fair value of the note receivable from NBC and a $15.2 million increase in the
fair value of the note payable to NBC.

    We occasionally invest in equity securities of privately held companies for
the promotion of business and strategic objectives. These investments are
generally in companies in the Internet industry. These investments are included
in Long-term investments and are accounted for under the cost method when
ownership is less than 20%. For investments in which no public market exists,
our policy is to regularly review the operating performance, recent financing
transactions and cash flow forecasts for such companies in assessing the net
realizable values of the securities of these companies. We expect to identify
and record impairment losses on long-lived assets when events and circumstances
indicate that such assets might be impaired.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

    The Independent Auditors' Report, Consolidated Financial Statements and
Notes to the Consolidated Financial Statements appear in Part IV of this
Form 10-K.

                                       49
<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE

    Not applicable.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    Information concerning our directors and executive officers is incorporated
by reference to the sections entitled "Proposal No. 1: Election of
Directors--Nominees" and "Management--Executive Officers" contained in NBCi's
definitive Proxy Statement with respect to our 2000 Annual Meeting of
Stockholders to be filed with the Securities and Exchange Commission not later
than 120 days after the end of the fiscal year covered by this Form 10-K (the
"Proxy Statement"). Information concerning compliance with Section 16(a) of the,
Exchange Act of 1934 is incorporated by reference to the section entitled
"Compliance with Section 16(a) of the Exchange Act" contained in our Proxy
Statement.

ITEM 11.  EXECUTIVE COMPENSATION

    Information concerning the executive compensation is incorporated by
reference to the sections entitled "Proposal No. 1: Election of
Directors--Director Compensation," "Management--Summary Compensation Table,"
"Management--Option Grants in Last Fiscal Year," "Management--Aggregate Option
Exercises in Last Fiscal Year and Fiscal Year-End Option Values," and
"Management--Employment Agreements" contained in our Proxy Statement.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    Information concerning the security ownership of certain beneficial owners
and management is incorporated by reference to the section entitled "Information
Concerning Solicitation and Voting Security Ownership of Certain Beneficial
Owners and Management" contained in our Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    Information concerning certain relationships and related transactions is
incorporated by reference to the section entitled "Certain Transactions"
contained in our Proxy Statement.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The following Consolidated Financial Statements of NBC Internet, Inc. and
    the Report of Independent Auditors, as listed under (a) (1) below, are filed
    as a part of this report:

    (1) FINANCIAL STATEMENTS:

<TABLE>
<CAPTION>
                                                                PAGE
                                                              --------
<S>                                                           <C>
Report of Ernst & Young LLP, Independent Auditors...........    F-1
Consolidated Balance Sheets.................................    F-2
Consolidated Statements of Operations.......................    F-3
Consolidated Statements of Stockholders' Equity (Deficit)...    F-4
Consolidated Statements of Cash Flows.......................    F-5
Notes to Consolidated Financial Statements..................    F-7
</TABLE>

                                       50
<PAGE>
    (2) FINANCIAL STATEMENT SCHEDULES:

    The following financial statement schedule of NBC Internet, Inc. is filed as
part of this annual report, and should be read in conjunction with the financial
statements of NBC Internet, Inc.:

    Schedule II Valuation and Qualifying Accounts

    Schedules not listed above have been ommited because they are not applicable
or the required information is shown in the consolidated financial statements or
notes thereto.

<TABLE>
<CAPTION>
                                                                                      SEQUENTIALLY
       EXHIBIT                                                                          NUMBERED
       NUMBER           DOCUMENT                                                          PAGE
---------------------   --------                                                      ------------
<C>                     <S>                                                           <C>
         2.1            Agreement and Plan of Contribution and Merger dated as of
                          May 9, 1999 by and among the Registrant, Xoom.com, Inc.,
                          CNET, Inc., Snap! LLC and Xenon 3, Inc.(1)
         2.2            First Amendment to Agreement and Plan of Contribution and
                          Merger dated as of October 20, 1999 by and among the
                          Registrant, Xoom.com, Inc. CNET, Inc., Snap! LLC and Xenon
                          3, Inc.(1)
         2.3            Second Amended and Restated Agreement and Plan of
                          Contribution, Investment and Merger dated July 8, 1999 by
                          and among the Registrant, National Broadcasting Company,
                          Inc., GE Investments Subsidiary, Inc., Neon Media
                          Corporation and Xoom.com, Inc.(1)
         2.4            First Amendment to Second Amended and Restated Agreement and
                          Plan of Contribution, Investment and Merger dated October
                          20, 1999 by and among the Registrant, National
                          Broadcasting Company, Inc., GE Investments Subsidiary,
                          Inc., Neon Media Corporation and Xoom.com, Inc.(1)
         3.1            Restated Certificate of Incorporation of the Registrant(2)
         3.2            Amended and Restated Bylaws of the Registrant(2)
         4.1            Reference is made to Exhibits 3.1 and 3.2
         4.2            Specimen Stock Certificate of the Registrant(1)
        10.1            Form of Indemnification Agreement between the Registrant and
                          each of its executive officers and directors(1)
        10.2            Agreement of Sublease between Xoom.com, Inc. and Cornerstone
                          Internet Solutions Company d/b/a USWeb Cornerstone dated
                          August 1, 1998(1)
        10.3            Assignment of Lease by Xaos Tools, Inc. and Acceptance of
                          Assignment and Assumption of Lease by Xoom.com, dated July
                          31, 1998(1)
        10.4            Office Lease for One Beach Street, San Francisco, California
                          between No. 1 Beach Street, LLC and CNET, Inc. dated
                          September 24, 1997(1)
        10.5            Governance and Investor Rights Agreement between the
                          Registrant and National Broadcasting Company, Inc.(3)
        10.6            Standstill Agreement between the Registrant and CNET,
                          Inc.(3)
        10.7            Brand Integration and License Agreement between NBC
                          Multimedia, Inc. and National Broadcasting Company, Inc.,
                          dated May 8, 1999(1)
        10.8            Stock Option Agreement between Xoom.com, Inc. and National
                          Broadcasting Company, Inc., dated May 9, 1999(1)
        10.9            Voting Agreement among Xoom.com, Inc., National Broadcasting
                          Company, Inc., CNET, Inc., Chris Kitze and Flying Disc
                          Investments Limited Partnership, dated May 9, 1999(1)
</TABLE>

                                       51
<PAGE>

<TABLE>
<CAPTION>
                                                                                      SEQUENTIALLY
       EXHIBIT                                                                          NUMBERED
       NUMBER           DOCUMENT                                                          PAGE
---------------------   --------                                                      ------------
<C>                     <S>                                                           <C>
        10.10           Voting and Right of First Offer Agreement between National
                          Broadcasting Company, Inc. and CNET, Inc.(3)
        10.11           Loan Agreement between Xoom.com, Inc. and Sand Hill Capital,
                          LLC, dated as of November 3, 1998(1)
        10.12           Amended and Restated Letter Agreement between Bank of
                          America National Trust and Savings Association and Snap!
                          LLC, dated September 14, 1999(1)
        10.13           Agreement of Lease between Eleven Penn Plaza LLC and
                          Xoom.com, Inc., dated March 16, 1999(1)
        10.14           Preferred Carriage Agreement by and between CNET, Inc.,
                          National Broadcasting Company, Inc., NBC Multimedia, Inc.
                          and Snap! LLC., dated June 30, 1998(1)
        10.15           Addendum to Preferred Carriage Agreement between CNET, Inc.
                          and Snap! LLC, dated June 30, 1998(1)
        10.16           Addendum to the Snap Agreements by and among CNET, Inc.,
                          National Broadcasting Company, Inc., NBC Multimedia, Inc.
                          and Snap! LLC., dated May 9, 1999(1)
        10.17           Form of Severance Agreement by and between Xoom.com, Inc.
                          and Laurent Massa(1)
        10.18           1999 Stock Incentive Plan(1)
        10.19           Stock Purchase Agreement by and between Xoom.com, Inc. and
                          National Broadcasting Company, Inc., dated June 11,
                          1999(1)
        10.24           Employment Agreement by and between Xoom.com, Inc. and John
                          Harbottle, dated August 4, 1998(1)
        10.25           Advertising Agreement between the Registrant and National
                          Broadcasting Company, Inc.(3)
        10.26           Registration Rights Agreement by and among the Registrant,
                          CNET, Inc., National Broadcasting Company, Inc., GE
                          Investments Subsidiary, Inc., Flying Disc Investments
                          Limited Partnership and Chris Kitze(3)
        10.27           $39,477,953 Subordinated Zero Coupon Convertible Debenture
                          due 2006(3)
        10.28           $447,416,805 Subordinated Zero Coupon Convertible Debenture
                          due 2006(3)
        10.29           $340,000,000 Term Note(3)
        10.30           Office Lease for 225 Bush Street, San Francisco, California
                          between OAIC Bush Street, LLC and Xoom.com, Inc. dated
                          August 13, 1999(1)
        10.31           Letter Agreement by and between Xoom.com, Inc. and Edmond
                          Sanctis, dated October 19, 1999(3)
        10.32           Letter Agreement by and between Xoom.com, Inc. and Alan
                          Braverman, dated November 12, 1999(4)
        10.33           Letter Agreement by and between Xoom.com, Inc. and John
                          McMenamin, dated November 17, 1999(4)
        10.34           1999 Employee Stock Purchase Plan(4)
        21.1            Subsidiaries of the Registrant(5)
        23.1            Consent of Ernst & Young, LLP, Independent Auditors
        27.1            Financial Data Schedule of NBC Internet, Inc.
</TABLE>

------------------------

(1) Incorporated by reference to the Registrant's Registration Statement on
    Form S-4 (Registration No. 333-82639) on July 12, 1999

                                       52
<PAGE>
(2) Incorporated by reference to the Registrant's Registration Statement on
    Form S-8 (Registration No. 333-91715) on November 29, 1999.

(3) Incorporated by reference to the Registrant's Registration Statement on
    Form S-1 (Registration No. 333-94655) on January 14, 2000.

(4) Incorporated by reference to the Registrant's Registration Statement on
    Form S-1 (Registration No. 333-94655) on January 24, 2000.

(5) Incorporated by reference to the Registrant's Registration Statement on
    Form S-1 (Registration No. 333-94655) on February 2, 2000.

(b) REPORTS ON FORM 8-K

    1.  On December 1, 1999, the Company filed a report on Form 8-K announcing
that it had completed the transactions among itself, CNET, Inc.,
Xoom.com, Inc., Xenon 3, Inc. and Snap! LLC pursuant to the Agreement and Plan
of Contribution and Merger dated May 9, 1999, as well as the transactions among
itself, National Broadcasting Company, Inc., GE Investments Subsidiary, Inc.,
Neon Media Corporation, and Xoom.com pursuant to the Second Amended and Restated
Agreement and Plan of Contribution, Investment and Merger dated July 8, 1999, as
amended on October 20, 1999.

    2.  On December 14, 1999, the Company filed a report on Form 8-K/A-1 related
to the merger transactions among itself, CNET, Inc., Xoom.com, Inc., Xenon
3, Inc. and Snap! LLC, National Broadcasting Company, Inc., GE Investments
Subsidiary, Inc. and Neon Media Corporation. This amendment was filed for the
purpose of including the list of exhibits and should be read in conjunction with
the Form 8-K dated as of December 1, 1999.

    3.  On December 21, 1999, the Company filed a report on Form 8-K/A-2 related
to the merger transactions among itself, CNET, Inc., Xoom.com, Inc., Xenon
3, Inc. and Snap! LLC, National Broadcasting Company, Inc., GE Investments
Subsidiary, Inc. and Neon Media Corporation. This amendment was filed for the
purpose of including financial statements and pro forma financial information
and should be read in conjunction with the Form 8-K dated as of December 1,
1999, and the 8-K/A dated as of December 14, 1999.

                                       53
<PAGE>
                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) 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, in the City of
San Francisco, State of California on the 27th day of March, 2000.

<TABLE>
<S>                                                    <C>  <C>
                                                       NBC INTERNET, INC.

                                                       By:               /s/ CHRIS KITZE
                                                            -----------------------------------------
                                                                           Chris Kitze
                                                                     EXECUTIVE VICE CHAIRMAN
</TABLE>

                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Chris Kitze, Edmond Sanctis and John
Harbottle, and each of them individually, as his attorney-in-fact, each with
full power of substitution, for him in any and all capacities, to sign any and
all amendments to this Report on Form 10-K, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said attorney-in
fact, or his substitutes, may do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons in the capacities and on
the dates indicated.

