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SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                   FORM 10-K
                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
                        COMMISSION FILE NUMBER 000-27537
                            ------------------------

                          JUPITER COMMUNICATIONS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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<S>                                            <C>
                   DELAWARE                                      13-4069996
           (STATE OF INCORPORATION)               (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
</TABLE>

                                  627 BROADWAY

                            NEW YORK, NEW YORK 10012
                                 (212) 780-6060
              (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
       INCLUDING AREA CODE, OF REGISTRANT'S 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 $.001 PAR VALUE
                            ------------------------
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]  [ ] No

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

     The aggregate market value of voting stock held by non-affiliates of the
registrant as of March 20, 2000 was $219,325,406 (based on the last reported
sale price on the Nasdaq National Market on that date). The number of shares
outstanding of the registrant's common stock as of March 20, 2000 was
15,081,915.
                            ------------------------
                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of Registrant's Proxy Statement for the 2000 Annual Meeting of
Stockholders, which is to be filed subsequent to the date hereof, are
incorporated by reference into Part III.

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                          JUPITER COMMUNICATIONS, INC.
                          1999 FORM 10-K ANNUAL REPORT
                               TABLE OF CONTENTS

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PART I
ITEM 1.   Business....................................................     3
ITEM 2.   Properties..................................................    21
ITEM 3.   Legal Proceedings...........................................    21
ITEM 4.   Submission of Matters to a Vote of Security Holders.........    21

PART II
ITEM 5.   Market for Registrant's Common Equity and Related
            Stockholder Matters.......................................    21
ITEM 6.   Selected Consolidated Financial Data........................    23
ITEM 7.   Management's Discussion and Analysis of Financial Condition
            and Results of Operations.................................    25
ITEM 7A.  Quantitative and Qualitative Disclosures About Market
            Risk......................................................    30
ITEM 8.   Consolidated Financial Statements and Supplementary Data....    32
ITEM 9.   Changes In and Disagreements With Accountants on Accounting
            and Financial Disclosure..................................    53

PART III
ITEM 10.  Directors and Executive Officers of the Registrant..........    53
ITEM 11.  Executive Compensation......................................    53
ITEM 12.  Security Ownership of Certain Beneficial Owners and
            Management................................................    53
ITEM 13.  Certain Relationships and Related Transactions..............    53

PART IV
ITEM 14.  Exhibits, Financial Statement Schedules and Reports on Form
            8-K.......................................................    53
</TABLE>

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     THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS BASED ON OUR CURRENT
EXPECTATIONS, ASSUMPTIONS, ESTIMATES AND PROJECTIONS ABOUT JUPITER AND OUR
INDUSTRY. THESE FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES.
JUPITER'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SUCH
FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS, AS MORE FULLY
DESCRIBED IN THIS SECTION AND ELSEWHERE IN THIS REPORT. JUPITER UNDERTAKES NO
OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS FOR ANY REASON,
EVEN IF NEW INFORMATION BECOMES AVAILABLE OR OTHER EVENTS OCCUR IN THE FUTURE.

                                     PART I

ITEM 1.  BUSINESS

OVERVIEW

     We provide research and advice on Internet commerce. Senior executives at
client companies utilize our research to make informed business decisions in a
complex and rapidly changing Internet economy. Our research, which focuses
solely on the global Internet economy, provides our clients with comprehensive
views of industry trends, forecasts and best practices. Our analysis and advice,
supported by extensive proprietary data, emphasizes specific, actionable
findings that enable companies to develop effective business strategies for
Internet commerce, as well as to utilize the Internet to more effectively
operate their business. We also produce a wide range of conferences which offer
senior executives the opportunity to hear first-hand the insights of our
analysts and the leading decision makers in the Internet and technology
industries.

     We provide our research services primarily through annual subscriptions to
Jupiter Research Services. Jupiter Research Services is a combination of
proprietary written analysis, supporting data and access to our analysts. We
deliver our services primarily over the Internet. Our Web site offers clients
easy access to our research, products that deliver customized views of our data
and analysis and the ability to efficiently communicate with our analysts. We
offer 34 Research Services, which, as of March 20, 2000, are generated by 69
research analysts. Nine of our 34 Research Services are new this year. Our
research is informed and supported by a dedicated data research group.

     We have a highly diversified and global client base, including traditional
companies, companies solely focused on the Internet and the suppliers and
vendors that service them. We have substantially increased the number of
Research Services clients and our total contract value, which is the annualized
value of all Research Services contracts at a given point in time. As of
December 31, 1999, we had 987 client contracts for our Research Services, an
increase from 421 on December 31, 1998. Our total contract value has increased
from $11.7 million on December 31, 1998 to $40.1 million on December 31, 1999.
In addition, approximately 76% of the Research Services contracts that expired
during 1999 were renewed and approximately 97% of these contracts were renewed
for an equal or larger dollar amount.

     Our conference revenues increased 130% to $11.3 million in 1999 from $4.9
million in 1998. Approximately 75% of the 6,576 paid attendees for our
conferences held in 1999 were not Research Services clients. As a result, these
conferences provide a unique opportunity to market and sell our Research
Services to potential clients. These conferences also allow us to increase the
public profile of our analysts, generate favorable press and otherwise promote
the Jupiter brand.

JUPITER RESEARCH SERVICES

     Jupiter Research Services provides our clients with a wide range of
proprietary research, data and advisory analysis and is structured as a
continuous analytical service. We have designed our Research

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Services to enable companies to make intelligent business decisions about
Internet commerce and consumer and business use of the Internet and related
technologies. These research products and services define business and strategic
goals, identify revenue opportunities, evaluate business models, analyze
marketing strategies, assess enabling technologies and provide advice on
organizational structures and vendor selections. The size of our Research
Services contracts varies depending on the number of Research Services that are
purchased and the number and type of users at the client company.

     A key component of our Research Services is access to our research analysts
for discussions and debate related to their research topics. Our clients
typically seek advice or have questions regarding new business or marketing
initiatives, best practices, new opportunities or competitive threats, market
forecasts and/or the value of mergers and strategic partnerships. To facilitate
the efficiency of this inquiry, clients submit issues or questions initially to
our dedicated client inquiry staff via telephone or e-mail. The client inquiry
staff, which consists of trained research professionals who are familiar with
all of our products and services, coordinates the responses and actively manages
access to the analysts.

     We continually evaluate the market demand for additional Research Services
and, through our recent acquisition of Internet Research Group, we expect to
launch three additional Research Services addressing business-to-business
infrastructure, customer service and content infrastructure issues. We also seek
out and receive input from our research analysts, the sales representatives that
are in constant contact with existing and potential clients and our marketing
staff as to the demand for specific research and our ability to provide
coverage. We also examine a variety of empirical data, including breadth of
applicability, uniqueness of the offering, competitive value and ease of
communication.

     We divide our Research Services into Internet Strategies, which offers
broad prescriptive advice relevant to all online ventures, and Market
Strategies, which targets specific industries and geographic regions.

                 [Analyst Research Product Architecture Chart]

     We further classify these Research Services into the following six
categories:

     - Marketing & Revenue:  Provides analysis and data required to create
business plans for the Internet economy. These services focus on online
distribution dynamics, Internet revenue opportunities and interactive sales and
marketing strategies.

     - Operations & Infrastructure:  Provides management strategies, cost
metrics, vendor evaluations and best practices to drive business decisions and
improve operating results. These services analyze the operations, infrastructure
and personnel investment required of Internet businesses.

     - Technology & Platforms:  Identifies and predicts critical developments in
consumer, site and business adoption of new applications, technologies and
platforms. These services analyze the business

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need and opportunities surrounding developments such as wireless Internet
access, digital distribution of music and broadband applications.

     - Executive Management:  Our MindShare Senior Executive Program is
specifically targeted at chief executive officers and other senior executives
across all industries. This service analyzes the most important trends in the
Internet economy, providing insight, direction and vision to senior executives
into both major corporations and Internet start-ups. MindShare provides analysis
and data that will drive major shifts in corporate strategy resulting from
Internet opportunities and threats.

     - Industries:  Provides analysis and insights into the particular issues
that companies face as the Internet transforms the vertical industries in which
they operate. These services provide the unique perspective, detailed data,
industry forecasts and benchmark studies to make key business decisions in a
particular industry or competitive environment.

     - Regions:  Provides analysis and data specific to important and growing
regions in the Internet economy. These services identify market opportunities,
competitive dynamics and consumer online behavior in various countries and
regions. A critical component of these services are the consumer survey data and
market forecasts that provide both domestic and foreign corporations the
region-specific analysis required to make strategic planning decisions.

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     The following is a listing of the Research Services in each category and
sample or standardized reports:

                       [INTERNET STRATEGY SERVICES CHART]

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     The Research Services program is designed to provide business executives
with the most up-to-date research and analysis. We provide written reports on a
regular basis as well as ongoing access to our research analysts in order to
answer specific questions or clarify information relating to the practice topic.
Specifically, clients receive some or all of the following:

     - Analyst Reports.  Vision Reports (about 20 pages) examine industries,
       trends or business models while providing clients with prescriptive and
       analytical direction. Concept Reports (about 4 pages) are more frequent
       reports that cover both topical and strategic issues.

     - Analyst Access.  Access to Jupiter's research analysts for discussion,
       debate and additional advice.

     - Digital Notes.  "JupTakes" which cover current key events in their
       respective fields, and "JupiterViews" which aggregate research from every
       Jupiter service to highlight our perspective on major events.

     - Digital Access.  Password-only access to current research and a
       fully-searchable archive, which includes research, company profiles and
       slides from analyst presentations. Our Cross Referencing feature provides
       easy access to related research, and our new data library allows clients
       to search and browse forecasts, consumer and executive surveys and other
       information from our expanding data library. Digital access to our Web
       site also includes a weekly "JupMail" e-mail that updates clients on
       recent research and upcoming events.

     - Monthly Teleconferences.  Each month, the research analysts from each of
       the practices conduct a "JupTel" telephone conference call that outlines
       the key findings from a recent analyst report.

     - Conference Passes.  A specified number of passes to our conferences.

JUPITER CONFERENCES

     We produce a wide range of conferences which provide comprehensive coverage
of issues relating to Internet commerce. These conferences offer senior
executives the opportunity to hear first-hand the insights of our analysts and
the leading decision makers in the Internet and technology industries. Our
events, which typically run for two to three days, provide an excellent
opportunity to showcase our research to current and potential clients, increase
the public profile of our research analysts, generate favorable press and
otherwise promote the Jupiter brand. Since approximately 75% of the attendees at
our conferences are not Research Services clients, these events provide a unique
opportunity to promote our research products and services to potential
customers. As a result, our marketing staff and sales representatives attend
each of our events and conduct continuous promotional and direct sales efforts
targeted at potential clients. We believe that our events and the sales and
marketing efforts at these events have resulted in numerous Research Services
contracts.