<TABLE>
<CAPTION>
                      SIGNATURE                                    TITLE                    DATE
                      ---------                                    -----                    ----
<C>                                                    <S>                             <C>
                   /s/ CHRIS KITZE
     -------------------------------------------       Principal Executive Officer     March 27, 2000
                     Chris Kitze                         and Class A Director

                /s/ ROBERT C. WRIGHT
     -------------------------------------------       Chairman of the Board and       March 27, 2000
                  Robert C. Wright                       Class B Director

                 /s/ JOHN HARBOTTLE
     -------------------------------------------       Principal Financial and         March 27, 2000
                   John Harbottle                        Accounting Officer

                 /s/ EDMOND SANCTIS
     -------------------------------------------       Principal Operating Officer     March 27, 2000
                   Edmond Sanctis

               /s/ JAMES J. HEFFERNAN
     -------------------------------------------       Class A Director                March 27, 2000
                 James J. Heffernan

                 /s/ JEFFREY BALLOWE
     -------------------------------------------       Class A Director                March 27, 2000
                   Jeffrey Ballowe
</TABLE>

                                       54
<PAGE>

<TABLE>
<CAPTION>
                      SIGNATURE                                    TITLE                    DATE
                      ---------                                    -----                    ----
<C>                                                    <S>                             <C>
                 /s/ PHILIP SCHLEIN
     -------------------------------------------       Class A Director                March 27, 2000
                   Philip Schlein

             /s/ ROBERT C. HARRIS, JR.
     -------------------------------------------       Class A Director                March 27, 2000
               Robert C. Harris, Jr.

                  /s/ L. LOWRY MAYS
     -------------------------------------------       Class A Director                March 27, 2000
                    L. Lowry Mays

                  /s/ MARK W. BEGOR
     -------------------------------------------       Class B Director                March 27, 2000
                    Mark W. Begor

     -------------------------------------------       Class B Director                March 27, 2000
                   Gary M. Reiner

                 /s/ SCOTT M. SASSA
     -------------------------------------------       Class B Director                March 27, 2000
                   Scott M. Sassa

     -------------------------------------------       Class B Director                March 27, 2000
                    John F. Welch

               /s/ MARTIN J. YUDKOVITZ
     -------------------------------------------       Class B Director                March 27, 2000
                 Martin J. Yudkovitz
</TABLE>

                                       55
<PAGE>
                               NBC INTERNET, INC.
                                  SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)

ALLOWANCE FOR DOUBTFUL ACCOUNTS:

<TABLE>
<CAPTION>
                                                   ADDITIONS-   BALANCES ACQUIRED
                                    BALANCES AT    CHARGED TO   IN CONNECTION WITH                BALANCES AT
                                    BEGINNING OF   COSTS AND       NBCI MERGER       DEDUCTIONS     END OF
                                       PERIOD       EXPENSES       TRANSACTIONS      WRITE-OFFS     PERIOD
                                    ------------   ----------   ------------------   ----------   -----------
<S>                                 <C>            <C>          <C>                  <C>          <C>
Year ended December 31, 1999......       $195         $891             $936             $(282)       $1,740
                                         ====         ====             ====             =====        ======
Year ended December 31, 1998......       $ 49         $269             $ --             $(123)       $  195
                                         ====         ====             ====             =====        ======
Year ended December 31, 1997......       $ --         $ 49             $ --             $  --        $   49
                                         ====         ====             ====             =====        ======
</TABLE>

                                       56
<PAGE>
               REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors and Stockholders
NBC Internet, Inc.

    We have audited the accompanying consolidated balance sheets of NBC
Internet, Inc. as of December 31, 1999 and 1998, and the related consolidated
statements of operations, stockholders' equity (deficit) and cash flows for each
of the three years in the period ended December 31, 1999. Our audits also
included the financial statement schedule listed in the Index at Item 14(a).
These financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

    In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
NBC Internet, Inc. at December 31, 1999 and 1998, and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended December 31, 1999 in conformity with accounting principles generally
accepted in the United States. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.

                                          /s/ Ernst & Young LLP

Palo Alto, California
January 26, 2000
<PAGE>
                               NBC INTERNET, INC.

                          CONSOLIDATED BALANCE SHEETS

                        (IN THOUSANDS, EXCEPT PAR VALUE)

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                              ---------------------
                                                                 1999        1998
                                                              ----------   --------
<S>                                                           <C>          <C>
ASSETS
Current assets:
  Cash and cash equivalents.................................  $   28,095   $ 54,575
  Short-term investments....................................     176,669      2,000
  Accounts receivable, net of allowance for doubtful
    accounts of $1,740 and $195 in 1999 and 1998,
    respectively............................................      17,223      1,368
  Note receivable from NBC, current portion.................      78,288         --
  Other current assets......................................       8,916        630
                                                              ----------   --------
Total current assets........................................     309,191     58,573
Fixed assets, net...........................................      18,096      2,071
Goodwill, net...............................................   1,646,054      3,751
Other intangibles assets, net...............................     113,419      1,766
Investment in CNBC.com......................................      68,500         --
Other long-term investments.................................      63,601         --
Long-term note receivable from NBC, less current portion....     261,712         --
Other assets, including restricted cash of $8,990 in 1999...      13,523        713
                                                              ----------   --------
Total assets................................................  $2,494,096   $ 66,874
                                                              ==========   ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................  $   15,687   $  1,229
  Accrued compensation and related expenses.................      15,293        497
  Accrued merger costs......................................      11,604         --
  Other accrued liabilities.................................       7,785      2,531
  Amounts due to related parties............................      41,792         --
  Deferred revenue..........................................      18,943        443
  Notes payable and capital lease obligations, current
    portion.................................................         238      1,313
                                                              ----------   --------
Total current liabilities...................................     111,342      6,013
                                                              ----------   --------
  Convertible notes payable less unamortized discount due to
    NBC and its affiliates..................................     371,233         --
  Deferred revenue, less current portion....................      11,332         --
  Notes payable and capital lease obligations, less current
    portion.................................................         405        528
                                                              ----------   --------
Long-term liabilities.......................................     382,970        528
                                                              ----------   --------
Stockholders' equity:
  Preferred stock, $0.0001 par value;
    Authorized shares--10,000
    Issued and outstanding shares--none in 1999 and 1998....          --         --
  Class A Common stock, $0.0001 par value:
    Authorized Shares--100,000
    Issued and outstanding shares--27,676 and 13,700 in 1999
      and 1998, respectively................................     942,770     75,606
  Class B Common stock, $0.0001 par value:
    Authorized Shares--100,000
    Issued and outstanding shares--24,551 and none in 1999
      and 1998, respectively................................   1,158,336         --
  Notes receivable from stockholders........................        (995)
  Accumulated other comprehensive income....................       4,994         --
  Deferred compensation.....................................      (4,121)      (904)
  Accumulated deficit.......................................    (101,200)   (14,369)
                                                              ----------   --------
Total stockholders' equity..................................   1,999,784     60,333
                                                              ----------   --------
Total liabilities and stockholders' equity..................  $2,494,096   $ 66,874
                                                              ==========   ========
</TABLE>

                            See accompanying notes.

                                      F-2
<PAGE>
                               NBC INTERNET, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net revenue:
  Advertising...............................................  $ 19,953   $  2,144   $    60
  E-commerce and other......................................    15,628      6,174       781
                                                              --------   --------   -------
Total net revenue...........................................    35,581      8,318       841
Cost of net revenue:
  Cost of advertising.......................................     6,296      1,385       333
  Cost of e-commerce and other..............................    10,504      3,542       171
                                                              --------   --------   -------
Cost of net revenue.........................................    16,800      4,927       504
Gross profit................................................    18,781      3,391       337
Operating expenses:
  Operating and development.................................     7,674      2,939       965
  Sales and marketing.......................................    21,951      2,393       292
  General and administrative................................    11,482      3,366       721
  Promotion and advertising provided by NBC.................    16,858         --        --
  Amortization of deferred compensation.....................       963      1,416       248
  Purchased in-process research and development.............     2,603        790        --
  Amortization of intangible assets.........................    35,822      1,843        --
  Non-recurring charges.....................................    17,801         --     1,243
                                                              --------   --------   -------
Total operating expenses....................................   115,154     12,747     3,469
                                                              --------   --------   -------
Loss from operations........................................   (96,373)    (9,356)   (3,132)
Other income (expense):
  Interest income...........................................    10,963        187        --
  Interest expense..........................................    (1,421)      (135)       --
  Interest expense related to warrant.......................        --     (1,494)       --
                                                              --------   --------   -------
Net loss....................................................  $(86,831)  $(10,798)  $(3,132)
                                                              ========   ========   =======
Net loss per share--basic and diluted.......................  $  (4.26)  $  (1.37)  $ (0.64)
                                                              ========   ========   =======
Number of shares used in per share calculation--basic and
  diluted...................................................    20,386      7,879     4,874
                                                              ========   ========   =======
</TABLE>

                            See accompanying notes.

                                      F-3
<PAGE>
                               NBC INTERNET, INC.
           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                       (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                                            COMMON STOCK
                                           -----------------------------------------------      NOTES
                                                   SHARES                   AMOUNT            RECEIVABLE
                                           -----------------------   ---------------------       FROM         DEFERRED
                                            CLASS A      CLASS B     CLASS A     CLASS B     STOCKHOLDERS   COMPENSATION
                                           ----------   ----------   --------   ----------   ------------   -------------
<S>                                        <C>          <C>          <C>        <C>          <C>            <C>
Balances at December 31, 1996............   3,333,335           --   $  1,000   $       --      $  --          $    --
                                           ----------   ----------   --------   ----------      -----          -------
  Issuance of common stock for cash......   1,914,452           --      1,223           --         --               --
  Issuance of common stock in exchange
    for cancellation of notes payable to
    stockholders.........................      38,889           --         35           --         --               --
  Issuance of common stock in exchange
    for stock subscription receivable....     254,691           --        175           --         --               --
  Issuance of stock options to
    consultants..........................          --           --         17           --         --               --
  Deferred compensation related to grant
    of stock options.....................          --           --        551           --         --             (551)
  Amortization of deferred
    compensation.........................          --           --         --           --         --              248
  Net loss...............................          --           --         --           --         --               --
                                           ----------   ----------   --------   ----------      -----          -------
Balances at December 31, 1997............   5,541,367           --      3,001           --         --             (303)
  Issuance of common stock for cash, net
    of issuance costs of $139............   1,815,432           --      5,532           --         --               --
  Issuance of common stock in exchange
    for Classic Media Holdings license
    rights...............................      43,292           --        100           --         --               --
  Issuance of common stock in connection
    with acquisitions....................   1,221,992           --      4,219           --         --               --
  Issuance of common stock in exchange
    for cancellation of notes payable to
    stockholders.........................      64,937           --        150           --         --               --
  Issuance of common stock in exchange
    for stock subscription receivable....      78,224           --        261           --         --               --
  Issuance of common stock to directors
    and consultants in exchange for
    services.............................      19,564           --        205           --         --               --
  Issuance of stock options to
    consultants..........................          --           --        238           --         --               --
  Issuance of common stock in intial
    public offering, net of offering
    costs of $7,059......................   4,600,000           --     57,341           --         --               --
  Issuance of common stock upon exercise
    of warrants, net of issuance costs of
    $28..................................     314,747           --      1,048           --         --               --
  Issuance of warrant in connection with
    loan agreement.......................          --           --      1,494           --         --               --
  Deferred compensation related to grant
    of stock options.....................          --           --      2,017           --         --           (2,017)
  Amortization of deferred
    compensation.........................          --           --         --           --         --            1,416
  Net loss...............................          --           --         --           --         --               --
                                           ----------   ----------   --------   ----------      -----          -------
Balances at December 31, 1998............  13,699,555           --     75,606           --         --             (904)
  Issuance of common stock upon exercise
    of warrants..........................     116,231           --         --           --         --               --
  Issuance of common stock for purchase
    acquisitions.........................   9,265,640   23,590,680    667,541    1,103,336         --               --
  Issuance of common stock in connection
    with follow-on offering, net of
    issuance costs of $8,950.............   2,659,800           --    166,597           --         --               --
  Issuance of common stock to directors
    and consultants in exchange for
    services.............................      17,967           --        758           --         --               --
  Issuance of warrants in connection with
    ValueVision strategic alliance.......          --           --      6,937           --         --               --
  Issuance of common stock upon exercise
    of options...........................   1,916,352           --      5,445           --         --               --
  Issuance of common stock for cash......     960,028           --     55,000           --         --               --
  Conversion of common stock issued to
    NBC..................................    (960,028)     960,028    (55,000)      55,000         --               --
  Acceleration of options related to
    termination of Xoom.com officer......          --           --     15,706           --         --               --
  Notes receivable from stockholders
    assumed in acquisition...............          --           --         --           --       (995)              --
  Deferred compensation related to grant
    of stock options.....................          --           --      4,180           --         --           (4,180)
  Amortization of deferred
    compensation.........................          --           --         --           --         --              963
  Comprehensive income:
    Net loss.............................          --           --         --           --         --               --
    Unrealized gain on securities........          --           --         --           --         --               --
  Comprehensive income...................          --           --         --           --         --               --
                                           ----------   ----------   --------   ----------      -----          -------
Balances at December 31, 1999............  27,675,545   24,550,708   $942,770   $1,158,336      $(995)         $(4,121)
                                           ==========   ==========   ========   ==========      =====          =======