     Our conferences, located throughout the world, are notable for the senior
level of attendees from all sectors of the online and traditional industries. We
produced eight conferences in 1997, nine conferences in 1998 and ten conferences
in 1999. We have scheduled seventeen conferences for calendar year 2000, ten of
which are large events and seven of which are small events. Paid attendance at
our large events typically ranges from 800 to 1,500 participants, while paid
attendance at our small events typically ranges from 300 to 600 participants. We
also solicit sponsors and exhibitors for each of our events. Exhibitors receive
a booth at the conference to promote their companies and are also listed in the
conference program. Sponsors receive prominent display of their corporate logos
in the conference program and the main meeting hall of the conference, and may
host a reception during the conference. We typically have approximately 50 to 75
sponsors and exhibitors at our large events and 25 sponsors and exhibitors at
our small events.

     We have successfully increased attendance at our various conferences over
the past few years. For example, the total number of paid attendees at our 1999
conferences was 6,576, approximately 100% above the total number of paid
attendees for our 1998 conferences.

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     The following is a list of the 17 events scheduled for 2000, twelve of
which are located in the United States and five of which will take place in
Europe and Asia, and the year the conference was or will be first held:

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                    CONFERENCE                        YEAR FIRST HELD
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    Consumer Online Forum                                   1994
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    Digital Kids                                            1995
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    Consumer Online Forum Europe                            1995
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    Plug.In: The Jupiter Online Music Forum                 1996
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    Online Advertising Forum                                1996
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    Travel: The Jupiter Online Travel Forum                 1997
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    Shopping Forum                                          1998
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    Financial Services Forum                                1998
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    MindShare: The Jupiter Executive Forum                  1999
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    Online Entertainment Forum                              1999
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    Online Health Forum                                     2000
  -----------------------------------------------------------------------
    Internet Commerce Forum Latin America                   2000
  -----------------------------------------------------------------------
    Shopping Forum Europe                                   2000
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    Global Online Advertising Forum                         2000
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    B-to-B Commerce Forum                                   2000
  -----------------------------------------------------------------------
    Internet Commerce Forum Scandinavia                     2000
  -----------------------------------------------------------------------
    Internet Commerce Forum Australia                       2000
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</TABLE>

     Following the completion of our pending acquisition of Net Market Makers,
we will be producing the following three additional conferences during 2000:

     - ground.zero3;

     - ground.zero4; and

     - First Mover Advantage.

The ground.zero conferences will bring together Internet entrepreneurs from
across industry verticals with leading investors and venture capitalists to
foster debate and provide a forum for discussion. First Mover Advantage, an
executive conference targeted at CEOs and top-level executives of
business-to-business Internet companies, will highlight the emerging best
practices in various Internet markets.

     As Internet commerce continues to grow, we anticipate that we will expand
the number of events that we produce as well as attract higher attendance at our
conferences. We also expect to devote more resources to promoting events outside
the United States or events with more of an international focus.

CUSTOM AND OTHER RESEARCH

     We also provide other research products and services to clients, including
book-length research reports and customized research.

     We annually publish between 10 to 20 book-length research studies that are
available for purchase through direct mail or on our Web site. Sales of these
studies are an important way to expose new companies and executives to our
research.

     We also perform customized, client-focused research projects relating to
Internet commerce on a limited basis. These projects allow our clients to take
advantage of the knowledge and experience of our

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research analysts and to develop structured, detailed responses to specific
issues relevant to their business. Custom studies often form the basis to
explore a new Research Service and, like our book-length studies, are an
effective way to expose new companies and executives to our research products
and services.

CLIENTS

     Our client base has rapidly expanded since we launched Research Services.
In addition, our client base has diversified from primarily technology and media
companies to include large and small companies in the Internet, media,
telecommunications, technology, financial services, consumer products, retail,
travel and professional services industries. Many of our clients have limited
experience with Internet commerce or operating an online business. The users of
our research products and services at our client companies hold diverse
positions, demonstrating the importance of Internet commerce to a company's
overall strategy and development. In addition to chief executive officers and
presidents, our users include marketing, business development, operations,
strategic planning and information technology executives.

     As of December 31, 1999, we had 987 contracts for our Research Services. As
of December 31, 1999, our clients included approximately 19% of the Fortune 500
companies, approximately 15% of the BusinessWeek Global 1000 companies and
approximately 66% of the Media Metrix Top 50 Web and Digital Media properties.
We expect that our client base will continue to expand as we introduce new
Research Services and increase our sales and marketing initiatives. We also
believe there is significant opportunity to increase our penetration of large
corporate clients. In addition, we expect the number of our international
clients to increase significantly as the use of the Internet grows in other
parts of the world and as we introduce additional products and services targeted
to international markets.

     To date, none of our clients have accounted for more than 2% of the total
annual revenues generated from Research Services.

     The following is a representative list of our larger clients in terms of
revenue:

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                                                                                                 PROFESSIONAL
    CONSUMER BRANDS       FINANCIAL SERVICES          INTERNET                MEDIA                SERVICES
    ---------------       ------------------          --------                -----              ------------
<S>                      <C>                     <C>                  <C>                    <C>
Cross Pen                Bear Stearns            America Online       Cablevision            DoubleClick
Hallmark                 Donaldson, Lufkin &     Inktomi              Landmark               Fallon McElligot
Heineken                 Jenrette                MP3.com              Communications         Fleishman-Hilliard
Sony                     Goldman Sachs           RealNetworks         MediaOne               iXL Enterprises
Vitamin Shoppe           Putnam Investments      Sportsline USA       Toronto Globe &        Zefer
                         Soundview Technology                         Mail
                                                                      WWF
</TABLE>

<TABLE>
<CAPTION>
        RETAIL          TECHNOLOGY        TELECOM             TRAVEL
        ------          ----------        -------             ------
  <S>                 <C>              <C>             <C>
  Amway               Compaq           Bell Atlantic   AMR Corp.
  Mall.com            Dell             BellSouth       Continental Airlines
  Sephora             Gateway          British         Pacific Access
  thechildrensplace   IBM              Telecom         Starwood Hotels
  Value America       Intel            France Telecom  SwissAir
                                       Sprint
</TABLE>

SALES AND MARKETING

     We sell and market our research products and services primarily through our
direct sales force, which was comprised of 93 sales representatives as of March
20, 2000. This represents an increase from 21 sales representatives at the end
of 1998 and 58 sales representatives at the end of 1999. As with our research
analysts, our sales representatives have diverse backgrounds and experience in a
number of different industries. In addition, we have been very successful at
retaining our sales representatives. During each of the past two years, we have
retained over 90% of our sales representatives.

     Our sales representatives currently consist of strategic account managers,
who are each responsible for 20 to 30 multinational companies, and geographic
account managers, who are each responsible for specific territories and
assisting the strategic account managers in the territory. Our strategic account
managers are
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focused on selling a broad array of products and services across a global
enterprise. Unlike many of our direct and indirect competitors, almost all of
our sales representatives are located in the territories that they cover. We
believe that this allows us to develop stronger relationships with our current
and potential clients and to better understand the changing needs of our
clients. We have implemented a training program for all of our new sales
representatives and believe that this program has been effective in enabling our
sales representatives to quickly and effectively solicit new clients. Sales
representatives receive a base salary and are eligible for commissions based on
new business and renewals.

     We expect to significantly increase the number of our sales representatives
as we grow the business and increase our international operations. We also
intend to capitalize on our joint venture arrangement in Japan to significantly
expand the sale of our research products and services to Japanese companies, and
expect to shortly add six sales representatives in Japan. In addition to our
sales representatives, we use independent sales distributors to sell our
products and services in Brazil, Singapore and Israel. We are currently
exploring similar distribution arrangements in other countries and may enter
into additional agreements of this nature in the future.

     We have developed a number of strategies and programs to build awareness of
the Jupiter brand and to position the company as the definitive research
resource for Internet commerce. We employ an active press relations team, which
responds to hundreds of press inquiries on a weekly basis, and an in-house
promotions/advertising staff, which is responsible for developing sales
literature and direct mail campaigns and managing our advertising efforts. Our
analysts are frequently quoted in articles on the Internet and e-commerce that
appear in major newspapers, magazines and industry periodicals. In addition, we
actively encourage our research analysts to speak at non-Jupiter industry and
corporate events in order to enhance our reputation and promote our diverse
products. We also host numerous breakfast forums around the world which are
targeted at potential customers and designed to enhance our visibility and
reputation. During 1999, we hosted a total of 78 forums which collectively had
over 4,800 guests. We also devote significant resources to promoting our
numerous research products and services to the thousands of individuals
attending our conferences. Lastly, we use our Web site as a tool to market the
Jupiter name and expose potential customers to our products.

RESEARCH ANALYSTS AND METHODOLOGY

     Our research products and services are generated by a growing team of
research professionals, including research analysts, an independent data
research group and a dedicated staff to handle client inquiries. As of March 20,
2000, we employed a total of 96 research professionals, including 69 analysts.
The knowledge and experience of our research professionals, particularly our
analysts, are the crucial elements in our ability to provide high-quality,
timely and original research. Our analysts have extensive industry experience
and varied backgrounds. We recruit them from a number of different industries,
including management consulting and research firms, financial services,
publishing, entertainment and advertising. We believe that the diverse
backgrounds and experiences of our analysts allow us to provide original and
prescriptive research and analysis which frequently challenges the conventional
wisdom and viewpoints promoted by others. We expect to significantly expand the
number of our research analysts as we grow the business and increase the number
of our Research Services.

     Our research methodology enables us to deliver compelling, data-driven and
timely analysis across all of our Research Services. We support our research
professionals with in-house primary research tools and proprietary databases.
Our dedicated data research group delivers innovative survey design, sample
building and data weighing and processing. This group provides each of our
reports with rigorously tested hypotheses that yield action-oriented analysis.
Our data analysis employs a wide set of data-gathering tools, including the
following:

     - Market Forecasting.  We build complex econometric models to capture
       current online activity and forecast user participation, costs and
       revenue. These models define key growth levers, market drivers and market
       inhibitors, providing clients with a clear analytical framework for
       considering upcoming changes in their sector.

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     - Primary Consumer Research.  We conduct our primary research in alliance
       with NFO Worldwide, a leading provider of consumer survey market
       research. By accessing NFO's household panel of 575,000 U.S. homes, over
       125,000 of which are online, we regularly contact consumer households to
       assess technology trends. In addition, we regularly commission research
       surveys throughout the world and are currently conducting research
       surveys in Europe, Australia, Canada, Japan and Brazil.

     - Customer Valuation Models.  Our analysts construct scenario-driven models
       for measuring the lifetime value of interactive consumers. These tools
       inform our analysis and recommendations and assist clients in identifying
       the ultimate value in acquiring and retaining visitors and customers.

     - Operational Benchmark Models.  We develop models that determine the
       current and future costs, infrastructure needs, visit capacity,
       transaction volume and other operational metrics required to manage
       expected user demand. These models measure forecasted operational
       benchmarks for the industry and individual Web sites to help clients
       appropriately invest in building their interactive technology
       infrastructure.

     - Executive Surveys.  We conduct dozens of formal surveys each year with
       top industry executives to explore their strategies, attitudes and
       intentions. These surveys evaluate industry trends and changes and
       provide our analysts with an important measure against which to test
       assumptions and hypotheses.

     - Web Site Functionality Data.  Our analysts use WebTrack, a
       Jupiter-developed database to measure the performance of various Web
       technologies and site features. Based on systematic quarterly research on
       nearly 300 consumer Web sites, WebTrack provides an overview of the
       distribution of technology services, content and functionality among
       these sites.

     - Case Studies.  Through extensive interviews with industry executives,
       analysis of public documents and secondary research, we compile hundreds
       of case studies each year. These studies identify the strategic
       direction, strengths and weaknesses and key partnerships of all major
       Internet commerce companies.

     All of our research products are subject to a stringent editorial and
review process to ensure that every report is accurate, well-written and useful
to our clients. We maintain consistency among the formats of our research
reports across our Research Services so as to ensure clarity and readability by
all of our clients. Each research topic is first subject to a series of
discussions and meetings to define the scope of the topic, assess the relevance
and importance of the research and highlight key themes and questions. Prior to
publication, each research report is subject to ongoing review and comment from
other analysts and research management.

COMPETITION

     We believe that the primary competitive factors determining success in our
markets include the quality and timeliness of our research and analysis, our
ability to offer products and services that meet the changing needs of our
customers, the prices we charge for our various research products and general
economic conditions. We believe that we compete favorably with respect to each
of these factors. In addition, we believe that we distinguish ourselves from our
competitors as a result of the depth and breadth of our Research Services, the
extent to which we provide access to our research analysts, the quality of our
research analysts and sales representatives and the primary research tools and
proprietary databases that we have developed internally.

     Our principal current competitor is Forrester Research. In 1999, Gartner
Group, our largest stockholder, began competing directly in providing research
products related to Internet commerce. A number of other companies compete with
us in providing research and analysis related to a specific industry or
geographic area. In addition, our competitors include information technology
research firms, business consulting and accounting firms, electronic and print
publishing companies and equity analysts employed by financial services
companies.
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     We expect competition to increase because of the business opportunities
presented by the growth of Internet commerce around the world. Competition may
also intensify as a result of industry consolidation, because the markets in
which we operate face few substantial barriers to entry or because some of our
competitors may provide additional or complementary services, such as consulting
services. Our current and potential competitors include many companies that have
substantially greater financial, information gathering and marketing resources
than we have. For example, Gartner Group and Forrester Research and each had
higher revenues than we did during 1999, and each currently has greater
information gathering and marketing resources than we have. This may allow them
to devote greater resources than we can to the promotion of their brand and to
the development and sale of their products and services. We cannot assure you
that we will be able to compete successfully against current and future
competitors.

INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

     To protect our rights to our intellectual property, we rely on a
combination of trademark and copyright law, trade secret protections and
confidentiality agreements and other contractual arrangements with our employees
and third parties. We have registered the Jupiter, Jupiter Communications and
Internet Business Report marks in the United States, and we have pending
trademark applications for certain other trademarks in the United States. We
also have pending trademark applications for the Jupiter and Jupiter
Communications marks in various foreign jurisdictions. We provide our
proprietary research products to hundreds of different companies throughout the
world, including some companies that compete with us in some manner. As a
result, the protective steps we have taken may be inadequate to protect our
intellectual property and to deter misappropriation of the original research and
analysis that we develop. We also may be unable to detect the unauthorized use
of, or take appropriate steps to enforce, our intellectual property rights.
Moreover, effective trademark, copyright and trade secret protection may not be
available in every country in which we offer our research products and services
to the extent available in the United States.

     Our failure to adequately protect our intellectual property, either in the
United States or abroad, could harm the Jupiter brand or our trademarks, devalue
our proprietary research and analysis and affect our ability to compete
effectively. Defending our intellectual property rights could result in the
expenditure of significant financial and managerial resources, which could harm
our financial results.

     Furthermore, although we believe that our proprietary rights do not
infringe on the intellectual property rights of others, other parties may assert
claims against us that we have misappropriated a trade secret or infringed a
patent, copyright, trademark or other proprietary right belonging to them. Any
infringement or related claims, even if not meritorious, could be costly and
time consuming to litigate, may distract management from other tasks of
operating the business and may result in the loss of significant rights and the
loss of our ability to operate our business.

EMPLOYEES

     As of March 20, 2000, we had 353 full-time employees, including 93 sales
representatives and 96 research staff, of which 69 were analysts. Our
compensation policy promotes employee ownership, and we believe that this policy
contributes to the high retention rates of our research analysts and sales
representatives. Over 90% of our employees, including all of our research
analysts and sales representatives, own options to purchase our securities.

     All of our research analysts and sales representatives, as well as all of
our executive officers, have entered into agreements that prohibit them from
being employed by a competitive company for a period of one year following their
termination of employment with us. None of our employees are represented under
collective bargaining agreements. We believe that our relations with our
employees are good.

CORPORATE HISTORY; RECENT ACQUISITIONS

     Our business was formed on December 1, 1994 with the creation of Jupiter
Communications, LLC, a New York limited liability company. We changed our
structure from a limited liability company to a "C"
                                       12
<PAGE>   13

corporation at the closing of our initial public offering in October 1999. This
change was made by merging Jupiter Communications, LLC with and into Jupiter
Communications, Inc., a Delaware corporation. Membership units in Jupiter
Communications, LLC were exchanged in the merger for shares of common stock of
Jupiter Communications, Inc. We received net proceeds of approximately $59.9
million in our initial public offering of common stock.

     On February 28, 2000, we signed definitive agreements to acquire Internet
Research Group and Net Market Makers, Inc., two privately-held companies, for an
aggregate consideration of approximately $50.6 million in cash and common stock.
We completed our acquisition of Internet Research Group on March 16, 2000. We
expect to complete our acquisition of Net Market Makers, which is subject to
various closing conditions, prior to April 15, 2000.

     Internet Research Group, based in Los Altos, California, is a leading
research and consulting firm focused exclusively on Internet infrastructure
markets. IRG has helped develop e-business strategies for clients such as Adobe
Systems, Honeywell, Bell Atlantic, General Electric, Hewlett-Packard, IBM,
Oracle and Sun Microsystems. In its Internet infrastructure practices, IRG has
served clients such as Akamai Technologies, CacheFlow, Lucent, Network Appliance
and Novell. As part of the acquisition, we have added 18 experienced research
analysts.

     Net Market Makers, based in Berkeley, California, is a leading provider of
information and analysis regarding business-to-business e-commerce. Net Market
Makers currently produces four large conferences focused on major issues and
trends relating to business-to-business e-commerce. Net Market Makers also
publishes a monthly newsletter, prepares research reports and provides
consulting services. Additionally, their Web site, located at www.nmm.com, is a
hub for business-to-business e-commerce.

                                       13
<PAGE>   14

                                  RISK FACTORS

     An investment in our company involves a high degree of risk. You should
carefully consider the risks below, together with the other information
contained in this report, before you decide to invest in our company. If any of
the following risks occur, our business, results of operations and financial
condition could be harmed, the trading price of our common stock could decline,
and you could lose all or part of your investment.

IF WE ARE UNABLE TO ATTRACT AND RETAIN EXPERIENCED PERSONNEL, THE QUALITY OF OUR
RESEARCH PRODUCTS AND SERVICES MAY DECLINE, AND OUR ABILITY TO SELL OUR PRODUCTS
AND SERVICES MAY BE HARMED.

     Our success depends in large part on the continued contributions of our
senior management team, research analysts and sales representatives. As of March
20, 2000, we had 69 research analysts and 93 sales representatives. We expect to
increase our hiring of research analysts and sales representatives significantly
in the next few years. We face intense competition in hiring and retaining
personnel from, among others, technology and Internet companies, market research
and consulting firms, print and electronic publishing companies and financial
services companies. Many of these firms have substantially greater financial
resources than we do to attract and retain qualified personnel from a limited
pool of attractive candidates. In addition, some people that we may attempt to
hire could be subject to non-competition agreements that could impede our
recruitment efforts. To the extent that we are unable to retain our existing
management, research analysts or sales representatives or that we are unable to
increase the number of research analysts and sales representatives that we hire,
our business and financial results may suffer.

RAPID GROWTH IN OUR BUSINESS COULD STRAIN OUR MANAGERIAL, OPERATIONAL AND
FINANCIAL RESOURCES.

     The anticipated future growth of our business will place a significant
strain on our managerial, operational and financial resources. We had 142
employees at December 31, 1998, 270 employees at December 31, 1999 and 353
employees at March 20, 2000. We anticipate hiring a substantial number of
research analysts, sales representatives and other employees in the foreseeable
future to expand our product and service offerings and to expand our sales of
such products and services. We also expect to continue to open additional
offices. For example, we recently announced an agreement to enter into a joint
venture to launch operations in Japan and expect to open offices in Munich,
Germany and Sydney, Australia in the second quarter of 2000. Furthermore, we
recently signed a lease for a new facility in New York City where we plan to
consolidate our current locations in New York City plus provide for future
growth. As we expand, we expect that we will need to continually improve our
financial and managerial controls, billing systems, reporting systems and
procedures. In addition, as we expand we will also need to increase our employee
training efforts. If we are unable to manage our growth effectively, our
business and financial results may suffer.

BECAUSE WE HAVE RECENTLY INTRODUCED MANY OF OUR PRODUCTS AND SERVICES, YOU HAVE
LIMITED INFORMATION UPON WHICH YOU CAN EVALUATE OUR BUSINESS.

     We have recently launched many of the Research Services that we offer. As a
result, we have a limited operating history upon which you can evaluate our
business and the products and services that we offer. Due to our limited
operating history, it is difficult or impossible for us to predict future
results of operations. Moreover, due to our limited operating history, any
evaluation of our business and prospects must be made in light of the risks and
uncertainties frequently encountered by companies in new and rapidly evolving
markets such as ours. Many of these risks and uncertainties are discussed
elsewhere in this section. We cannot assure you that we will be successful in
addressing these risks and uncertainties. Our failure to do so could cause our
business and financial results to suffer.

                                       14
<PAGE>   15

WE HAVE A HISTORY OF OPERATING LOSSES WHICH MAY CONTINUE FOR THE FORESEEABLE
FUTURE.

     We have incurred substantial costs to create, market and distribute our
products and services, to retain qualified personnel, including management,
research analysts and sales representatives, and to grow our business. As a
result, we incurred net losses of approximately $2.1 million in 1998 and
$630,000 in 1999. As a percentage of total revenues, our net losses equaled
14.4% in 1998 and 1.7% in 1999. As of December 31, 1999, our accumulated deficit
totaled $1.3 million.

     We intend to invest heavily in new products and services, leasehold and
technology improvements, new research and sales personnel and international
expansion. As a result, we will need to achieve significant revenue increases to
achieve and maintain profitability. The number of clients for our research
products and services, as well as the number of attendees to our conferences,
may grow more slowly than we anticipate or may even decrease in the future. In
addition, even if we become profitable, we may not sustain or increase our
profits on a quarterly or annual basis in the future.

OUR OPERATING RESULTS MAY FLUCTUATE IN FUTURE PERIODS, WHICH MAY CAUSE
VOLATILITY OR A DECLINE IN THE PRICE OF OUR STOCK.

     Our revenues, expenses and operating results have varied in the past and
may fluctuate significantly in the future due to a variety of factors that are
outside of our control. These factors include, among others:

     - the level and timing of new business and renewals of subscriptions to our
       research products and services;

     - changes in the market demand for research products or analysis regarding
       Internet commerce;

     - the levels of attendance at our Internet conferences; and

     - the extent to which we experience increased competition.