<CAPTION>

                                                           ACCUMULATED
                                                              OTHER            TOTAL
                                           ACCUMULATED    COMPREHENSIVE    STOCKHOLDERS'
                                             DEFICIT          INCOME          EQUITY
                                           ------------   --------------   -------------
<S>                                        <C>            <C>              <C>
Balances at December 31, 1996............   $    (439)        $   --        $      561
                                            ---------         ------        ----------
  Issuance of common stock for cash......          --             --             1,223
  Issuance of common stock in exchange
    for cancellation of notes payable to
    stockholders.........................          --             --                35
  Issuance of common stock in exchange
    for stock subscription receivable....          --             --               175
  Issuance of stock options to
    consultants..........................          --             --                17
  Deferred compensation related to grant
    of stock options.....................          --             --                --
  Amortization of deferred
    compensation.........................          --             --               248
  Net loss...............................      (3,132)            --            (3,132)
                                            ---------         ------        ----------
Balances at December 31, 1997............      (3,571)            --              (873)
  Issuance of common stock for cash, net
    of issuance costs of $139............          --             --             5,532
  Issuance of common stock in exchange
    for Classic Media Holdings license
    rights...............................          --             --               100
  Issuance of common stock in connection
    with acquisitions....................          --             --             4,219
  Issuance of common stock in exchange
    for cancellation of notes payable to
    stockholders.........................          --             --               150
  Issuance of common stock in exchange
    for stock subscription receivable....          --             --               261
  Issuance of common stock to directors
    and consultants in exchange for
    services.............................          --             --               205
  Issuance of stock options to
    consultants..........................          --             --               238
  Issuance of common stock in intial
    public offering, net of offering
    costs of $7,059......................          --             --            57,341
  Issuance of common stock upon exercise
    of warrants, net of issuance costs of
    $28..................................          --             --             1,048
  Issuance of warrant in connection with
    loan agreement.......................          --             --             1,494
  Deferred compensation related to grant
    of stock options.....................          --             --                --
  Amortization of deferred
    compensation.........................          --             --             1,416
  Net loss...............................     (10,798)            --           (10,798)
                                            ---------         ------        ----------
Balances at December 31, 1998............     (14,369)            --            60,333
  Issuance of common stock upon exercise
    of warrants..........................          --             --                --
  Issuance of common stock for purchase
    acquisitions.........................          --             --         1,770,877
  Issuance of common stock in connection
    with follow-on offering, net of
    issuance costs of $8,950.............          --             --           166,597
  Issuance of common stock to directors
    and consultants in exchange for
    services.............................          --             --               758
  Issuance of warrants in connection with
    ValueVision strategic alliance.......          --             --             6,937
  Issuance of common stock upon exercise
    of options...........................          --             --             5,445
  Issuance of common stock for cash......          --             --            55,000
  Conversion of common stock issued to
    NBC..................................          --             --                --
  Acceleration of options related to
    termination of Xoom.com officer......          --             --            15,706
  Notes receivable from stockholders
    assumed in acquisition...............          --             --              (995)
  Deferred compensation related to grant
    of stock options.....................          --             --                --
  Amortization of deferred
    compensation.........................          --             --               963
  Comprehensive income:
    Net loss.............................     (86,831)            --           (86,831)
    Unrealized gain on securities........          --          4,994             4,994
                                            ---------         ------        ----------
  Comprehensive income...................     (86,831)         4,994           (81,837)
                                            ---------         ------        ----------
Balances at December 31, 1999............   $(101,200)        $4,994        $1,999,784
                                            =========         ======        ==========
</TABLE>

                            See accompanying notes.

                                      F-4
<PAGE>
                               NBC INTERNET, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Cash used in operating activities:
  Net loss..................................................  $(86,831)  $(10,798)  $(3,132)
  Adjustments to reconcile net loss to net operating
    activities:
    Depreciation and amortization...........................    39,166      4,055       502
    Purchased in-process research and development...........     2,603        790        --
    Non-recurring charges...................................    17,801         --        --
    Issuance of common stock and stock options to directors
      and consulants........................................       758        443        17
    Receipt of equity interests in exchange for services
      provided..............................................    (2,217)        --        --
    Loss on disposal of fixed assets........................       201         --        --
    Interest expense related to warrant.....................        --      1,494        --
    Issuance of common stock in exchange for Classic Media
      Holding license rights................................        --        100        --
    Write-off of prepaid royalties..........................        --         --       243
    Changes in operating assets and liabilities, net of
      business combinations:
      Accounts receivable...................................   (15,012)    (1,167)     (173)
      Other current assets..................................    (3,560)    (1,051)     (187)
      Other assets..........................................   (11,879)      (445)      (41)
      Accounts payable......................................    13,454        762       326
      Accrued compensation and related expenses.............    14,796        418        29
      Accrued merger costs..................................    11,538         --        --
      Other accrued liabilities.............................   (14,742)     1,403     1,005
      Deferred revenue......................................     6,239        443        --
                                                              --------   --------   -------
  Net cash used in operating activities.....................   (27,685)    (3,553)   (1,411)
Cash used in investing activities:
  Purchases of fixed assets.................................   (10,731)    (1,954)     (392)
  Purchase of short-term and long-term investments..........  (223,135)    (2,000)       --
  Maturities of short-term and long-term investments........    58,600         --        --
  Business combinations, net of cash acquired...............      (678)      (458)       --
  Cash paid in connection with the purchase of certain
    assets from Revolutionary Software, Inc.................        --       (273)       --
                                                              --------   --------   -------
  Net cash used in investing activities.....................  (175,944)    (4,685)     (392)
Cash provided by financing activities:
  Proceeds from issuance of common stock....................   221,597     62,873     1,223
  Proceeds from exercise of stock options...................     5,445         --        --
  Proceeds from exercise of warrants........................        --      1,048        --
  Proceeds from issuance of notes payable to stockholders...        --         --       185
  Proceeds from repayment of stock subscriptions
    receivable..............................................        --        335       400
  Proceeds from notes payable...............................        --      1,762        --
  Repayment of notes payable................................   (49,893)    (3,211)       --
                                                              --------   --------   -------
  Net cash provided by financing activities.................   177,149     62,807     1,808
  Net increase in cash and cash equivalents.................   (26,480)    54,569         5
  Cash and cash equivalents at beginning of year............    54,575          6         1
                                                              --------   --------   -------
  Cash and cash equivalents at end of year..................  $ 28,095   $ 54,575   $     6
                                                              ========   ========   =======
</TABLE>

                            See accompanying notes.

                                      F-5
<PAGE>
                               NBC INTERNET, INC.

                CONSOLIDATED SUPPLEMENTAL CASH FLOW INFORMATION

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                           ------------------------------------
                                                              1999         1998         1997
                                                           ----------   ----------   ----------
<S>                                                        <C>          <C>          <C>
SUPPLEMENTAL DISCLOSURES:
NON-CASH TRANSACTIONS:

  Issuance of common stock in conjuction with business
    and technology acquisitions..........................  $1,769,682   $    4,218   $       --
                                                           ==========   ==========   ==========
  Issuance of notes payable in conjunction with business
    and technology acquisitions..........................  $  370,000   $    3,106   $       --
                                                           ==========   ==========   ==========
  Investments in corporate securities received in
    connection with media contracts......................  $   28,903   $       --   $       --
                                                           ==========   ==========   ==========
  Value of warrant received in connection with
    ValueVision International, Inc. strategic alliance...  $    6,343   $       --   $       --
                                                           ==========   ==========   ==========
  Value of warrant issued in connection with ValueVision
    International, Inc. strategic alliance...............  $    6,937   $       --   $       --
                                                           ==========   ==========   ==========
  Deferred compensation resulting from grant of stock
    options..............................................  $    4,180   $    2,017   $      551
                                                           ==========   ==========   ==========
  Fixed assets acquired under capital lease obligation...  $      125   $      165   $       --
                                                           ==========   ==========   ==========
  Issuance of common stock in exchange for stock
    subscriptions receivable.............................  $      995   $      261   $      175
                                                           ==========   ==========   ==========
  Common stock issued to satisfy Paralogic legal
    obligation...........................................  $       --   $      165   $       --
                                                           ==========   ==========   ==========

CASH FLOW INFORMATION:
  Cash paid for interest.................................  $      425   $       57   $       --
                                                           ==========   ==========   ==========
</TABLE>

                            See accompanying notes.

                                      F-6
<PAGE>
                               NBC INTERNET, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

THE COMPANY

    NBC Internet, Inc. ("NBCi" or the "Company") is an integrated media company
that combines portal, community, online, television and radio advertising and
e-commerce services designed to deliver a comprehensive, next generation online
experience to a global audience. The Company derives revenues primarily from
online and on-air advertising and e-commerce.

    NBCi (formerly known as Xoom.com, Inc. ("Xoom.com")) was formed as the
result of several transactions that occurred on November 29 and 30 of 1999,
pursuant to which Xoom.com and SNAP! LLC ("Snap") became wholly-owned
subsidiaries of NBCi, and NBCi became the owner of the businesses related to
NBC.com, NBC-IN.com and VideoSeeker.com ("NBC Multimedia Division") and a 10%
ownership interest in CNBC.com LLC. Xoom.com was treated as the accounting
acquiror and the financial information in the accompanying financial statements
include Xoom.com's results for the years ended December 31, 1997 and 1998, the
11 months ended November 30, 1999, and the consolidated results of operations of
Xoom.com, Snap and NBC Multimedia for the one month ended December 31, 1999.

BASIS OF PRESENTATION

    The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation.

DEPENDENCE ON VENDORS

    The Company currently depends on one vendor to provide substantially all
warehousing and order fulfillment. Although the Company believes that there are
alternative vendors for warehousing and order fulfillment, there can be no
assurance that the Company will maintain its relationship with this vendor as
the agreement is cancelable at any time. The loss of this relationship could
have a material adverse effect on the Company's financial condition and results
of operations.

    During 1999, the Company entered into a four-year agreement with NBC to be
the Company's exclusive provider of television advertising. Although the Company
believes that there are alternative vendors for television advertising, there
can be no assurance that the Company will maintain its relationship with NBC as
the agreement is cancelable upon a material breach by either NBC or the Company.
The loss of this relationship could have a material adverse effect on the
Company's financial condition and results of operations.

USE OF ESTIMATES

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

CASH EQUIVALENTS AND INVESTMENTS

    The Company considers investments in highly liquid instruments purchased
with original maturities of 90 days or less to be cash equivalents. Investments
with maturities of greater than 90 days and one year or less are classified as
short-term investments. Investments with maturities of greater than one year are
classified as long-term investments. A substantial portion of the Company's
investments are classified as

                                      F-7
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
available-for-sale and carried at fair value, with unrealized gains and losses
recorded in accumulated other comprehensive income in stockholders' equity. The
cost of securities sold is based on the specific identification method. Realized
gains and losses upon sale or maturity of these investments are reported in
other income or expense.

    The Company invests in equity instruments of privately-held internet
companies for the promotion of business and strategic objectives. These
investments are included in long-term investments and are accounted for under
the cost method when ownership is less than 20% and there are no indicators of
control. For these non-quoted investments, the Company regularly reviews
operating performance, financing status, liquidity prospects and cash flow
forecasts in assessing carrying values. Impairment losses are recorded when
events and circumstances indicate that such assets might be impaired and the
decline in value is other than temporary. To date, no such losses have been
recorded.

CONCENTRATION OF CREDIT RISK AND CREDIT EVALUATIONS

    Financial instruments which subject the Company to concentrations of credit
risk consist primarily of cash, cash equivalents, short and long-term
investments and accounts receivable. The Company maintains substantially all of
its cash, cash equivalents and short and long-term investments with four
financial institutions. The Company conducts business with companies in various
industries throughout the world and with individuals over the Internet. The
Company performs ongoing credit evaluations of its corporate customers and
generally does not require collateral. Sales to individuals are principally paid
for with credit cards. Reserves are maintained for potential credit losses, and
such losses to date have been within management's expectations. The Company
recorded $866,000, $269,000 and $49,000 for allowance for doubtful accounts in
operations for the years ended December 31, 1999, 1998 and 1997, respectively.