     The above factors could affect our quarterly as well as long-term financial
results. In particular, changes in the demand for our products, competition or
the levels of attendance at our Internet conferences each could have both
short-term and long-term adverse effects on our business.

     Our revenues, expenses and operating results may also fluctuate
significantly in the future as a result of business decisions made by us. These
decisions include, among others:

     - the timing of the introduction and marketing of our new research products
       and services;

     - the timing of our conferences;

     - changes in operating expenses; and

     - the timing of acquisitions and the impact on our operations and our
       operating results.

     The sales of our research products and services and the success of our
conferences are difficult to forecast accurately. If our revenues fall short of
expectations, we may not be able to adjust our fixed expenses to compensate for
this shortfall on a timely basis. Further, as a strategy for remaining
competitive, we may have to make pricing, service or marketing decisions that
could cause our business and financial results to suffer.

     Due to all the foregoing factors and other risks discussed in this section,
you should not rely on quarter-to-quarter comparisons of our results of
operations as an indication of future performance. It is possible that in some
future periods our results of operations may be below the expectations of
investors. In this event, the price of our common stock is likely to fall.

BECAUSE OUR REVENUES ARE SUBSTANTIALLY DEPENDENT ON THE SALE OF OUR RESEARCH
SERVICES, OUR BUSINESS MAY SUFFER IF WE HAVE DIFFICULTY IN ACQUIRING OR
RETAINING SUBSCRIBERS.

     Our business and financial results are dependent on our ability to attract
and retain clients for our Research Services. In addition, our business model
assumes that we will be able to increase the level of research sales over time
to our existing clients. Revenues from the sale of Research Services, as a
percentage of our total revenues, were 41.9% in 1998 and 60.7% in 1999.

                                       15
<PAGE>   16

     Our ability to acquire and retain Research Services clients and our ability
to increase sales to existing clients is subject to a number of risks, including
the following:

     - We may be unsuccessful in delivering high-quality and timely research
       analysis to our clients;

     - We may be unsuccessful in anticipating and understanding market trends
       and the changing needs of our clients;

     - The use of the Internet as a medium for commerce, both in the United
       States and abroad, may not continue to grow as we currently anticipate;

     - Our marketing programs designed to attract and retain clients may not
       succeed; and

     - We may not be able to hire and retain a sufficiently large number of
       research and sales personnel in a very competitive job market.

     If we are unable to retain existing clients, increase sales to existing
clients or attract a significant number of new Research Services clients, our
business and financial results may suffer.

OUR BUSINESS MAY SUFFER IF WE ARE UNABLE TO ATTRACT ATTENDEES, SPONSORS AND
EXHIBITORS TO OUR CONFERENCES.

     Our business and financial results depend in part on our ability to attract
attendees, sponsors and exhibitors to our growing number of conferences.
Revenues from conferences, as a percentage of our total revenues, were 33.2% in
1998 and 29.6% in 1999. We cannot assure you that we will be able to select
topics for our conferences that potential attendees, sponsors and exhibitors
will find timely and interesting. We also cannot assure you that our competitors
will not produce conferences on similar topics or that we will continue to be
able to attract prominent industry leaders to participate in our conferences. If
we are unable to produce compelling events, if we face increased competition for
our conferences or if we are unable to attract prominent speakers, the growth of
our conference business will be hindered. Our business and financial results may
also suffer if we are forced to cancel any conferences as a result of inclement
weather or some other unexpected event.

WE MAY NOT BE ABLE TO SUCCESSFULLY MAKE OR INTEGRATE ACQUISITIONS OF OTHER
COMPANIES, SERVICES OR PRODUCTS.

     We have limited experience in acquiring other companies, services or
products. Although we have no present understanding or agreement relating to any
acquisition, other than our pending acquisition of Net Market Makers, Inc., we
do anticipate making other acquisitions in the future. We cannot assure you,
however, that we will be able to complete future acquisitions successfully or to
integrate an acquired entity with our current business. In addition, the key
personnel of the acquired company may decide not to work for us. If we make
other types of acquisitions, we could have difficulty assimilating the acquired
services or products. These difficulties could disrupt our current business,
distract our management and employees, increase our expenses and adversely
affect our results of operations. Furthermore, we may incur debt or issue equity
securities to pay for any future acquisitions. The issuance of equity securities
could be dilutive to our existing shareholders.

OUR BUSINESS MAY SUFFER IF WE PROVE UNABLE TO ANTICIPATE MARKET TRENDS OR IF WE
FAIL TO PROVIDE INFORMATION THAT IS USEFUL TO OUR CLIENTS.

     Our success depends in large part on our ability to anticipate, research
and analyze rapidly changing technologies and industries and on our ability to
provide this information in a timely and cost-effective manner. If we are unable
to continue to provide credible and reliable information that is useful to
companies engaged in online commerce, our business and financial results may
suffer.

     Our research products and services, as well as our conferences, focus on
Internet commerce. Internet commerce is relatively new and is undergoing
frequent and dramatic changes, including the introduction of new products and
the obsolescence of others, shifting business strategies and revenue models, the
formation of numerous new companies and high rates of growth. Because of these
rapid and continuous
                                       16
<PAGE>   17

changes in the Internet commerce markets, we face significant challenges in
providing timely analysis and advice. Many of the industries and areas on which
we focus are relatively new, and it is very difficult to provide predictions and
projections as to the future marketplace, revenue models and competitive
factors. In addition, many companies have not embraced the use of the Internet
as a medium for commerce and are unclear as to how to allocate corporate
resources effectively. As a result, some companies may conclude that our
research products are not useful to their businesses. Further, the need to
continually update our research requires the commitment of substantial financial
and personnel resources.

     If our predictions or projections prove to be wrong, or if we are unable to
continually update our information, our reputation may suffer and demand for our
research products and services may decline. In addition, if companies do not
agree with our analysis of market trends and the areas on which we choose to
focus our efforts, our business and financial results may suffer.

WE FACE INTENSE COMPETITION IN PROVIDING OUR RESEARCH PRODUCTS AND SERVICES, AS
WELL AS IN PRODUCING CONFERENCES, AND SUCH COMPETITION IS LIKELY TO INCREASE IN
THE FUTURE.

     We may not be able to compete successfully against current or future
competitors, and the competitive pressures that we face may cause our business
and financial results to suffer. Our principal current competitor is Forrester
Research, Inc. In 1999, Gartner Group, Inc., our largest stockholder, began
competing directly in providing research products related to Internet commerce.
Although Gartner Group has not been actively involved in our day-to-day
operations since it first invested in us in October 1997, we have provided them
with select confidential and proprietary data. As a result, Gartner Group could
use this confidential and proprietary data in developing and marketing competing
products and services. A number of other companies compete with us in providing
research and analysis related to a specific industry or geographic area. In
addition, our competitors include information technology research firms,
business consulting and accounting firms, electronic and print publishing
companies and equity analysts employed by financial services companies.

     Our ability to compete both in the United States and abroad depends upon
many factors, many of which are outside of our control. We believe that the
primary competitive factors determining success in our markets include the
quality and timeliness of our research and analysis, our ability to offer
products and services that meet the changing needs of our customers, the prices
we charge for our various research products and general economic conditions.

     We expect competition to increase because of the business opportunities
presented by the growth of Internet commerce around the world. Competition may
also intensify as a result of industry consolidation, because the markets in
which we operate face few substantial barriers to entry or because some of our
competitors may provide additional or complementary services, such as consulting
services. Increased competition may result in reduced operating margins, loss of
market share and diminished value in our products and services, as well as
different pricing, service or marketing decisions.

     Our current and potential competitors include many companies that have
substantially greater financial, information gathering and marketing resources
than we have. For example, Gartner Group and Forrester Research each had higher
revenues than we did during 1999, and each currently has greater marketing
resources than we have. This may allow them to devote greater resources than we
can to the promotion of their brand and to the development and sale of their
products and services. We cannot assure you that we will be able to compete
successfully against current and future competitors.

WE COULD FACE ADDITIONAL RISKS AND CHALLENGES IF WE CONTINUE TO EXPAND
INTERNATIONALLY.

     Our business plan calls for accelerated international growth. For example,
we recently announced an agreement to enter into a joint venture to launch
operations in Japan and expect to open offices in Munich, Germany and Sydney,
Australia in the second quarter of 2000. Expansion into new geographic
territories requires considerable management and financial resources and may
negatively impact our near-term results of operations.

                                       17
<PAGE>   18

     Our current international operations, as well as any future international
operations, are subject to numerous challenges and risks, including, but not
limited to, the following:

     - political and economic conditions in various jurisdictions;

     - fluctuations in currency exchange rates;

     - tariffs and other trade barriers;

     - adverse tax consequences; and

     - difficulties in protecting intellectual property rights in international
       jurisdictions.

     We cannot assure you that one or more of these factors would not harm any
current or future international operations.

     We also rely on local distributors in various countries, including
Singapore, Brazil and Israel, to distribute our Research Services, and we expect
our joint venture with Hikari Tsushin Capital, a wholly-owned subsidiary of
Hikari Tsushin, Inc., to provide us with a local presence in Japan to sell our
research and advisory services. If any of these distribution arrangements are
terminated, or if our joint venture agreement is terminated, we cannot assure
you that we will able to replace the terminated arrangement with an equally
beneficial arrangement. We also intend to enter into additional distribution
arrangements in other countries but we cannot assure you that we will be able to
do so on acceptable terms. Our receipt of revenues from these distribution
arrangements and our joint venture agreement may also be dependent on factors
which are beyond our control, including the efforts of the distributors and our
joint venture partner.

OUR BUSINESS MAY SUFFER IF THE USE OF THE INTERNET AS A COMMERCIAL MARKETPLACE
DOES NOT CONTINUE TO GROW.

     Because our company focuses solely on Internet commerce, our future success
depends on the continued development and acceptance of the Internet as a viable
commercial medium. However, the continued development and acceptance of the
Internet as a widely-used medium for commerce and communication is uncertain. A
number of factors could prevent such continued development and acceptance,
including the following:

     - unwillingness of companies and consumers to shift their purchasing from
       traditional vendors to online vendors;

     - security and authentication concerns with respect to the transmission of
       confidential information, such as credit card numbers, over the Internet;

     - privacy concerns, including those related to the ability of Web sites to
       gather user information without the user's knowledge or consent; and

     - significant uncertainty about the demand and market acceptance for
       Internet advertising and the lack of standards to measure the
       effectiveness of Internet advertising.

LAWS AND REGULATIONS COULD SLOW THE GROWTH OF THE INTERNET AND NEGATIVELY AFFECT
THE ACCEPTANCE OF THE INTERNET AS A COMMERCIAL MEDIUM.

     Laws and regulations regarding Internet companies and commercial
transactions conducted over the Internet could slow the growth in use of the
Internet generally and decrease the acceptance of the Internet as a commercial
medium. For example, as the popularity and use of the Internet increases, it is
possible that a number of laws and regulations may be adopted in the United
States or in other countries covering issues such as taxation, intellectual
property matters, advertising and other areas. We cannot predict the impact, if
any, that future laws or regulations may have on our business.

                                       18
<PAGE>   19

OUR BUSINESS MAY SUFFER IF WE ARE UNABLE TO MAINTAIN OR ENHANCE AWARENESS OF THE
JUPITER BRAND OR IF WE INCUR EXCESSIVE EXPENSES ATTEMPTING TO PROMOTE THE
JUPITER BRAND.

     We expect to expand our marketing activities to promote and strengthen the
Jupiter brand. Promoting and strengthening the Jupiter brand is critical to our
efforts to attract and retain clients for our research products, as well as to
increase attendance at our conferences. We believe that the importance of brand
recognition will likely increase due to the increasing number of competitors
entering our markets. In order to promote the Jupiter brand, in response to
competitive pressures or otherwise, we may find it necessary to increase our
marketing budget, hire additional marketing and public relations personnel or
otherwise increase our financial commitment to creating and maintaining brand
loyalty among our clients. If we fail to effectively promote and maintain the
Jupiter brand, or incur excessive expenses attempting to promote and maintain
the Jupiter brand, our business and financial results may suffer.

WE FACE POTENTIAL LIABILITY FOR INFORMATION THAT WE PUBLISH, PROVIDE AT
CONFERENCES OR DISSEMINATE THROUGH OUR RESEARCH ANALYSTS.

     As a publisher and distributor of original research, market projections and
trend analyses, we face potential liability based on a variety of theories,
including defamation, negligence, copyright or trademark infringement or other
legal theories based on the nature, publication or distribution of this
information. Such claims, whether brought in the United States or abroad, would
likely divert management time and attention and result in significant cost to
investigate and defend, regardless of the merit of any such claims. The filing
of any such claims may also damage our reputation as a high-quality provider of
unbiased, timely analysis and result in client cancellations or overall
decreased demand for our products and services. In addition, if we become
subject to these types of claims and are not successful in our defense, we may
be forced to pay substantial damages. Our insurance may not adequately protect
us against these claims.

DISRUPTION OF OUR WEB SITE DUE TO SECURITY BREACHES AND SYSTEM FAILURES COULD
HARM OUR BUSINESS AND RESULT IN CLIENT CANCELLATIONS.

     Our infrastructure and the infrastructure of our service providers are
vulnerable to security breaches, computer viruses or similar disruptive problems
and system failures. These systems are also subject to telecommunications
failures, power loss and various other events. Any of these events, whether
intentional or accidental, could lead to interruptions or disruptions in the
general operation of our business. In addition, any of these events could also
lead to interruptions, delays or cessation of operation of our Web site, which
provides access to and distribution of many of our research products and
services. For example, many of our Research Services clients pay us so that
their employees can read our research solely on our Web site. As a result,
providing unimpeded access to our Web site is critical to servicing our clients
and providing superior customer service. Our inability to provide continuous
access to our Web site could cause some of our clients to discontinue purchasing
our research products and services, prevent or deter some people from purchasing
our research products and services and harm our business reputation.

WE ARE DEPENDENT ON KEY MANAGEMENT PERSONNEL FOR OUR FUTURE SUCCESS.

     Our future success will depend in part on the continued service of a number
of key management personnel. We do not carry key person life insurance on any of
our management personnel. The loss of key management personnel, in particular
Gene DeRose, our Chief Executive Officer, or Kurt Abrahamson, our President and
Chief Operating Officer, could harm our business and financial results.

IF WE FAIL TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY OR FACE A CLAIM OF
INTELLECTUAL PROPERTY INFRINGEMENT BY A THIRD PARTY, WE MAY LOSE OUR
INTELLECTUAL PROPERTY RIGHTS AND BE LIABLE FOR SIGNIFICANT DAMAGES.

     We provide our proprietary research products to hundreds of different
companies throughout the world, including some companies that compete with us in
some manner. As a result, any protective steps we have taken may be inadequate
to protect our intellectual property and to deter misappropriation of the

                                       19
<PAGE>   20

original research and analysis that we develop. We also may be unable to detect
the unauthorized use of our intellectual property or take appropriate steps to
enforce our intellectual property rights. Moreover, effective trademark,
copyright and trade secret protection may not be available in every country in
which we offer our research products and services to the extent these
protections are available in the United States.

     Our failure to adequately protect our intellectual property, either in the
United States or abroad, could harm the Jupiter brand or our trademarks, devalue
our proprietary research and analysis and affect our ability to compete
effectively. Defending our intellectual property rights could result in the
expenditure of significant financial and managerial resources, which could harm
our financial results.

     Furthermore, other parties may assert claims against us that we have
misappropriated a trade secret or infringed a patent, copyright, trademark or
other proprietary right belonging to them. Any infringement or related claims,
even if not meritorious, could be costly and time consuming to litigate, may
distract management from other tasks of operating the business and may result in
the loss of significant rights and the loss of our ability to operate our
business.

OUR DIRECTORS, OFFICERS AND PRINCIPAL STOCKHOLDERS EXERCISE SIGNIFICANT CONTROL
OVER US.

     As of March 20, 2000, our officers, directors and existing stockholders who
owned greater than 5% of our outstanding common stock, and entities affiliated
with them, in the aggregate, beneficially owned approximately 68.9% of our
common stock. Specifically, Gartner Group, our largest stockholder, beneficially
owned approximately 23.6% of our common stock. These stockholders acting
together are, and Gartner Group acting alone may be, able to exert substantial
influence over all matters requiring approval by our stockholders. These matters
include the election and removal of directors and any merger, consolidation or
sale of all or substantially all of our assets. In addition, they may dictate
the management of our business and affairs. This concentration of ownership
could have the effect of delaying, deferring or preventing a change in control,
or impeding a merger, consolidation, takeover or other business combination.

FUTURE SALES OF OUR COMMON STOCK MAY NEGATIVELY AFFECT OUR STOCK PRICE

     Sales of a substantial number of shares of our common stock in the public
market could cause the market price of our common stock to decline and could
impair our ability to raise additional capital through the sale of equity
securities.

OUR STOCK HAS EXPERIENCED, AND MAY CONTINUE TO EXPERIENCE, PRICE AND VOLUME
FLUCTUATIONS.

     The market price of our common stock has fluctuated in the past and is
likely to continue to be highly volatile and could be subject to wide
fluctuations. In addition, the market prices of the securities of
Internet-related companies have been especially volatile. These fluctuations
often have been unrelated or disproportionate to the operating performance of
these companies. These broad market and industry factors may materially
adversely affect the market price of our common stock regardless of our actual
operating performance. In the past, companies that have experienced volatility
in the market price of their stock have been the object of securities class
action litigation. If we were the object of securities class action litigation,
it could result in substantial costs and a diversion of our management's
attention and resources.

WE CANNOT PREDICT OUR FUTURE CAPITAL NEEDS, AND WE MAY NOT BE ABLE TO SECURE
ADDITIONAL FINANCING.

     We may need to raise additional funds in the future to fund our operations,
to expand or enhance the range of products and services we offer or to respond
to competitive pressures and/or perceived opportunities. We cannot be sure that
additional financing will be available on terms favorable to us, or at all. If
adequate funds are not available when required or on acceptable terms, we may be
forced to cease our operations, and even if we are able to continue our
operations, our business and financial results may suffer.

                                       20
<PAGE>   21

WE HAVE ANTI-TAKEOVER PROVISIONS WHICH MAY MAKE IT DIFFICULT FOR A THIRD PARTY
TO ACQUIRE US.

     Provisions of our certificate of incorporation, our bylaws and Delaware law
could make it more difficult for a third party to acquire us, even if doing so
might be beneficial to our stockholders.

WE DO NOT PLAN TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE.

     We have not declared or paid any cash dividends on our capital stock since
inception. We intend to retain any future earnings to finance the operation and
expansion of our business and do not anticipate paying any cash dividends in the
foreseeable future.

ITEM 2.  PROPERTIES

     Our headquarters are currently located in a leased facility in New York,
New York, consisting of approximately 32,500 square feet of office space. We
also lease office space in San Francisco, California, Los Altos, California,
London, England and Stockholm, Sweden.

     We recently signed a lease for a new 112,000 square foot facility in New
York City where we plan to consolidate our current offices in New York City plus
provide for future growth. We are also in the process of acquiring office space
in Munich, Germany and Sydney, Australia.

ITEM 3.  LEGAL PROCEEDINGS

     We are not a party to any material legal proceedings.

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

     None.

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

                          PRICE RANGE OF COMMON STOCK

     Our common stock has been quoted on the Nasdaq National Market under the
symbol JPTR since our initial public offering on October 8, 1999. The following
table sets forth, for the periods indicated, the high and low sales prices per
share of the common stock as reported on the Nasdaq National Market:

<TABLE>
<CAPTION>
                                                                 HIGH     LOW
1999:                                                            ----     ---
<S>                                                             <C>      <C>
Fourth Quarter (from October 8, 1999).......................    $47.38   $21.00
</TABLE>

     On December 31, 1999, the last reported sale price of our common stock on
the Nasdaq National Market was $30.25. On March 27, 2000, the last reported sale
price of our common stock on the Nasdaq National Market was $18.25.

                                    HOLDERS

     As of March 20, 2000, there were approximately 43 holders of record of our
common stock.

                                DIVIDEND POLICY

     We have never declared or paid any cash dividends on our capital stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business and do not expect to pay any cash dividends for the foreseeable
future.

                                       21
<PAGE>   22

                    RECENT SALES OF UNREGISTERED SECURITIES

     In March 2000, we issued an aggregate of 579,790 shares of common stock in
exchange for all the outstanding capital stock of Internet Research Group.

     In July 1999, we acquired all of the stock of Intelligence SE AB, a Swedish
research company, in exchange for 137,000 Class B (Non-Voting) units with an
aggregate value of $808,000.

     In October 1999, we acquired all of the stock of New Media Holdings PTY,
Ltd. in exchange for 20,000 Class B (Non-Voting) units with an aggregate value
of $320,000.

                            USE OF PROCEEDS FROM IPO

     On October 7, 1999, the Securities and Exchange Commission declared
effective our Registration Statement on Form S-1 (Registration No. 333-84175).
On October 14, 1999, pursuant to this Registration Statement, we completed our
initial public offering of 3,258,750 shares of our common stock (including
133,750 shares sold upon exercise of the underwriters' over-allotment option) at
an initial public offering price of $21.00 per share. Proceeds to us from our
initial public offering, after calculation of the underwriters' discount and
commission of approximately $4.8 million and offering costs of $1.1 million,
totaled approximately $62.5 million. None of the expenses incurred in our
initial public offering were direct or indirect payments to our directors,
officers, general partners or their associates, to persons owning ten percent or
more of any class of our equity securities or to our affiliates. As of December
31, 1999, none of the net proceeds from our initial public offering had been
utilized.

                                       22
<PAGE>   23

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

     The selected consolidated balance sheet data as of December 31, 1998 and
1999 and the selected consolidated statement of operations data for the years
ended December 31, 1997, 1998 and 1999 have been derived from our audited
consolidated financial statements included elsewhere herein. The selected
balance sheet data as of December 31, 1995, 1996 and 1997, and the statement of
operations data for 1995 and 1996, have been derived from our audited financial
statements not included herein. You should read this selected consolidated
financial data in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations," our consolidated financial
statements and the notes to those statements included elsewhere herein.