FIXED ASSETS

    Fixed assets are stated at cost less accumulated depreciation and
amortization. Depreciation is computed using the straight-line method over the
respective estimated useful lives of the assets. Estimated useful lives of the
Company's fixed assets range between 2 to 5 years. Fixed assets under capital
leases are amortized over the shorter of the estimated useful life or the life
of the lease. The Company identifies and records impairment losses on fixed
assets when events and circumstances indicate that such assets might be
impaired. During 1999 the Company wrote-off leasehold improvements related to
facility leases that will be abandoned as a result of the NBCi merger
transactions. There were no write-offs of fixed assets during 1998.

                                      F-8
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
GOODWILL AND OTHER INTANGIBLE ASSETS

    Intangible assets consisted of the following at December 31, (in thousands):

<TABLE>
<CAPTION>
                                                                           LIFE
                                                     1999       1998     (MONTHS)
                                                   --------   --------   --------
<S>                                                <C>        <C>        <C>
Purchased technology.............................  $ 46,489    $2,357    24 - 48
License to use brand names.......................    34,200        --    60 - 84
Affiliate and other contracts....................    31,400        --    36 - 48
Acquired workforce...............................     3,802        --    42 - 48
                                                   --------    ------
Intangible assets................................   115,891     2,357
Accumulated amortization.........................    (2,472)     (591)
                                                   --------    ------
Intangible assets, net...........................  $113,419    $1,766
                                                   ========    ======
</TABLE>

<TABLE>
<CAPTION>
                                                                            LIFE
                                                     1999        1998     (MONTHS)
                                                  ----------   --------   --------
<S>                                               <C>          <C>        <C>
Goodwill........................................  $1,681,922    $5,003    24 - 84
Accumulated amortization........................     (35,868)   (1,252)
                                                  ----------    ------
Goodwill, net...................................  $1,646,054    $3,751
                                                  ==========    ======
</TABLE>

    Goodwill and intangible assets result from acquisitions accounted for under
the purchase method. See note 2. Amortization of goodwill and other intangibles
is provided on the straight-line basis over the respective estimated useful
lives of the assets. The Company periodically evaluates whether changes have
occurred that would require revision of the remaining estimated useful life of
the assigned goodwill or intangible assets or render the goodwill or intangibles
not recoverable. If such circumstances arise, the Company would use an estimate
of the undiscounted value of expected future operating cash flows to determine
whether the goodwill or intangibles are impaired. To date, no impairment losses
have been recorded.

OTHER CURRENT AND NON-CURRENT ASSETS

    Other current assets consists primarily of prepaid expenses and interest
receivable relating to marketable securities. Other non-current assets consists
primarily of interest receivable relating to a related party note receivable and
non-current deposits related to various ongoing agreements entered into by the
Company. Other non-current assets also includes $8.9 million of restricted cash
which consists of a letter of credit in the amount of $4.5 million (See
Note 8.) and bonds related to promotional sweepstakes.

DEFERRED REVENUE

    Deferred revenue consists of online, television and radio advertising and
e-commerce fees to be earned in the future under agreements existing at the
balance sheet date.

                                      F-9
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ACCRUED MERGER COSTS

    Accrued merger costs represents the Company's estimate of professional
services provided in connection with the NBCi merger transactions that have not
yet been paid for as of December 31, 1999. Such professional services include
accounting, legal, printing and due diligence.

INCOME TAXES

    The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("FAS 109"), which requires the use of the liability method in accounting for
income taxes. Under FAS 109, deferred tax assets and liabilities are measured
based on differences between the financial reporting and tax bases of assets and
liabilities using enacted tax rates and laws that are expected to be in effect
when the differences are expected to reverse.

STOCK-BASED COMPENSATION

    The Company accounts for stock-based awards to employees under the intrinsic
value method in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"). Accordingly, no
compensation expense for equity awards to employees is recognized when the
exercise price is equity to the fair value at the date of grant. The Company
adopted the disclosure-only alternative of Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" ("FAS 123").

    The Company accounts for stock based awards to non-employees at fair value
in accordance with FAS 123 and Emerging Issues Task Force No. 96-18, "Accounting
for Equity Instruments that are Issued to Other than Employees for Acquiring, or
in Conjunction with Selling, Goods or Services."

REVENUE RECOGNITION

    ADVERTISING REVENUES.  A significant portion of the Company's advertising
revenues are derived from the sale of promotional space on the Company's online
internet properties. Services offered range from short-term banner
advertisements and sponsorships to long-term arrangements which may include the
development of co-branded, integrated websites. Revenue derived from such
arrangements is recognized during the period which the service is provided,
provided that no significant obligations remain at the end of the period.
Company obligations typically include the guarantee of a minimum number of
"impressions" or times that an advertisement appears in pages viewed by users of
the Company's online properties. To the extent the minimum guaranteed
impressions are not delivered, the Company defers recognition of the
corresponding revenue until the remaining guaranteed impressions levels are
achieved.

    Advertising revenue is also generated from integrated media sales, in which
the Company sells integrated promotional space on television advertising
purchased from NBC and radio advertising purchased from Clear Channel. Revenue
derived from these arrangements totaled $1.7 million for television and $100,000
for radio advertising and is recognized in the period in which the
advertisements are aired and are included in advertising revenue.

    E-COMMERCE REVENUE.  The Company recognizes revenue from e-commerce sales
when the products are shipped to customers. The Company provides for potential
product returns and estimated warranty costs in the period of the sale. Such
costs have been minimal to date.

                                      F-10
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    BARTER TRANSACTIONS.  The Company trades advertisements on its online
properties and from its on-air inventory in exchange for equity ownership in
certain of its customers. The Company also trades advertisements on its online
properties and from its on-air inventory in exchange for advertisements on the
online properties of other companies. These revenues are recorded at the fair
value of services provided or the fair value of the services or equity ownership
received, whichever is more reliably determinable at the time of the
transaction.

    In January 2000, the Emerging Issues Task Force of the FASB issued Issue
99-17, "Accounting for Advertising Barter Transactions." ("EITF 99-17") EITF
99-17 established accounting and reporting standards for barter transactions
which involve nonmonetary exchanges of advertising. It requires that an entity
recognize revenues and expenses from advertising barter transactions at the fair
value of the advertising surrendered only when an entity has a historical
practice of receiving cash for similar transactions. Management does not expect
adoption of EITF 99-17 to have a material impact on the Company's revenues and
expenses.

    Revenue from related parties was less than 10% of total revenue for the year
ended December 31, 1999. There was no revenue from related parties for the years
ended December 31, 1998 and 1997. The Company has made strategic investments in
certain companies, some of which the Company expects to earn equal to or in
excess of the initial cash investment. Revenue from companies in which we had
strategic investments was $2.2 million for the year ended December 31, 1999.
There was no revenue of this type in the years ended December 31, 1998 and 1997.
Revenue from the exchange of media and advertising services for advertising in
other media was less than 10% of total revenue for the year ended December 31,
1999. Revenue from these barter transactions is generally recorded at the fair
value of the services provided and is recognized when advertisements are
delivered on the Company's online properties, displayed on television or aired
on radio.

ADVERTISING EXPENSE

    All advertising costs are expensed when incurred. Advertising costs, which
are included in sales and marketing expense, were $5.3 million, $51,000 and
$50,000 for the years ended December 31, 1999, 1998 and 1997, respectively. In
addition, the Company incurred $16.9 million of promotion and advertising
expense to NBC, a related party. This expenditure was made in connection with a
four-year advertising agreement in which the Company agreed to purchase
$405 million of on-air advertising on NBC's television properties.

DEVELOPMENT COSTS

    Development costs, which consist of costs related to the enhancement and
modification of the Company's online properties, are expensed as incurred and
are included in operating and development expenses.

NET LOSS PER SHARE

    The Company computes net loss per share based on Financial Accounting
Standards Board Statement No. 128, "Earnings Per Share," ("SFAS 128"). In
accordance with SFAS 128, basic net income (loss) per share excludes dilutive
common stock equivalents and is calculated as net income (loss) divided by the
weighted average number of common shares outstanding. Diluted net income (loss)
per share is computed

                                      F-11
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
using the weighted average number of common shares outstanding and dilutive
common stock equivalents outstanding during the period. Common equivalent shares
from stock options and warrants were as follows for the years ended
December 31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
                                            SHARES
                                           EXCLUDED
                                           ---------
<S>                                        <C>
1999.....................................  8,758,303
1998.....................................  2,981,708
1997.....................................    977,982
</TABLE>

    These shares are excluded from the calculation of net loss per share as
their effect is anti-dilutive.

RECLASSIFICATIONS

    The Company has reclassified the presentation of certain prior year balance
sheet, statement of operations and statement of cash flows information to
conform to the current year presentation. These reclassifications had no effect
on previously reported financial position or results of operations.

2.  BUSINESS COMBINATIONS AND TECHNOLOGY ACQUISITIONS

    During the two years ended December 31, 1999, the Company made the business
and technology acquisitions described in the paragraphs that follow, each of
which has been accounted for as a purchase. The consolidated financial
statements include the operating results of each business from the date of
acquisition.

    The following acquisitions took place during the year ended December 31,
1999:

    SNAP AND NBC MULTIMEDIA DIVISION.  NBC Internet, Inc. ("NBCi") is the result
of several transactions that occurred on November 29 and 30 of 1999, pursuant to
which Xoom.com and Snap became wholly owned subsidiaries of NBCi, and NBCi
became the owner of the businesses related to NBC.com, NBC-IN.com and
VideoSeeker.com and a 10% ownership interest in CNBC.com LLC. On November 29,
1999, Xoom.com exchanged all of its outstanding shares of common stock for
shares of NBCi Class A common stock and CNET exchanged its ownership interest in
Snap for shares of NBCi's Class A common stock. On November 30, 1999, NBC
Multimedia Division, the owner of the businesses related to NBC.com, NBC-IN.com,
a 10% ownership interest in CNBC.com and ownership interests in Snap exchanged
its ownership interests in these entities for shares of NBCi Class B common
stock. NBC Multimedia Division also transferred the business related to
VideoSeeker.com to NBCi in exchange for a $39.5 million subordinated zero coupon
convertible note issued by NBCi due in November 2006; and a subsidiary of
General Electric (owner of NBC) purchased a $447.4 million subordinated zero
coupon convertible note issued by NBCi due in November 2006 in exchange for an
assignment of a $340 million note issued by NBC.

    The total purchase costs of these transactions have been calculated with
Xoom.com treated as the accounting acquiror and give effect to the purchase of
the Internet properties contributed by NBC and to NBCi's acquisition of CNET's
and NBC's ownership interests in Snap.

                                      F-12
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  BUSINESS COMBINATIONS AND TECHNOLOGY ACQUISITIONS (CONTINUED)
    The purchase consideration was $2,062.8 million and consists of the
following:

    - Issuance of 23,590,680 shares of NBCi Class B common stock with a fair
      value of $1,103.3 million and issuance of two zero coupon convertible
      notes payable of NBCi with an aggregate principal at maturity of
      $486.9 million (the convertible notes payable have been recorded at their
      present value of approximately $370 million with an effective interest
      rate of 4% per annum) for NBC.com, NBC-IN.com, and VideoSeeker, NBC
      Multimedia Division's ownership interest in Snap and a 10% ownership
      interest in CNBC.com. The fair value per share of NBCi's common stock is
      based on the average closing price of Xoom.com's common stock on June 14,
      1999 (the date of the announcement of a stock purchase agreement between
      Xoom.com and NBC) and the three days prior and subsequent to such date.

    - Issuance of 7,245,063 shares of NBCi Class A common stock with a fair
      value per share of $46.77 for a total value of $338.9 million for
      approximately 81% (39% on a fully diluted basis) of Snap.

    - The assumption of options to purchase 3,407,558 shares of NBCi's Class A
      common stock with a fair value of $222.6 million.

    - Estimated merger costs of $28 million consisting principally of investment
      banking fees, professional services fees including attorneys, accountants
      and printers, filing and registration costs and approximately
      $1.6 million of merger-related restructuring costs. The purchase
      consideration was allocated to the acquired assets and assumed liabilities
      based on fair values as follows (in thousands):

<TABLE>
<S>                                                           <C>
Net assets:
  Accounts receivable.......................................  $    9,740
  Other current assets......................................       4,727
  Fixed assets,.............................................       9,419
  Investments...............................................      33,495
  Other long-term assets....................................       3,294
  Current liabilities.......................................     (39,321)
  Other long-term liabilities...............................      (2,007)
  Long-term debt............................................     (49,200)
Note receivable from NBC--current...........................      78,288
Note receivable from NBC--long-term.........................     261,712
Purchased technology........................................      18,900
Investment in CNBC.com LLC..................................      68,500
Affiliate and other contracts...............................      31,400
Acquired workforce..........................................       1,900
Use of brand names..........................................      34,200
Goodwill....................................................   1,597,776
                                                              ----------
Total purchase consideration................................  $2,062,823
                                                              ==========
</TABLE>

    Amounts allocated to intangible assets and goodwill are being amortized over
their estimated useful lives of three to seven years.

                                      F-13
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  BUSINESS COMBINATIONS AND TECHNOLOGY ACQUISITIONS (CONTINUED)

    In connection with the acquisitions of Snap and NBC Multimedia, certain
leased facilities were abandoned and the CEO of Xoom.com was terminated. The
aggregate charge recorded for the leased facilities, including leasehold
improvements and equipment that will no longer be used totaled $500,000. The
charge recorded for the termination of Xoom.com's CEO totaled $17.3 million and
consisted primarily of severance pay and stock compensation charges. These
amounts are included in non-recurring charges.

    LIQUIDMARKET, INC.  In August 1999, the Company acquired 100% of the
outstanding shares of LiquidMarket, Inc., the developer of a next-generation
online comparison shopping guide and purchasing service. The purchase
consideration totaled $38.7 million and consisted of 718,224 shares of common
stock at a fair value of $40.70 per share, the assumption of 54,490, 52,948, and
23,132 employee stock options at a price per share of $40.29, $40.06, and
$26.90, respectively, and acquisition costs of approximately $300,000. In
addition, 212,202 shares of the Company's common stock were placed into an
escrow account. Escrow shares will be released to all shareholders based on
their relative equity interests in LiquidMarket, Inc. at the time of
consummation of the acquisition. Of the shares held in escrow, 21% were released
October and November of 1999 upon the achievement of certain performance
objectives, 29% will be released prior to June 2000, and 50% will be released in
August 2000, upon the expiration of certain indemnification obligations.

    PARALOGIC SOFTWARE CORPORATION.  In June 1999, the Company acquired 100% of
the outstanding shares of Paralogic Software Corporation, a provider of Java
based community products and services, such as customizable chat rooms,
discussion boards, guestbooks and event calendars. The purchase consideration
totaled $35.4 million and consisted of 654,018 shares of common stock at a fair
value of $47.13 per share, the assumption of 82,733 and 12,001 employee stock
options at a price per share of $46.67 and $33.05, respectively, and acquisition
costs of approximately $315,000.

    MIGHTYMAIL NETWORKS, INC.  In May 1999, the Company acquired 100% of the
outstanding shares of MightyMail Networks, Inc., a developer of an enhanced
e-mail product that enables customization of e-mail according to user
preferences. The purchase consideration totaled $23.1 million and consisted of
268,761 shares of the Company's common stock with a fair value of $71.10 per
share, the assumption of 9,061 and 12,121 employee stock options at a price per
share of $70.47 and $55.91, respectively, and acquisition costs of approximately
$300,000. In addition, 67,186 shares of the Company's common stock were placed
into an escrow account. Escrow shares will be released to all shareholders based
on their relative equity interests in MightyMail Networks, Inc. at the time of
consummation of the acquisition. Of the shares held in escrow, 25% were released
in November 1999 and 25% will be released in May 2000, if certain performance
objectives are met, and the remaining 50% will be released in May 2000, upon the
expiration of certain indemnification obligations.

                                      F-14
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  BUSINESS COMBINATIONS AND TECHNOLOGY ACQUISITIONS (CONTINUED)
    The following table summarizes the acquisitions made by the Company during
1999 and 1998 (in thousands):

<TABLE>
<CAPTION>
ENTITY NAME                                    FAIR VALUE OF CONSIDERATION                DATE
-----------                          ------------------------------------------------  -----------
<S>                                  <C>          <C>                                  <C>
1999:
Snap and NBC Multimedia Division...  $2,062,800   Stock, options assumed and notes     Nov. 1999
                                                  payable

Private One, Inc...................  $    2,201   Stock                                Aug. 1999

LiquidMarket, Inc..................  $   38,747   Stock and options assumed            Aug. 1999

Paralogic Software Corporation.....  $   35,396   Stock and options assumed            June 1999

NetFloppy.com LLC..................  $    1,440   Stock and cash                       May 1999

MightyMail Networks, Inc...........  $   23,114   Stock and options assumed            May 1999

Focused Presense, Inc..............  $    1,695   Stock                                April 1999

1998:
Pagecount, Inc.....................  $    1,460   Stock, cash and note payable         July 1998

AreaMax, Inc.......................  $      644   Stock, cash and note payable         June 1998

Revolutionary Software, Inc........  $      701   Stock, cash and note payable;        June 1998
                                                  purchase of assets

Global Bridges Technologies,         $      709   Stock, cash and note payable         June 1998
  Inc..............................

Paralogic Corporation..............  $    3,038   Stock and note payable               March 1998
</TABLE>

    PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT.  The amounts allocated to
purchased research and development were determined through established valuation
techniques in the high-technology Internet industry (generally using an income
approach) and were expensed upon acquisition, because technological feasibility
had not been established and no future alternative uses existed. The values
assigned to purchased in-process technology were determined by identifying the
on-going research projects for which technological feasibility had not been
achieved and assessing the state of completion of the research and development
effort. The state of completion was determined by estimating the costs and time
incurred to date relative to those costs and time to be incurred to develop the
purchased in-process technology into commercially viable products, estimating
the resulting net cash flows only from the percentage of research and
development efforts complete at the date of acquisition, and discounting the net
cash flows back to their present value. The discount rate included a factor that
took into account the uncertainty surrounding the successful development of the
purchased in-process technology projects.

    PURCHASED TECHNOLOGY.  To determine the values of purchased technology, the
expected future cash flows of the existing developed technologies were
discounted taking into account the characteristics and applications of the
product, the size of existing markets, growth rates of existing and future
markets as well as an evaluation of past and anticipated product lifecycles.

                                      F-15
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  BUSINESS COMBINATIONS AND TECHNOLOGY ACQUISITIONS (CONTINUED)
    LICENSE TO USE BRAND NAMES.  To determine the value of licensed brand names
purchased, the royalty rate the Company would have had to pay if it had to
license the brand names from a third party was estimated. This estimation was
based on discussions with management, consideration of royalties paid for the
licensing of similar trademarks and consideration of the future earnings
potential of the Snap and NBC brand names.

    AFFILIATE AND OTHER CONTRACTS.  To determine the value of affiliate and
other contracts purchased, the avoided cost approach was used, which considers
the costs the Company would have incurred if not for its relationships with NBC
and US Web.

    ACQUIRED WORKFORCE.  To determine the values of the acquired workforce,
employees were identified who would require significant cost to replace and
train. Then each employee's fully-burdened cost (salary, benefits, overhead),
the cost to train the employee, and the recruiting costs (locating,
interviewing, hiring) were estimated. These costs were then summed up and tax
effected to estimate the value of the assembled workforce.

    Amounts allocated to intangible assets are being amortized on a
straight-line basis over periods of two to seven years.

    The following unaudited pro forma financial information for NBCi reflects
the combination of the following:

    - Xoom.com;

    - Paralogic Corporation;

    - Global Bridges Technologies;

    - PageCount;

    - MightyMail Networks;

    - Paralogic Software Corporation;

    - LiquidMarket;

    - NBC.com;

    - NBC-IN.com;

    - VideoSeeker;

    - CNET's ownership interest in Snap;

    - NBC's ownership interest in Snap; and

    - 10% equity interest in CNBC.com LLC.

    The unaudited pro forma financial information combines the Xoom.com
historical statements of operations and the historical statements of operations
of Paralogic Corporation, Global Bridges Technologies, PageCount, MightyMail
Networks, Paralogic Software Corporation, LiquidMarket, Snap and NBC Multimedia
Division for the years ended December 31, 1999 and 1998 and give effect to the
transactions, including the amortization of goodwill and other intangible assets
and the recognition of interest income and expense, as if they had occurred at
the beginning of each period presented. The amount of the aggregate purchase
price allocated to purchased in-process research and development for each
applicable acquisition has been excluded from the pro forma information, as it
is a non-recurring item.

    The unaudited pro forma information is presented for illustrative purposes
only and is not necessarily indicative of the operating results that would have
occurred if the transactions had been consummated at

                                      F-16
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  BUSINESS COMBINATIONS AND TECHNOLOGY ACQUISITIONS (CONTINUED)
the dates indicated, nor is it necessarily indicative of future operating
results of the combined companies and should not be construed as representative
of these amounts for any future periods.

<TABLE>
<CAPTION>
                                                        YEAR ENDED DECEMBER 31,
                                                        -----------------------
                                                           1999         1998
                                                        ----------   ----------
                                                            (IN THOUSANDS)
                                                              (UNAUDITED)
<S>                                                     <C>          <C>
Net revenues..........................................  $ 101,530    $  28,132
Net loss..............................................  $(397,046)   $(325,998)
Net loss per share--basic and diluted.................  $   (8.17)   $   (7.84)
Number of shares used in per share calculation--basic
  and diluted.........................................     48,612       41,595
</TABLE>

3.  RELATED PARTY TRANSACTIONS

    In connection with the NBCi merger transactions that took place on
November 29 and 30, 1999 between Xoom.com, Snap and NBC Multimedia Division, the
Company completed the following:

    NOTES PAYABLE

        Two subordinated zero coupon convertible notes were issued by the
    Company. The convertible notes will have an aggregate principal at maturity
    of $486.9 million and are convertible by the holders into a total of
    5,809,388 shares of Class B common stock at any time after the first
    anniversary of the issuance of the note. Both notes bear interest at a rate
    of 4% per annum. The notes were recorded at their present value at issuance
    of $370 million. As of December 31, 1999, the total principal and interest
    due related to these notes were $370 million and $1.2 million, respectively.
    The convertible notes have a scheduled maturity of November 30, 2006.

        The Company also assumed notes payable due to CNET and NBC. The payable
    due to CNET is related to certain operating expenses which were paid for by
    CNET but incurred by Snap, a wholly-owned subsidiary of the Company, prior
    to November 30, 1999. The payable due to NBC is related to promotional and
    advertising services provided to Snap, prior to November 30, 1999, by NBC.
    During the month of December, the Company incurred $16.9 million of
    promotion and advertising expenses payable to NBC. As of December 31, 1999,
    the aggregate balance due to CNET and NBC was $41.8 million.

    NOTE RECEIVABLE

        The Company received a promissory note of NBC with a principal value of
    $340 million, due on November 30, 2003. The note bears interest at 5.4% and
    compounds quarterly. Principal and interest payments will be received by the
    Company in quarterly installments of $23.8 million each. As of December 31,
    1999, the total principal and interest due to the Company related to this
    note were $340 million and $1.5 million, respectively. Interest due to the
    Company is included in other current assets.

                                      F-17
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.  RELATED PARTY TRANSACTIONS (CONTINUED)
    ADVERTISING AGREEMENT WITH NBC

        The Company entered into an advertising agreement (the "Agreement") with
    NBC pursuant to which NBCi will purchase 15-, 30- and 60-second advertising
    spots valued at $405 million over a four-year period on the NBC television
    network, CNBC, MSNBC and NBC's owned and operated television stations. The
    advertisements are subject to standard terms and conditions generally
    applicable to such advertising. The advertising agreement may be terminated
    by NBC in the event of a change in control of NBCi, a bankruptcy event with
    respect to NBCi or a material breach by NBCi that is not cured with
    30 days. NBCi may terminate the advertising agreement upon a material breach
    by NBC that is not cured within 30 days. NBCi sells a portion of the
    advertising it purchases from NBC as described in Note 1.

        The following are the minimum future contractual expenditures required
    to be made under the Agreement at December 31, 1999 (in thousands):

<TABLE>
<CAPTION>
                                                              ADVERTISING
YEAR                                                          EXPENDITURES
----                                                          ------------
<S>                                                           <C>
2000........................................................    $105,000
2001........................................................      89,000
2002........................................................      89,000
2003........................................................     122,000
</TABLE>

CONSULTING AGREEMENTS

    The Company entered into various Consulting Agreements (the "Agreements")
during 1998 with outside directors of the Company. The Agreements provided for
the directors to receive monthly compensation of $10,000, paid in either cash or
common stock. The Agreements also provided for the directors to receive options
to purchase common stock. As of December 31, 1999, each of the Agreements had
been discontinued.