<TABLE>
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                                    ----------------------------------------------------
                                                      1995       1996       1997       1998       1999
                                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                 <C>        <C>        <C>        <C>        <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues:
  Research Services...............................  $    237   $    566   $  1,850   $  6,183   $ 23,134
  Conferences.....................................     2,024      2,686      3,426      4,890     11,270
  Other...........................................     1,439      3,000      3,229      3,675      3,680
                                                    --------   --------   --------   --------   --------
    Total revenues................................     3,700      6,252      8,505     14,748     38,084
Cost of services and fulfillment..................     2,893      4,687      6,259      9,676     16,898
                                                    --------   --------   --------   --------   --------
    Gross profit..................................       807      1,565      2,246      5,072     21,186
Other operating expenses..........................
  Sales and marketing.............................       254        514      1,558      3,173     11,384
  General and administrative......................       990      1,589      2,855      3,897     10,099
  Depreciation and amortization...................        35         75        100        193      1,278
                                                    --------   --------   --------   --------   --------
    Total other operating expenses................     1,279      2,178      4,513      7,263     22,761
                                                    --------   --------   --------   --------   --------
Interest income...................................        --         --         17         54        743
                                                    --------   --------   --------   --------   --------
Loss before income taxes..........................      (472)      (613)    (2,250)    (2,137)      (832)
Income tax benefit................................        --         --         --         --        202
                                                    --------   --------   --------   --------   --------
Net loss..........................................  $   (472)  $   (613)  $ (2,250)  $ (2,137)  $   (630)
                                                    ========   ========   ========   ========   ========
Pro forma basic and diluted net loss per common
  share(1)........................................                                   $  (0.21)  $  (0.05)
                                                                                     ========   ========
Pro forma weighted average common shares
  outstanding(1)..................................                                     10,318     11,565
SELECTED CONSOLIDATED OPERATING DATA:
Number of Research Services contracts.............        13         66        145        421        987
Total contract value (in thousands)...............  $    315   $    923   $  2,509   $ 11,666   $ 40,081
Research Services deferred revenue (in
  thousands)......................................  $     78   $    313   $    614   $  5,639   $ 21,908
Number of employees...............................        18         61         88        142        270
Number of conferences.............................         6          7          8          9         10
</TABLE>

---------------
(1) Pro forma basic and diluted net loss per common share is computed by
    dividing net loss by the pro forma weighted average number of shares of
    common stock. Pro forma weighted average number of shares of common stock
    gives effect to our reorganization from an LLC to a "C" corporation as
    though the reorganization had occurred as of January 1, 1998. Pro forma
    weighted average shares do not include any common stock equivalents because
    inclusion of common stock equivalents would have been anti-dilutive.

                                       23
<PAGE>   24

<TABLE>
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                                    ----------------------------------------------------
                                                      1995       1996       1997       1998       1999
                                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                 <C>        <C>        <C>        <C>        <C>

CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents.........................  $      4   $      8   $  1,614   $    216   $ 57,222
Working capital...................................      (572)    (1,166)      (553)    (3,376)    55,029
Total assets......................................       907      1,474      3,463      6,867     97,180
Convertible notes payable.........................        --         --         --         --      3,500
Stockholders' equity/members' deficiency..........      (405)      (714)         9     (2,129)    61,498
</TABLE>

                                       24
<PAGE>   25

ITEM 7.  MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

     You should read the following discussion and analysis in conjunction with
our financial statements and related notes included in this report. This
discussion contains forward-looking statements that involve risks and
uncertainties. Please see "Risk Factors."

OVERVIEW

     We provide research and advice on Internet commerce. Senior executives at
our client companies utilize our research to make informed business decisions in
a complex and rapidly changing Internet economy. Our research, which is focused
solely on the global Internet economy, provides our clients with comprehensive
views of industry trends, forecasts and best practices. Our analysis, supported
by proprietary data, emphasizes specific, actionable findings.

     Our revenues consist of Research Services, conferences and other revenues.
For the year ended December 31, 1999, Research Services represented
approximately 60.7% of our total revenues. Jupiter Research Services is a
combination of proprietary written analysis, supporting data and access to our
analysts. We typically bill clients annually in advance and deliver the products
and services over the term of the contract. We also produce a wide range of
conferences which offer senior executives the opportunity to hear first-hand the
insights of our analysts and the leading decision makers in the Internet and
technology industries. Conference revenues consist of revenues from individual
attendees, sponsors, which display their logo in our conference program and/or
host a reception, and exhibitors, which receive a booth to promote their
companies. For the year ended December 31, 1999, conferences represented
approximately 29.6% of our total revenues. Other revenues, which consist
primarily of book-length studies, newsletters and custom research, represented
approximately 9.7% of our total revenues for the year ended December 31, 1999.

     Research Services contracts are renewable contracts, typically annual, and
payable in advance. Accordingly, a substantial portion of our billings is
initially recorded as deferred revenue and amortized into revenue over the term
of the contract. Commission expense related to Jupiter Research Services is also
initially deferred and amortized into expense over the contract period in which
the related revenues are earned and amortized to income. Our contracts are
non-cancelable and non-refundable. Billings attributable to our conferences and
other products and services are initially recorded as deferred revenue and
recognized upon the completion of the event or project.

     We have experienced rapid growth since our organization, and particularly
since our decision in late 1996 to focus our business on Research Services,
formerly known as Strategic Planning Services or SPS. Between 1995 and 1999, our
total revenues have grown from $3.7 million to $38.1 million, a compound annual
growth rate of 79.1%. For the year ended December 31, 1999, our revenues of
$38.1 million represented an increase of 158.2% over revenues of $14.7 million
for the year ended December 31, 1998. The number of our Jupiter Research
Services contracts has increased from 421 as of December 31, 1998 to 987 as of
December 31, 1999. Our total contract value has increased from $11.7 million on
December 31, 1998 to $40.1 million on December 31, 1999. We believe that total
contract value is a meaningful measure of the volume of our business. Total
contract value represents the annualized value of all outstanding Research
Services contracts without regard to the remaining duration of such contracts.
Total contract value, however, does not necessarily correlate to deferred
revenue. Deferred revenue represents unamortized revenue remaining on all
outstanding and billed contracts. As of December 31, 1999, deferred revenue
related to Research Services contracts totaled $21.9 million, which was 54.7% of
our total contract value as of such date.

     To date, a substantial portion of expiring Research Services contracts have
been renewed for an equal or higher amount. Approximately 76% of contracts
expiring during the year ended December 31, 1999 were renewed and approximately
97% of these contracts were renewed for an equal or larger dollar amount. With
this high customer renewal rate, we believe we have a growing base of recurring
revenues from our Research Services.

                                       25
<PAGE>   26

     We have a highly diversified client base, including companies in the
Internet, media, telecommunications, technology, financial services, retail,
travel, consumer products and professional services industries. No client
accounts for more than 2% of our total annual revenues.

     Cost of services and fulfillment represents the costs associated with
production and delivery of our products and services, including the costs of
salaries, bonuses and related benefits for our research and conference
personnel, all associated editorial, travel and support services, and the costs
of producing our conferences. Sales and marketing expenses include salaries,
bonuses, employee benefits, travel expenses, promotional costs, sales
commissions and other costs incurred in marketing and selling our products and
services. General and administrative expenses include the costs of our finance
and technology groups and other administrative functions.

     We have recorded deferred compensation of approximately $577,000,
representing the difference between the exercise price of unit options granted
in July 1999 and the fair value for accounting purposes of the underlying units
at the date of grant, assuming a fair value of our units on the date of grant of
$11.00 per share. The $577,000 deferred compensation cost is being amortized
over the vesting period of the options.

     We have incurred net losses since our formation. Our net loss was $613,000
in 1996, $2.3 million in 1997, $2.1 million in 1998 and $630,000 in 1999. As of
December 31, 1999, we had an accumulated deficit of $1.3 million. We expect to
incur significant expenditures in the future associated with our domestic and
international expansion strategies. In particular, we intend to continue to
expand our research and sales personnel, and we intend to continue to invest in
technology, leasehold improvements and the development of additional research
practices and modules.

RESULTS OF OPERATIONS

     The following table sets forth our results of operations for the years
ended December 31, 1997, 1998 and 1999:

<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31,
                                                              -------------------------
                                                               1997      1998     1999
                                                              ------    ------    -----
<S>                                                           <C>       <C>       <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
  Research Services.........................................    21.7%     41.9%    60.7%
  Conferences...............................................    40.3      33.2     29.6
  Other.....................................................    38.0      24.9      9.7
                                                              ------    ------    -----
     Total revenues.........................................   100.0     100.0    100.0
Cost of services and fulfillment............................    73.6      65.6     44.4
                                                              ------    ------    -----
  Gross profit..............................................    26.4      34.4     55.6
Other operating expenses:
  Sales and marketing.......................................    18.3      21.5     29.9
  General and administrative................................    33.6      26.4     26.5
  Depreciation and amortization.............................     1.2       1.3      3.4
                                                              ------    ------    -----
     Total other operating expenses.........................    53.1      49.2     59.8
                                                              ------    ------    -----
Interest income.............................................     0.2       0.3      2.0
                                                              ------    ------    -----
Loss before income taxes....................................  (26.5)    (14.5)    (2.2)
Income tax benefit..........................................      --        --      0.5
                                                              ------    ------    -----
Net loss....................................................   (26.5)%   (14.5)%   (1.7)%
                                                              ======    ======    =====
</TABLE>

                                       26
<PAGE>   27

COMPARISON OF THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

     Revenues.  Total revenues increased 158.2% to $38.1 million in 1999 from
$14.7 million in 1998 and 73.4% to $14.7 million in 1998 from $8.5 million in
1997. Jupiter Research Services revenues increased by 274.1% to $23.1 million in
1999 from $6.2 million in 1998. This increase is attributable primarily to an
increase in the number of Research Services contracts to 987 at December 31,
1999 from 421 at December 31, 1998 and an increase in average contract value to
$40,600 at December 31, 1999 from $27,700 at December 31, 1998. Research
Services revenues increased by 234.2% to $6.2 million in 1998 from $1.9 million
in 1997. This increase is attributable primarily to an increase in the number of
Research Services contracts to 421 at December 31, 1998 from 145 at December 31,
1997 and an increase in average contract value to $27,700 at December 31, 1998
from $17,300 at December 31, 1997.

     The increase in Research Services revenues in these periods reflects an
increase in the number of users at, and Research Services offered to and
purchased by, our client companies. Total contract value increased to $40.1
million at December 31, 1999 from $11.7 million at December 31, 1998 and $2.5
million at December 31, 1997. The Research Services deferred revenue related to
the contract value at December 31, 1999, December 31, 1998 and December 31, 1997
was $21.9 million, $5.6 million and $614,000, respectively.

     Conference revenues increased 130.5% to $11.3 million in 1999 from $4.9
million in 1998 and 42.7% to $4.9 million in 1998 from $3.4 million in 1997.
These revenues reflect the results of ten conferences in 1999, nine in 1998 and
eight in 1997. These increases are attributable to increases in average
attendee, sponsor and exhibitor revenues, as well as the production of one
additional conference in each year.

     Other revenues were unchanged at $3.7 million in 1999 and 1998. This
reflects an increase in revenues from custom research and other miscellaneous
revenue sources, offset by a decrease in newsletter revenues, which reflect the
fact that we ceased publication of our Internet Business Report newsletter.
Other revenues increased 13.8% to $3.7 million in 1998 from $3.2 million in
1997. This increase reflects an increase in revenues from custom research and
book-length studies, offset in part by a small decrease in newsletter revenues.

     Cost of Services and Fulfillment.  Cost of services and fulfillment
increased 74.6% to $16.9 million in 1999 from $9.7 million in 1998. The increase
in this period was attributable to the overall growth of our business, in
particular the increased research staffing for new and existing Research
Services. These expenses increased 54.6% to $9.7 million in 1998 from $6.3
million in 1997. The increase in this period was attributable to increased costs
for producing conferences and other direct products, and for increases in
research staffing. Gross margin increased to 55.6% in 1999 from 34.4% in 1998
and increased to 34.4% in 1998 from 26.4% in 1997 because the growth in our
client base and new business exceeded the growth in the cost of providing our
research services and conferences.

     Sales and Marketing.  Sales and marketing expenses increased 258.8% to
$11.4 million in 1999 from $3.2 million in 1998. The increase in this period was
primarily attributable to an increased number of sales personnel and the
corresponding commission costs associated with increased revenues, as well as
increased promotional costs for our Research Services products. Sales and
marketing expenses increased 103.7% to $3.2 million in 1998 from $1.6 million in
1997. The expense increase in this period was primarily attributable to
increased personnel in the marketing area to support an increased direct mail
effort. As a percentage of total revenues, these expenses increased to 29.9% in
1999 from 21.5% in 1998 and increased to 21.5% in 1998 from 18.3% in 1997.

     General and Administrative.  General and administrative expenses increased
159.2% to $10.1 million in 1999 from $3.9 million in 1998. This increase was
primarily attributable to significantly increased personnel in the information
technology, finance, human resource and operations areas, as well as increased
costs associated with basic office operations, including rent and
telecommunications, higher costs for professional fees and increased travel
costs. General and administrative expenses increased 36.5% to $3.9 million in
1998 from $2.9 million in 1997. The expense increase in this periods was
primarily attributable to increased staffing for the finance, human resources
and operations areas. As a percentage of total

                                       27
<PAGE>   28

revenues, these expenses increased to 26.5% in 1999 from 26.4% in 1998 due to
revenues increasing at a slightly slower rate and decreased to 26.4% in 1998
from 33.6% in 1997 due to revenues increasing at a greater rate.

     Depreciation and Amortization.  Depreciation and amortization expense
increased 562.2% to $1.3 million in 1999 from $193,000 in 1998. This increase
was primarily caused by increased investment in capital assets, such as
leasehold improvements and IT infrastructure, as well as by amortization of
goodwill related to acquisitions in Sweden and Australia, the acquisition of 45%
of the Plug-In conference from our conference partners and deferred compensation
costs. Depreciation and amortization expense increased 93.0% to $193,000 in 1998
from $100,000 in 1997 due to higher spending on leasehold improvements and IT
infrastructure.

     Interest Income.  Interest income increased to $743,000 in 1999 from
$54,000 in 1998. This increase was caused by the investment of the net proceeds
from our initial public offering, all of which were invested in short-term,
highly liquid investment-grade securities. Interest income increased 217.6% to
$54,000 in 1998 from $17,000 in 1997 due to higher average cash balances
maintained by the company in various bank accounts.

INCOME TAXES

     No provision or benefit for federal or state income taxes has been recorded
for the net operating losses we incurred in the years ended December 31, 1997
and 1998. In addition, no net operating losses incurred in 1999 prior to the
closing of our initial public offering will be recorded on our federal or state
tax returns because our company was a limited liability company for tax purposes
during these periods and all taxable losses were allocated to the members for
reporting on their income tax returns. For the period subsequent to our initial
public offering, we have recorded a tax benefit of $202,000, after reflecting a
valuation allowance to reduce the deferred tax assets due to our history of
operating losses and the uncertainty regarding whether the deferred tax benefit
will be realized.

                                       28
<PAGE>   29

UNAUDITED QUARTERLY RESULTS OF OPERATIONS DATA

     The following tables set forth unaudited quarterly statement of operations
data for each of the eight quarters in the two year period ended December 31,
1999 and such data expressed as a percentage of total revenues. We believe that
we have prepared these data on the same basis as our audited financial
statements in this prospectus, and have included all necessary adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of our results of operations for these interim periods. You should
read these interim financial data together with our audited financial statements
and the notes to those statements in this prospectus. Our historical results of
operations do not necessarily indicate the results of operations we will achieve
in the future, and our results of operations for interim periods do not
necessarily indicate the results of operations for any future period. Our
results of operations may fluctuate significantly in the future as a result of a
variety of factors, many of which are beyond our control. See "Risk
Factors -- Our operating results may fluctuate in future periods which may cause
volatility or a decline in the price of our stock."
<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED
                                   --------------------------------------------------------------------------
                                   MARCH 31,   JUNE 30,   SEPTEMBER 30,   DECEMBER 31,   MARCH 31,   JUNE 30,
                                     1998        1998         1998            1998         1999        1999
                                                                 (IN THOUSANDS)
<S>                                <C>         <C>        <C>             <C>            <C>         <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
  Research Services..............   $   762    $ 1,233       $1,757          $2,431       $3,447      $4,719
  Conferences....................       888      1,091        2,354             557        1,724       2,829
  Other..........................       955        978        1,012             730          845         827
                                    -------    -------       ------          ------       ------      ------
    Total revenues...............     2,605      3,302        5,123           3,718        6,016       8,375
  Cost of services and
    fulfillment..................     2,091      2,191        3,127           2,267        2,955       3,899
                                    -------    -------       ------          ------       ------      ------
  Gross profit...................       514      1,111        1,996           1,451        3,061       4,476
Other operating expenses:
  Sales and marketing............       611        702          842           1,018        1,750       2,258
  General and administrative.....       863        958        1,084             992        1,511       1,840
  Depreciation and
    administration...............        48         49           48              48          124         193
                                    -------    -------       ------          ------       ------      ------
    Total other operating
      expenses...................     1,522      1,709        1,974           2,058        3,385       4,291
                                    -------    -------       ------          ------       ------      ------
Interest income..................         4          2            2              46            3           6
                                    -------    -------       ------          ------       ------      ------
Income (loss) before income
  taxes..........................    (1,004)      (596)          24            (561)        (321)        191
Income tax benefit...............        --         --           --              --           --          --
                                    -------    -------       ------          ------       ------      ------
  Net income (loss)..............   $(1,004)   $  (596)      $   24          $ (561)      $ (321)     $  191
                                    =======    =======       ======          ======       ======      ======

<CAPTION>
                                        THREE MONTHS ENDED
                                   ----------------------------
                                   SEPTEMBER 30,   DECEMBER 31,
                                       1999            1999
                                          (IN THOUSANDS)
<S>                                <C>             <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
  Research Services..............     $6,385         $ 8,583
  Conferences....................      5,340           1,377
  Other..........................        921           1,088
                                      ------         -------
    Total revenues...............     12,646          11,048
  Cost of services and
    fulfillment..................      5,520           4,524
                                      ------         -------
  Gross profit...................      7,126           6,524
Other operating expenses:
  Sales and marketing............      3,134           4,242
  General and administrative.....      2,963           3,788
  Depreciation and
    administration...............        266             695
                                      ------         -------
    Total other operating
      expenses...................      6,363           8,725
                                      ------         -------
Interest income..................         26             708
                                      ------         -------
Income (loss) before income
  taxes..........................        789          (1,493)
Income tax benefit...............         --             202
                                      ------         -------
  Net income (loss)..............     $  789         $(1,291)
                                      ======         =======
</TABLE>
<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED
                                   --------------------------------------------------------------------------
                                   MARCH 31,   JUNE 30,   SEPTEMBER 30,   DECEMBER 31,   MARCH 31,   JUNE 30,
                                     1998        1998         1998            1998         1999        1999
<S>                                <C>         <C>        <C>             <C>            <C>         <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
  Research Services..............      29.3%      37.3%        34.3%           65.4%        57.3%       56.3%
  Conferences....................      34.1       33.0         45.9            15.0         28.7        33.8
  Other..........................      36.7       29.6         19.8            19.6         14.0         9.9
                                    -------    -------       ------          ------       ------      ------
    Total revenues...............     100.0      100.0        100.0           100.0        100.0       100.0
  Cost of services and
    fulfillment..................      80.3       66.4         61.0            61.0         49.1        46.6
                                    -------    -------       ------          ------       ------      ------
  Gross profit...................      19.7       33.6         39.0            39.0         50.9        53.4
Other operating expenses:
  Sales and marketing............      23.5       21.3         16.4            27.4         29.1        27.0
  General and administrative.....      33.1       29.0         21.2            26.7         25.1        22.0
  Depreciation and
    amortization.................       1.8        1.5          0.9             1.3          2.1         2.3
                                    -------    -------       ------          ------       ------      ------
    Total other operating
      expenses...................      58.4       51.8         38.5            55.4         56.3        51.2
                                    -------    -------       ------          ------       ------      ------
Interest income..................       0.2        0.1           --             1.2           --         0.1
                                    -------    -------       ------          ------       ------      ------
Income (loss) before income
  taxes..........................     (38.4)     (18.0)         0.5           (15.1)        (5.3)        2.3
Income tax benefit...............        --         --           --              --           --          --
  Net income (loss)..............     (38.5)%    (18.0)%        0.5%          (15.1)%       (5.3)%       2.3%
                                    =======    =======       ======          ======       ======      ======

<CAPTION>
                                        THREE MONTHS ENDED
                                   ----------------------------
                                   SEPTEMBER 30,   DECEMBER 31,
                                       1999            1999
<S>                                <C>             <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
  Research Services..............       50.5%          77.7%
  Conferences....................       42.2           12.5
  Other..........................        7.3            9.8
                                      ------          -----
    Total revenues...............      100.0          100.0
  Cost of services and
    fulfillment..................       43.7           40.9
                                      ------          -----
  Gross profit...................       56.3           59.1
Other operating expenses:
  Sales and marketing............       24.8           38.4
  General and administrative.....       23.4           34.3
  Depreciation and
    amortization.................        2.1            6.3
                                      ------          -----
    Total other operating
      expenses...................       50.3           79.0
                                      ------          -----
Interest income..................        0.2            6.4
                                      ------          -----
Income (loss) before income
  taxes..........................        6.2          (13.5)
Income tax benefit...............         --            1.8
  Net income (loss)..............        6.2%         (11.7)%
                                      ======          =====
</TABLE>

                                       29
<PAGE>   30

LIQUIDITY AND CAPITAL RESOURCES

     Since inception, we have financed our operations primarily through private
placements of equity securities and the sale of common stock in our initial
public offering. Net cash provided by operating activities increased to $7.6
million for the year ended December 31, 1999 versus net cash used in operating
activities of $557,000 for the year ended December 31, 1998, due principally to
an increased level of business activity.