CONTENT LICENSE AGREEMENT

    The Company entered into a Content License Agreement dated February 22,
1998, with Classic Media Holdings, whereby the Company was granted certain
non-exclusive perpetual, world-wide licensing rights in connection with Classic
Media Holdings' library of public domain movies. As consideration for the
license, the Company issued 43,290 shares of the Company's common stock to the
principals of Classic Media Holdings. The fair value of the stock yielded a
$100,000 charge to operating and development expense in the year ended
December 31, 1998. An executive officer and director of the Company is a
principal of Classic Media Holdings.

4.  FINANCIAL INSTRUMENTS.

    The Company has classified all short-term and long-term marketable
securities as available-for-sale. Available-for-sale securities are carried at
amounts that approximate fair market value based on quoted market prices.
Interest earned, realized gains and losses and declines in value judged to be
other than temporary on available-for-sale securities are included in interest
income.

                                      F-18
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4.  FINANCIAL INSTRUMENTS. (CONTINUED)
    Short-term and long-term investments include the following securities as of
December 31, 1999 and 1998 (in thousands):

<TABLE>
<CAPTION>
                                                                    DECEMBER 31, 1999
                                                      ----------------------------------------------
                                                                   GROSS        GROSS      ESTIMATED
                                                                 UNREALIZED   UNREALIZED     FAIR
                                                        COST       GAINS        LOSSES       VALUE
                                                      --------   ----------   ----------   ---------
<S>                                                   <C>        <C>          <C>          <C>
Short-term:
  Market auction preferred stock....................  $  2,000     $   --       $    --    $  2,000
  Demand and money market instrument accounts.......    35,370         --           (91)     35,279
  Corporate bonds and notes.........................    70,009          1           (89)     69,921
  United states government agency bonds.............    51,473          3          (241)     51,235
  Foreign debt securities...........................     8,439         11           (13)      8,437
  Publicly traded equity securities.................    32,327      7,453        (1,888)     37,892
                                                      --------     ------       -------    --------
                                                       199,618      7,468        (2,322)    204,764
Less amounts classified as cash and cash
  equivalents.......................................   (28,092)        (3)           --     (28,095)
                                                      --------     ------       -------    --------
Total short-term investments........................  $171,526     $7,465       $(2,322)   $176,669
                                                      ========     ======       =======    ========
Long-term:
  Corporate bonds and notes.........................  $ 14,337     $   --       $  (118)   $ 14,219
  United states government agency bonds.............     2,996         --           (31)      2,965
                                                      --------     ------       -------    --------
Total long-term investments.........................  $ 17,333     $   --       $  (149)   $ 17,184
                                                      ========     ======       =======    ========
</TABLE>

    The Company also invests in privately held companies and classifies these
investments as long-term investments. At December 31, 1999, investments in
privately-held companies totaled approximately $46.4 million. The Company held
no investments in privately-held companies at December 31, 1998. These
investments are accounted for using the cost method. Impairment losses on
closely-held securities are recorded when events and circumstances indicate that
such assets might be impaired and the decline in value is other than temporary.
To date, no such losses have been recorded.

<TABLE>
<CAPTION>
                                                                    DECEMBER 31, 1998
                                                      ----------------------------------------------
                                                                   GROSS        GROSS      ESTIMATED
                                                                 UNREALIZED   UNREALIZED     FAIR
                                                        COST       GAINS        LOSSES       VALUE
                                                      --------   ----------   ----------   ---------
<S>                                                   <C>        <C>          <C>          <C>
Short-term:
  Market auction preferredstock.....................  $ 11,400     $   --       $   --     $ 11,400
  Demand and money market instrument accounts.......     8,731         --           --        8,731
  Corporate bonds and notes.........................    36,444         --           --       36,444
                                                      --------     ------       ------     --------
Total availabe-for-sale securities..................    56,575         --           --       56,575
Less amounts classified as cash and cash
  equivalents.......................................   (54,575)        --           --      (54,575)
                                                      --------     ------       ------     --------
Total short-term investments........................  $  2,000     $   --       $   --     $  2,000
                                                      ========     ======       ======     ========
</TABLE>

                                      F-19
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4.  FINANCIAL INSTRUMENTS. (CONTINUED)

    Realized gains and losses on sales of available-for-sale securities were not
material for the years ended December 31, 1999 and 1998.

    The aggregate contractual maturities of the Company's short and long-term
investments in debt securities are as follows:

<TABLE>
<S>                                                 <C>
Year:
2000..............................................  $148,165
2001..............................................  $  7,796
</TABLE>

    Expected maturities may differ from contractual maturities because the
issuers of the securities may have the right to prepay or call obligations
without prepayment penalties.

5.  FIXED ASSETS

    As of December 31, 1999 and 1998, fixed assets consisted of the following
(in thousands):

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Computers and equipment, including assets held under capital
  leases of $53 for 1999 and 1998...........................  $21,560     $2,432
Furniture and fixtures, including assets held under capital
  leases of $125 and $112 for 1999 and 1998, respectively...      257        112
Leasehold improvements......................................      656          5
Computer software...........................................    2,524         91
                                                              -------     ------
                                                               24,997      2,640

Less accumulated depreciation and amortization, including
  amounts related to assets held under capital leases of $34
  and $18 in 1999 and 1998, respectively....................   (6,901)      (569)
                                                              -------     ------
Fixed assets, net...........................................  $18,096     $2,071
                                                              =======     ======
</TABLE>

    Depreciation and amortization expense for the years ended December 31, 1999,
1998 and 1997 was $2.4 million, $778,000 and $254,000, respectively.
Amortization expense related to assets held under capital lease was $30,000,
$18,000 and $0 for the years ended December 31, 1999, 1998 and 1997,
respectively.

                                      F-20
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6.  NOTES PAYABLE

    As of December 31, 1999 and 1998, notes payable consisted of the following
(in thousands):

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Note payable and other amounts due to the former
  stockholders of Paralogic Corporation.....................   $  --     $ 1,128
Note payable issued in connection with a secured financing
  agreement with a leasing company. The note payable is
  collateralized by computer and office equipment and bears
  interest at the rate of 14.58% annually. Principal and
  interest payments are due in monthly installments of
  $15,000 payable through February 2002, plus a final
  payment of $69,000 due in March 2002......................     393         512
Note payable issued to a former stockholder of Global
  Bridges Technologies, Inc. bearing interest of 5%
  annually. The note is due in monthly installments of
  $2,500 payable through July 2000..........................      18          47
                                                               -----     -------
                                                                 411       1,687

Less amounts due within one year from December 31, 1999.....    (155)     (1,276)
                                                               -----     -------
Long-term notes payable.....................................   $ 256     $   411
                                                               =====     =======
</TABLE>

    Scheduled aggregate maturities of notes payable are as follows (in
thousands):

<TABLE>
<S>                                                    <C>
Year ending December 31,
2000.................................................    $155
2001.................................................     159
2002.................................................      97
                                                         ----
    Total............................................    $411
                                                         ====
</TABLE>

    On November 3, 1998, the Company entered into a loan agreement with a
financing company which provided for borrowings up to $2.8 million. Pursuant to
the terms of the loan agreement, the Company issued the lender a warrant to
purchase 183,333 shares of the Company's common stock at an exercise price equal
to the Company's initial public offering price per share. The Company determined
the fair value of the warrant to be $1.5 million, which was recorded as interest
expense in the year ended December 31, 1998. The effective interest rate on this
secured loan agreement for the year ended December 31, 1998 was approximately
1,450%. As of December 31, 1998, all outstanding principal and interest amounts
had been fully paid and the loan agreement had been canceled.

7.  INCOME TAXES

    There has been no provision for U.S. federal, U.S. state, or foreign income
taxes for any period as the Company has incurred operating losses in all periods
and for all jurisdictions.

                                      F-21
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7.  INCOME TAXES (CONTINUED)
    Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets are as follows:

<TABLE>
<CAPTION>
                                                              DECEMBER 31,
                                                           -------------------
                                                             1999       1998
                                                           --------   --------
<S>                                                        <C>        <C>
Deferred tax assets:
  Net operating loss carryforwards.......................  $ 53,607   $ 1,944
  Other..................................................     9,162     1,829
                                                           --------   -------
Total deferred tax assets................................    62,769     3,773
Valuation allowance......................................   (15,612)   (3,773)
                                                           --------   -------
Net deferred tax assets..................................    47,157        --
                                                           ========   =======
Deferred tax liabilities:
  Intangible assets......................................   (45,505)       --
  Unrealized gain on investments.........................    (1,652)       --
                                                           --------   -------
Total deferred tax liabilities...........................   (47,157)       --
                                                           --------   -------
Net deferred tax assets..................................  $     --   $    --
                                                           ========   =======
</TABLE>

    Realization of deferred tax assets is dependent upon future earnings, if
any, the timing and amount of which are uncertain. Accordingly, the net deferred
tax assets have been fully offset by a valuation allowance.

    The valuation allowance increased by $11.8 million, $2.5 million and
$1.1 million in the years ended December 31, 1999, 1998 and 1997, respectively.

    As of December 31, 1999, the Company had net operating loss carryforwards
for federal income tax purposes of approximately $139.3 million which expire in
the years 2011 through 2018. The Company also had net operating loss
carryforwards for state income tax purposes of approximately $80.8 million
expiring in the years 2003 though 2004.

    Utilization of the Company's net operating loss may be subject to a
substantial annual limitation due to the ownership change limitations provided
by the Internal Revenue Code and similar state provisions. Such an annual
limitation could result in the expiration of net operating loss carryforwards
before utilization.

8.  COMMITMENTS

    The Company leases its facilities, furniture and fixtures and certain
computers and equipment under noncancelable capital and operating leases for
varying periods through 2010. The cost of assets acquired under capital leases
during the years ended December 31, 1999 and 1998 was $125,000 and $165,000,
respectively. Amortization expense related to assets under capital lease of
$30,000, $18,000 and $0 is

                                      F-22
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8.  COMMITMENTS (CONTINUED)
included in accumulated depreciation and amortization at December 31, 1999, 1998
and 1997, respectively. The following are the minimum lease obligations under
these leases at December 31, 1999 (in thousands):

<TABLE>
<CAPTION>
                                                             CAPITAL    OPERATING
                                                              LEASES     LEASES
                                                             --------   ---------
<S>                                                          <C>        <C>
Year:
2000.......................................................    $106      $ 9,171
2001.......................................................     106        9,602
2002.......................................................      49        9,624
2003.......................................................      --        9,687
2004.......................................................      --        9,488
Thereafter.................................................      --       48,108
                                                               ----      -------
Minimum lease payments.....................................     261      $95,680
                                                                         =======
Less amount representing interest..........................     (29)
                                                               ----
Present value of minimum lease payments....................     232
Less current portion.......................................     (83)
                                                               ----
Long-term portion..........................................    $149
                                                               ====
</TABLE>

    Rent expense under operating lease arrangements for the years ended
December 31, 1999, 1998 and 1997 totaled $1.2 million, $386,000 and $43,000,
respectively. The Company subleases portions of its facilities under
noncancelable operating sublease agreements which expire during 2000. Estimated
future rental income from these agreements is $306,000 for 2000 and $0
thereafter. Rental income from these subleases in the year ended December 31,
1999 was $100,000. The Company did not record any rental income during the years
ended December 31, 1998 and 1997.

    In August 1999, in connection with a facilities lease agreement, the Company
entered into an irrevocable letter of credit, payable to the landlord, with a
commercial bank secured by a cash deposit of $4.5 million, the amount of which
is included in other assets as of December 31, 1999.

9.  LITIGATION

    As a recently formed company, NBCi is not directly subject to any pending or
threatened litigation. NBCi's operations and financial performance, however, may
be affected by pending litigation against Xoom.com and Snap.com or the Company's
other subsidiaries or online properties.

    Zoom Telephonics, Inc. filed a lawsuit against Xoom.com in September 1998 in
the United States District Court for the District of Massachusetts alleging
trademark infringement and related statutory violations. In April 1999, Zoom
Telephonics filed a motion for preliminary injunction to stop Xoom.com from
using any mark containing "Xoom". In October 1999 the court denied Zoom
Telephonics' motion for a preliminary injunction but allowed Zoom Telephonics to
request the court to reconsider the motion if the Xoom.com merger did not close
by October 31, 1999. On November 3, 1999, Zoom Telephonics filed a motion to
renew their previous motion for preliminary injunction. On November 17, 1999,
Xoom.com filed an opposition to Zoom Telephonics' motion to renew its previous
motion for a preliminary injunction. The Company believes that the claims
asserted by Zoom Telephonics are without merit, and it intends to defend against
them vigorously. The Company cannot be certain, however, that the results of
this litigation

                                      F-23
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.  LITIGATION (CONTINUED)
will be in its favor. An adverse result of the litigation would seriously harm
the Company's business and results of operations, particularly if the litigation
forces the Company to discontinue its use of the Xoom.com trademark. Any name
change could result in confusion to customers and investors, which could
adversely affect the results of operations and the market price of the Company's
common stock. If not successful in defending this claim, the resulting outcome
could have an adverse impact on the Company's business, results of operations,
cash flows and financial condition in a particular period.

    In January 1998, Xoom.com became aware that Imageline, Inc. claimed to own
the copyright in certain images that a third party, Sprint Software Pty Ltd. had
licensed to Xoom.com. Some clip art images that Imageline alleged infringed
Imageline's copyright were included by Xoom.com in versions of its Web Clip
Empire product and licensed by Xoom.com to third parties, including other
software clip publishers. Xoom.com's contracts with such publishers require it
to indemnify the publisher if copyrighted material licensed from Xoom.com
infringes a copyright. Imageline claims that Xoom.com's infringement of
Imageline's copyrights is ongoing. Xoom.com engaged in discussions with
Imageline, but were unable to reach any agreement regarding a resolution of this
matter.

    On August 27, 1998, Xoom.com filed a lawsuit in the United States District
Court for the Eastern District of Virginia against Imageline, certain parties
affiliated with Imageline, and Sprint Software regarding Xoom.com's and the
licensees' alleged infringement of Imageline's copyright in certain clip art
that Xoom.com licensed from Sprint Software. The lawsuit sought, among other
relief, disclosure of information from Imageline concerning the alleged
copyright infringement, a declaratory judgment concerning the validity and
enforceablilty of Imageline's copyrights and copyright registrations, a
declaratory judgment regarding damages, if any, owed by Xoom.com to Imageline
and indemnification from Sprint Software for damages, if any, owed by Xoom.com
to Imageline. There is no contractual limitation on Sprint Software's
indemnification. While we are seeking indemnification from Sprint Software for
damages, if any, we cannot assure you Sprint Software will be able to fulfill
the indemnity obligations under its license agreements with Xoom.com.

    On September 17, 1998, Imageline filed a counterclaim, which Imageline
amended in January 1999, seeking up to $60 million in damages. In March 1999,
the parties completed the discovery process and filed separate motions for
summary judgement.

    On April 5, 1999, the court granted one of Xoom.com's motions for partial
summary judgment and stayed the case to allow Imageline to file all necessary
copyright registration applications to cover the clip art images. Further, the
Company is subject to an indemnification claim made by International
MicroComputer Software, Inc. ("IMSI") in connection with a judgment entered in
favor of Imageline and against IMSI in connection with the infringement of
Imageline copyrights. The Company may be subject to similar indemnification
claims by third parties.

    Based on the discussions with Imageline, the Company believe the range of
liability related to this matter is from $0 up to $10 million; however, we
believe it is unlikely that the liability would exceed $1 million. Accordingly,
we reserved $1million for this potential liability, the expense of which was
included in non-recurring charges for the year ended December 31, 1997. The
Company believes that the $1 million reserve represents a reasonable estimate of
the loss that could be incurred in the Imageline dispute. Based on information
available to date, management does not believe that the outcome of this matter
will seriously harm our financial position, results of operations and cash flows
over and above the $1million accrued in the 1997 financial statements. If the
Company's reserves are not adequate to defend against this

                                      F-24
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.  LITIGATION (CONTINUED)
claim, the resulting outcome could have a material adverse impact on the
Company's business, results of operations, cash flows and financial condition in
a particular period.

    Snap filed a complaint against CityAuction, Inc. and Ticketmaster
Online-CitySearch in March 1999 in connection with an agreement entered into
between Snap and CityAuction to promote CityAuction's online auction site in
exchange for monetary compensation and warrants to purchase shares of
CityAuction. This matter is presently pending in Superior Court in San
Francisco, California. Snap is claiming that CityAuction breached the agreement
by refusing to honor Snap's exercise in February 1999 of its CityAuction
warrants, failing to make a $125,000 payment due to Snap and failing to provide
Snap with notice of CityAuction's pending acquisition by Ticketmaster
Online-CitySearch. Snap is also claiming that Ticketmaster Online-City Search
induced CityAuction to breach its contractual obligations to Snap. Snap is
seeking damages, injunctive and equitable relief of not less than $5 million
from CityAuction, in addition to damages from Ticketmaster
Online-CitySearch Inc. for intentional interference with the Snap and
CityAuction agreements. CityAuction has filed a cross-complaint against Snap
seeking rescission of its promotion agreement with Snap, restitution of not less
than $125,000 and unspecified damages for Snap's alleged failure to perform the
promotion agreement. This matter is in the discovery stage. An unfavorable
outcome in this litigation would deny the Company the economic benefit of the
claimed payments and the Company's stock ownership in CityAuction and expose the
Company to a damage judgment in favor of CityAuction.

10.  STOCKHOLDERS' EQUITY.

    In November 1999, in connection with the NBCi merger transactions, the
Company's Board of Directors approved the new capital structure of the Company
to consist of 100,000,000 shares of Class A common stock, $0.0001 par value per
share, 100,000,000 shares of Class B common stock, $0.0001 par value per share
and 10,000,000 shares of preferred stock, $0.0001 par value per share.

PUBLIC STOCK OFFERINGS

    On December 9, 1998, the Company completed its initial public offering and
issued 4,600,000 shares (including 600,000 shares issued in connection with the
exercise of the underwriter over-allotment option) of its common stock to the
public at a price of $14.00 per share. The Company received net proceeds from
the offering of approximately $57.3 million.

    On April 9, 1999, the Company completed a secondary public offering of its
common stock and issued 4,600,000 shares (including 600,000 shares issued in
connection with the exercise of the underwriter over-allotment option) at a
price of $66.00 per share. Of the 4,600,000 shares of common stock sold in the
offering, 2,659,800 were sold by the Company and 1,940,200 shares were sold by
existing stockholders. The Company received net proceeds from the offering of
approximately $167 million.

STOCK SPLITS

    In February 1998, the Company completed a one-for-two reverse stock split of
the outstanding shares of common stock. In addition, in November 1998, the
Company completed a two-for-three reverse stock split of the outstanding shares
of common stock. All share information and per share amounts in the accompanying
consolidated financial statements have been retroactively adjusted to reflect
the effect of these stock splits.

                                      F-25
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10.  STOCKHOLDERS' EQUITY. (CONTINUED)
PREFERRED STOCK

    The Company is authorized to issue 10,000,000 shares of preferred stock,
none of which is issued or outstanding as of December 31, 1999. The Board of
Directors has the authority to issue the preferred stock in one or more series
and to fix the designations, powers, preferences, rights, qualifications,
limitations and restrictions with respect to any series of preferred stock and
to specify the number of shares of any series of preferred stock without any
further vote or action by the stockholders.

INVESTMENT FROM NATIONAL BROADCASTING COMPANY, INC.

    On July 29, 1999, the Company issued 960,028 shares of its Class A common
stock to National Broadcasting Company, Inc. for $57.29 per share in connection
with a Stock Purchase Agreement dated June 11, 1999. The Company received
proceeds of $55 million. These shares were converted to shares of Class B common
stock of NBCi on November 30, 1999 in connection with the formation of NBCi.

WARRANTS

    On September 13, 1999, Xoom.com entered into a strategic alliance with Snap
and ValueVision International, Inc. whereby the parties entered into re-branding
and electronic commerce agreements, including television home shopping, Internet
shopping and direct e-commerce initiatives. As part of the agreements,
ValueVision and Xoom.com entered into a warrant purchase agreement whereby
Xoom.com agreed to purchase a warrant for 404,760 shares of ValueVision common
stock at an exercise price of $24.71 per share, and ValueVision agreed to
purchase a warrant for 244,004 shares of Xoom.com common stock at an exercise
price of $40.89 per share. The fair value of the warrant the Company received
from ValueVision was deemed to be $6.3 million, and the fair value of the
warrant the Company granted to ValueVision was deemed to be $6.9 million. The
value of the warrant received by Xoom.com was recorded as a long-term
investment. The value of the warrant granted by the Company was recorded as an
addition to stockholders' equity. The difference in value was recorded as a
deferred charge, which will be charged to sales and marketing expense over the
estimated life of the agreement. The warrants are exercisable until
September 12, 2004. These rights and obligations of Xoom.com and Snap were
assigned to and assumed by NBC Internet, Inc. following consummation of the
transactions in the merger agreement.

    In connection with the issuance of common stock during the year ended
December 31, 1998, the Company issued warrants to purchase a total of 314,747
shares of common stock at an exercise price of $3.33 per share. These warrants
were exercised prior to the Company's initial public offering on December 9,
1998. In November 1998, in connection with a loan agreement, the Company issued
a warrant to a lender to purchase 183,333 shares of the Company's common stock
at an exercise price equal to the initial public offering price per share
($14.00). The Company determined the fair market value of the warrant to be
$1.5 million at the date of the initial public offering, and in connection with
this issuance, the Company recorded the fair value as interest expense. On
January 11, 1999, the lender exercised the warrant in a net exercise transaction
and received 116,231 shares of the Company's common stock.

                                      F-26
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10.  STOCKHOLDER'S EQUITY. (CONTINUED)

NOTES RECEIVABLE FROM STOCKHOLDERS

    On June 16, 1999, in connection with its acquisition of MightyMail
Networks, Inc., the Company assumed stock subscriptions receivable from related
parties in exchange for shares of common stock. As of December 31, 1999,
outstanding subscriptions receivable amounted to approximately $995,000. All
amounts mature by April 2002.

STOCK OPTION PLAN

    On November 30, 1999, the Company's Board of Directors and stockholders
approved the authorization of 13,500,000 shares under its 1999 Stock Incentive
Plan (the"Option Plan"). The Option Plan provides for incentive stock options,
as defined by the Internal Revenue Code, to be granted to employees, at an
exercise price not less than 100% of the fair value at the grant date as
determined by the Board of Directors. The Option Plan also provides for
nonqualified stock options to be issued to non-employee officers, directors and
consultants at an exercise price of not less than 85% of the fair value at the
grant date. Option vesting schedules are determined by the Board of Directors at
the time of issuance. Stock options generally vest over different periods
ranging from immediately to 25% at the end of the first year and monthly
thereafter up to a maximum of four years. Certain options' vesting can also
accelerate based on the achievement of specified performance criteria.

    On November 29, 1999, upon the closing of then NBCi merger agreement,
outstanding options held by the directors, officers, and employees of Xoom.com
and Snap were converted into options to purchase shares of Class A common stock
of NBCi. The following table summarizes option activity:

<TABLE>
<CAPTION>
                                                                     WEIGHTED-
                                                      NUMBER OF       AVERAGE
                                                        SHARES     EXERCISE PRICE
                                                      ----------   --------------
<S>                                                   <C>          <C>
Balance at December 31, 1996........................     440,000       $ 0.03
  Granted...........................................     632,982         0.05
  Exercised.........................................          --           --
  Canceled..........................................     (95,000)        0.03
                                                      ----------       ------
Balance at December 31, 1997........................     977,982         0.05
  Granted...........................................   1,957,225         9.35
  Exercised.........................................          --           --
  Canceled..........................................    (136,832)        4.05
                                                      ----------       ------
Balance at December 31, 1998........................   2,798,375         6.20
  Granted...........................................   4,482,657        56.60
  Assumed in connection with acquisitions...........   3,654,764        20.26
  Exercised.........................................  (1,916,352)        4.27
  Canceled..........................................    (505,145)       32.71
                                                      ----------       ------
Balance at December 31, 1999........................   8,514,299       $37.80
                                                      ==========       ======
</TABLE>

    The Company assumed 21,182, 94,734, 130,565, and 3,408,283 stock options in
connection with its acquisitions of MightyMail Networks, Inc, Paralogic Software
Corporation, Inc., LiquidMarket, Inc., and Snap, respectively, in the year ended
December 31, 1999. As of December 31, 1999, there were 4,366,454 options
available for future grant under the Plan.

                                      F-27
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10.  STOCKHOLDER'S EQUITY. (CONTINUED)
    The following table summarizes information about options outstanding and
exercisable at December 31, 1999:

<TABLE>
<CAPTION>
                                                    OPTIONS OUTSTANDING             OPTIONS EXERCISABLE
                                           --------------------------------------   --------------------
                                                          WEIGHTED
                                                           AVERAGE       WEIGHTED               WEIGHTED
                                                          REMAINING      AVERAGE                AVERAGE
                                            NUMBER       CONTRACTUAL     EXERCISE    NUMBER     EXERCISE
EXERCISE PRICE                             OF SHARES   LIFE (IN YEARS)    PRICE     OF SHARES    PRICE
--------------                             ---------   ---------------   --------   ---------   --------
<S>                                        <C>         <C>               <C>        <C>         <C>
$0.49 - $14.00...........................  2,292,142         8.7          $ 7.78    1,409,559    $ 7.85
$24.31 - $39.13..........................  2,202,046         9.6          $30.25      371,698    $27.58
$41.00 - $68.56..........................  3,580,515         9.9          $56.31      195,408    $51.13
$70.13 - $92.00..........................    439,596         9.8          $72.95       32,625    $72.37
                                           ---------                                ---------
                                           8,514,299         9.4                    2,009,290
                                           =========                                =========
</TABLE>

DEFERRED COMPENSATION

    The Company recorded deferred compensation charges of $4.2 million,
$2 million, and $551,000 for the years ended December 31, 1999, 1998, and 1997
respectively, for the difference between the exercise price and the deemed fair
value of certain stock options granted by the Company. These amounts are being
amortized by charges to operations, using the graded method, over the vesting
periods of the individual stock options, which range from three months to four
years.

    From December 1996 through June 1998, certain options were granted to
various employees which provided vesting only upon certain events, such as the
Company's successful completion of an initial public offering or individual and
Company performance goals. In June 1998 these options were modified to vest upon
the earlier of an event or two years from the date of grant. As a result, the
related compensation charge was measured in June 1998.

OPTIONS ISSUED TO CONSULTANTS

    The Company granted options to purchase 94,883 shares of common stock to
consultants at exercise prices ranging from $0.03 to $14.00 per share during the
period from January 1, 1997 through December 31, 1998. These options were
granted in exchange for consulting services performed. The Company valued these
options using the estimated fair value of the services performed which amounted
to $0, $246,000, and $20,000 for the years ended December 31, 1999, 1998 and
1997, respectively. These amounts are being amortized by charges to operations
over the respective consulting periods. The amounts charged to operations were
$0, $238,000, and $17,000, for the years ended December 31, 1999, 1998, and
1997, respectively.

1999 EMPLOYEE STOCK PURCHASE PLAN

    The Company's 1998 Employee Stock Purchase Plan was terminated by the Board
of Directors in May 1999.

    The Company's 1999 Employee Stock Purchase Plan (the "Purchase Plan") was
adopted by the Board of Directors in November 1999, and Xoom.com, at that time
our sole stockholder, approved the plan in November 1999. The Purchase Plan
qualifies under Section 423 of the Internal Revenue Code. The Company has
reserved 300,000 shares of its Class A common stock for issuance under the
Purchase Plan.

                                      F-28
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10.  STOCKHOLDER'S EQUITY. (CONTINUED)
    Purchases of the Company's Class A common stock will occur on June 30 and
December 31 of each year or on the last trading day prior to those dates. Each
participant may purchase up to 200 shares on any purchase date; provided no more
than 200 shares are purchased during any offer period. The price of each share
of Class A common stock purchased under the Purchase Plan will be 85% of the
lower of (i) the fair market value per share of Class A common stock on the
trading day immediately before the first day of the applicable offering period
or (ii) the fair market value per share of Class A common stock on the purchase
date. Employees may end their participation in the Purchase Plan at any time.
Participation ends automatically upon termination of employment with the
Company.

SHARES RESERVED FOR FUTURE ISSUANCE

    As of December 31, 1999, shares of Class A common stock reserved for future
issuance were as follows:

<TABLE>
<S>                                                           <C>
1999 Stock Incentive Plan...................................  12,880,753
1999 Employee Stock Purchase Plan...........................     300,000
Warrants....................................................     244,004
                                                              ----------
Total shares authorized for future issuance.................  13,424,757
                                                              ==========
</TABLE>

PRO FORMA DISCLOSURE OF THE EFFECT OF STOCK-BASED COMPENSATION

    The Company has elected to follow APB 25 and related interpretations in
accounting for its employee stock options because, as discussed below, the
alternative fair value accounting provided for under FAS 123 requires the use of
option valuation models that were not developed for use in valuing employee
stock options. Pro forma information regarding net income (loss) and net income
(loss) per share is required by FAS 123. This information is required to be
determined as if the Company has accounted for its employee stock options under
the fair value method of FAS 123. Under this method, the estimated fair value of
the options is amortized to expense over the vesting period of the options. The
fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions:

<TABLE>
<CAPTION>
                                                                      YEARS ENDED
                                                                      DECEMBER 31,
                                                          ------------------------------------
                                                            1999          1998          1997
                                                          --------      --------      --------
<S>                                                       <C>           <C>           <C>
Risk-free interest rate.................................    5.46%         4.52%         6.5%
Expected life of the option in years....................       5             5            5
Expected volatility.....................................     1.0           0.7            0
Expected dividend yield.................................       0%            0%           0%
</TABLE>

    Because FAS 123 is applicable only to options granted since inception, its
adjusted effect will be fully reflected in the year 2000.

    The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions, including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value

                                      F-29
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10.  STOCKHOLDER'S EQUITY. (CONTINUED)
estimates, in management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its employee stock
options.

    The weighted-average fair value of options granted to employees during the
years ended December 31, 1999, 1998 and 1997 were $53.81, $8.01, and $0.36,
respectively.

    The effect of applying the FAS 123 fair value method to the Company's
stock-based awards results in net loss and net loss per share as follows:

<TABLE>
<CAPTION>
                                                       YEARS ENDED DECEMBER 31,
                                                 -------------------------------------
                                                    1999          1998         1997
                                                 -----------   ----------   ----------
                                                  IN THOUSANDS, EXCEPT PER SHARE DATA
<S>                                              <C>           <C>          <C>
Net loss, as reported..........................   $ (86,831)    $(10,798)     $(3,132)
Net loss, pro forma............................   $(115,236)    $(11,367)     $(3,231)
Net loss per share-basic and diluted, as
  reported.....................................   $   (4.26)    $  (1.37)     $ (0.64)
Net loss per share-basic and diluted, pro
  forma........................................   $   (5.65)    $  (1.44)     $ (0.66)
</TABLE>

11.  RETIREMENT PLAN.

    The Company has a defined contribution plan (the "Retirement Plan") pursuant
to Section 401(k) of the Internal Revenue Code covering all eligible employees.
Under the Retirement Plan, participating employees may defer a portion of their
pretax earnings up to the Internal Revenue Service annual contribution limit.
During the years ended December 31, 1999 and 1998, the Company did not
contribute to the Retirement Plan.

12.  SEGMENT DISCLOSURES

    The Company operates in a single industry segment as an integrated media
company that combines portal, community, online, television and radio
advertising and e-commerce services to deliver a comprehensive, next generation
online experience to a global audience. Net revenues for the three years in the
period ended December 31, 1999 were $35.6 million, $8.3 million and
$0.8 million, respectively. Revenues from portal, online, television and radio
advertising are included in advertising revenues. Net revenues are composed of
advertising and e-commerce revenues, which represent the following % of total
net revenues for each of the three years in the period ended December 31, 1999:

<TABLE>
<CAPTION>
                                                         1999          1998          1997
                                                       --------      --------      --------
<S>                                                    <C>           <C>           <C>
Advertising..........................................    56.1%         25.8%          7.1%
E-commerce and other.................................    43.9          74.2          92.9
                                                         ----          ----          ----
  Total..............................................     100%          100%          100%
                                                         ====          ====          ====
</TABLE>

    The Chief Executive Officer has been identified as the Chief Operating
Decision Maker ("CODM") because he has final authority over resource allocation
decisions and performance assessment. The CODM does not receive discrete
financial information about the Company's advertising or e-commerce operations.
Nor does the CODM make asset allocation, expense allocation, or profitability
decisions between its advertising and e-commerce operations.

                                      F-30
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12.  SEGMENT DISCLOSURES (CONTINUED)
    The Company's geographic sales are as follows:

<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                                 ---------------------------------------------------------------------
                                                        1999                     1998                     1997
                                                 -------------------      -------------------      -------------------
                                                                            (IN THOUSANDS)
<S>                                              <C>        <C>           <C>        <C>           <C>        <C>
United States..................................  $31,582       89%         $6,265       75%          $589        70%
North America, excluding United States.........      843        2             288        4             39         5
Europe.........................................    1,241        3           1,008       12            157        19
Asia/Pacific...................................      589        2             392        5             44         5
Rest of the world..............................    1,326        4             365        4             12         1
                                                 -------      ---          ------      ---           ----       ---
  Total........................................  $35,581      100%         $8,318      100%          $841       100%
                                                 =======      ===          ======      ===           ====       ===
</TABLE>

    Export sales were 11%, 25% and 30% of net revenue for the years ended
December 31, 1999, 1998 and 1997, respectively. For the years ended
December 31, 1999 and 1998, no single customer accounted for greater than 10% of
total net revenue. For the year ended December 31, 1997, one customer accounted
for $100,000 or 12% of total net revenue. No balances were receivable from that
customer at December 31, 1997.

13.  QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED
                                                         -----------------------------------------
                                                         MAR. 31    JUNE 30    SEPT. 30   DEC. 31
                                                         --------   --------   --------   --------
<S>                                                      <C>        <C>        <C>        <C>
1999:
Revenue................................................  $ 4,422    $ 6,525    $  8,956   $ 15,678
Gross profit...........................................  $ 1,643    $ 2,805    $  4,881   $  9,452
Loss from operations...................................  $(3,918)   $(9,075)   $(11,744)  $(71,636)
Net loss...............................................  $(3,308)   $(6,742)   $ (8,564)  $(68,217)
Net loss per share--basic and diluted..................  $ (0.24)   $ (0.40)   $  (0.44)  $  (2.18)
Number of shares used in per share calculation--basic
  and diluted..........................................   13,811     16,777      19,655     31,249
</TABLE>

                                      F-31
<PAGE>
                               NBC INTERNET, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13.  QUARTERLY FINANCIAL DATA (UNAUDITED) (CONTINUED)

<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED
                                                         -----------------------------------------
                                                         MAR. 31    JUNE 30    SEPT. 30   DEC. 31
                                                         --------   --------   --------   --------
<S>                                                      <C>        <C>        <C>        <C>
1998:
Revenue................................................  $   849    $ 1,716    $  2,300   $  3,453
Gross profit...........................................  $   415    $   819    $    851   $  1,306
Loss from operations...................................  $(1,000)   $(2,339)   $ (3,070)  $ (2,947)
Net loss...............................................  $(1,000)   $(2,339)   $ (3,053)  $ (4,406)
Net loss per share--basic and diluted..................  $ (0.17)   $ (0.33)   $  (0.35)  $  (0.44)
Number of shares used in per share calculation--basic
  and diluted..........................................    5,884      6,983       8,710      9,968
</TABLE>

14.  SUBSEQUENT EVENTS

    On January 12, 2000 the Company entered into a joint venture agreement with
Asiacontent.com Ltd., a developer of Internet content, advertising and commerce
services in the Asian market. The joint venture is intended to develop and
launch comprehensive, localized Internet community, content, portal and shopping
services in Korea, Hong Kong, Singapore, Malaysia and Taiwan. These new Web
sites will combine the Company's content and technology with localized content
and services developed by Asiacontent.com and other local providers to offer
users, partners and advertisers in the Asian markets high quality Internet
services focused on local languages. In February 2000, the Company invested
approximately $10 million in Asiacontent.com.

    On February 3, 2000, the Company completed a follow-on offering of 4,600,000
shares of Class A common stock at a price of $81.38 per share. Of the 4,600,000
shares of Class A common stock sold in the offering, 3,650,000 were sold by the
Company and 950,000 shares of Class A Common Stock were sold by existing
stockholders. The Company received net proceeds from the offering of
approximately $280.1 million.

    As of March 7, 2000 the Company acquired 100% of the outstanding shares of
AllBusiness.com, a privately held company with approximately 120 employees
active in the business-to-business field for approximately $225 million in
stock. In addition, the Company assumed the outstanding options of
AllBusiness.com. Ten percent of the purchase consideration was placed into
escrow and will be released in March 2001, upon the expiration of certain
indemnification obligations. Escrow shares will be released to all shareholders
based on their relative equity interests in AllBusiness.com at the time of
consummation of the acquisition.

                                      F-32