     Net cash used in investing activities increased to $13.6 million for the
year ended December 31, 1999 from $838,000 for the year ended December 31, 1998
due to investments made in investment-grade securities. In addition, we
increased capital expenditures for leasehold improvements, other computer
hardware and capitalizable software.

     Net cash provided by financing activities increased to $63.0 million for
the year ended December 31, 1999 versus net cash used in financing activities of
$3,000 for the year ended December 31, 1998. The increase was due to the
successful completion of our initial public offering, which resulted in net
proceeds to us of $62.4 million, as well as to proceeds received from the
exercise of unit options.

     As of December 31, 1999, we had $57.2 million in cash and cash equivalents,
and $8.9 million invested in highly liquid investment-grade securities. We have
a $3.0 million committed line of credit, secured by substantially all of our
assets, under which there were no outstanding balances as of December 31, 1999.
As of December 31, 1999 none of the $62.4 million in net proceeds from our
initial public offering had been utilized.

     We expect to spend approximately $13 million in 2000 on technology,
including computer system enhancements, leasehold improvements, expansion of
operations and telecommunications upgrades. We anticipate that we will continue
to increase our capital expenditures and lease commitments consistent with our
anticipated growth in operations, infrastructure and personnel. In addition, we
anticipate that we will continue to evaluate investments in other businesses,
and continue to expand our sales and marketing programs and conduct more
aggressive brand promotions, any of which could reduce our liquidity. We also
anticipate that we will continue to experience growth in our operating expenses
to support our revenue growth, including the introduction of new Research
Services.

     We believe that the net proceeds of this offering, together with our
available funds, will be sufficient to meet our anticipated cash needs for
working capital and capital expenditures for at least the next 12 months.

     Our financial exposure due to the effects of fluctuations in foreign
currency rates is not material.

RECENT ACCOUNTING PRONOUNCEMENTS

     We continually assess the effects of recently issued accounting standards.
The impact of all recently adopted and issued accounting standards has been
disclosed in our audited financial statements and the notes to those statements
on this report.

EFFECTS OF INFLATION

     Due to relatively low levels of inflation in 1998 and 1999, inflation has
not had a significant impact on our results of operations.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Currency Rate Fluctuation.  Our results of operations, financial position
and cash flows are not materially affected by changes in the relative values of
non-U.S. currencies to the U.S. dollar. We do not use derivative financial
instruments to limit our foreign currency risk exposure.

                                       30
<PAGE>   31

     Market Risk.  Our accounts receivables are subject, in the normal course of
business, to collection risks. We regularly assess these risks and have
established policies and business practices to protect against the adverse
effects of collection risks. As a result, we do not anticipate any material
losses in this area.

     Interest Rate and Credit Risks.  Our exposure to market rate risk for
changes in the interest rates relates primarily to our investment portfolio. We
have not used derivative financial instruments in our investment portfolio. We
invest our excess cash in debt instruments of the U.S. Government and its
agencies and in high-quality corporate issuers and, by policy, limits the amount
of credit exposure to any one issuer. We protect and preserve our invested fund
by limiting default, market and reinvestment risk.

     Investments in both fixed rate and floating rate interest earning
instruments carry a degree of interest rate risk. Fixed rate securities may have
their fair market value adversely impacted due to a rise in their interest
rates, while floating rate securities may produce less income than expected if
interest rates fall. Due in part to these factors, our future investment income
may fall short of expectations due to changes in interest rates or we may suffer
losses in principal if forced to sell securities which have declined in market
value due to changes in interest rates.

                                       31
<PAGE>   32

ITEM 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          JUPITER COMMUNICATIONS, INC.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                              PAGE
<S>                                                           <C>
Independent Auditors' Report................................   33
Consolidated Balance Sheets as of December 31, 1998 and
  1999......................................................   34
Consolidated Statement of Operations for the years ended
  December 31, 1997, 1998 and 1999..........................   35
Consolidated Statements of Stockholders Equity/Members
  Deficiency for the years ended December 31, 1997, 1998 and
  1999......................................................   36
Consolidated Statements of Cash Flows for the years ended
  December 31, 1997, 1998 and 1999..........................   37
Notes to Consolidated Financial Statements..................   38
</TABLE>

                                       32
<PAGE>   33

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Jupiter Communications, Inc.

     We have audited the accompanying consolidated balance sheets of Jupiter
Communications Inc. and subsidiaries as of December 31, 1999 and 1998, and the
related consolidated statements of operations, stockholders' equity/members'
deficiency and cash flows for each of the years in the three-year period ended
December 31, 1999. In connection with our audits of the consolidated financial
statements, we also have audited the financial statement schedule as listed in
the accompanying index. These consolidated financial statements and financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. 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 financial position of Jupiter
Communications Inc. and subsidiaries, as of December 31, 1999 and 1998, and the
results of their operations and cash flows for each of the years in the
three-year period ended December 31, 1999 in conformity with generally accepted
accounting principles. 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/ KPMG LLP

New York, New York
February 7, 2000

                                       33
<PAGE>   34

                          JUPITER COMMUNICATIONS, INC.
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              DECEMBER 31,        DECEMBER 31,
                                                                  1998                1999
                                                              ------------        ------------
<S>                                                           <C>                 <C>
ASSETS

Current assets:
     Cash and cash equivalents..............................   $  216,144          $57,222,154
     Short-term investments.................................           --           8,852,937
     Accounts receivable, less allowance for doubtful
       accounts of $37,915 and $113,392 in 1998 and 1999,
       respectively.........................................    4,579,856          17,849,722
     Prepaid expenses and other current assets..............      797,168           3,156,851
                                                               ----------          ----------
               Total current assets.........................    5,593,168          87,081,664
Property and equipment, net.................................    1,071,432           5,131,095
Goodwill and other intangible assets, net...................       54,791           4,526,071
Other assets................................................      147,630             440,744
                                                               ----------          ----------
               Total assets.................................   $6,867,021          $97,179,574
                                                               ==========          ==========

LIABILITIES AND STOCKHOLDERS' EQUITY/MEMBERS DEFICIENCY

Current liabilities:
     Accounts payable.......................................   $1,241,618          $2,764,013
     Accrued expenses.......................................      208,843           1,178,619
     Accrued compensation...................................      841,624           2,515,680
     Deferred revenue.......................................    6,677,233          25,594,018
                                                               ----------          ----------
               Total current liabilities....................    8,969,318          32,052,330
Deferred rent...............................................       26,477             129,716
Convertible notes payable...................................           --           3,500,000

Common stock, $0.001 par value: 100,000,000 shares
  authorized, 14,499,573 shares issued and outstanding at
  December 31, 1999.........................................           --              14,500
Additional paid-in capital..................................    3,506,265          63,212,533
Deferred compensation.......................................           --            (504,819)
Accumulated deficit.........................................   (5,635,039)         (1,290,623)
Accumulated other comprehensive income......................           --              65,937
                                                               ----------          ----------
               Total stockholders' equity/members'
                 deficiency.................................   (2,128,774)         61,497,528
Commitments and contingencies...............................           --                  --
                                                               ----------          ----------
               Total liabilities and stockholders'
                 equity/members' deficiency.................   $6,867,021          $97,179,574
                                                               ==========          ==========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       34
<PAGE>   35

                          JUPITER COMMUNICATIONS, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                           YEAR ENDED DECEMBER 31,
                                                  ------------------------------------------
                                                     1997            1998            1999
                                                     ----            ----            ----
<S>                                               <C>             <C>             <C>
Revenues:
     Research Services..........................  $1,850,154      $6,183,188      $23,133,867
     Conferences................................   3,426,079       4,889,703      11,269,950
     Other......................................   3,228,919       3,674,934       3,680,468
                                                  ----------      ----------      ----------
               Total revenues...................   8,505,152      14,747,825      38,084,285
Cost of services and fulfillment................   6,259,433       9,675,838      16,897,660
                                                  ----------      ----------      ----------
               Gross profit.....................   2,245,719       5,071,987      21,186,625
Other operating expenses:
     Sales and marketing........................   1,557,676       3,173,368      11,383,673
     General and administrative expenses........   2,855,589       3,897,096      10,100,267
     Depreciation and amortization..............      99,751         193,410       1,278,241
                                                  ----------      ----------      ----------
               Total other operating expenses...   4,513,016       7,263,874      22,762,181
Interest income.................................      17,000          54,506         743,484
Loss before income taxes........................  (2,250,297)     (2,137,381)       (832,072)
Income tax benefit..............................          --              --         202,000
                                                  ----------      ----------      ----------
               Net loss.........................  $(2,250,297)    $(2,137,381)    $ (630,072)
                                                  ==========      ==========      ==========
Pro forma basic and diluted net loss per common
  share.........................................                  $    (0.21)     $    (0.05)
                                                                  ==========      ==========
Pro forma weighted average common shares
  outstanding...................................                  10,318,359      11,564,816
                                                                  ==========      ==========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       35
<PAGE>   36

                          JUPITER COMMUNICATIONS, INC.

       CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY/MEMBERS' DEFICIENCY
           FOR THE YEARS ENDED DECEMBER 31, 1996, 1997, 1998 AND 1999

<TABLE>
<CAPTION>
                                      COMMON STOCK                                                ACCUMULATED          TOTAL
                                   ------------------  ADDITIONAL                                    OTHER         STOCKHOLDERS'
                                     NUMBER     PAR     PAID-IN       DEFERRED     ACCUMULATED   COMPREHENSIVE    EQUITY/MEMBERS
                                   OF SHARES   VALUE    CAPITAL     COMPENSATION     DEFICIT         INCOME         DEFICIENCY
                                   ---------   -----   ----------   ------------   -----------   -------------    --------------
<S>                                <C>         <C>     <C>          <C>            <C>           <C>              <C>
Balance at December 31, 1996.....          --      --     533,051             --   (1,247,361)               --       (714,310)
Contributions made by members....                       2,996,175                                                    2,996,175
Distributions paid to members....                         (22,961)                                                     (22,961)
Net loss.........................                                                  (2,250,297)                      (2,250,297)
                                   ----------  ------  ----------   ------------   ----------    --------------     ----------
Balance at December 31, 1997.....          --      --   3,506,265             --   (3,497,658)               --          8,607
Net loss.........................                                                  (2,137,381)                      (2,137,381)
                                   ----------  ------  ----------   ------------   ----------    --------------     ----------
Balance at December 31, 1998.....          --      --   3,506,265             --   (5,635,039)               --     (2,128,774)
Exercise of member unit
  options........................                         500,000                                                      500,000
Issuance of units on acquisition
  of Intelligence AB.............                         808,300                                                      808,300
Exercise of employee unit
  options........................                          39,500                                                       39,500
Issuance of units on acquisition
  of New Media Holdings PTY
  Ltd............................                         320,000                                                      320,000
Issuance of unit options to
  employees......................                         576,937       (576,937)                                           --
Issuance of common stock on
  conversion from LLC to a "C"
  corporation....................  11,222,327  11,222  (4,985,710)                  4,974,488                               --
Initial public offering proceeds,
  net............................   3,258,750   3,259  62,433,167                                                   62,436,426
Amortization of deferred
  compensation...................                                         72,118                                        72,118
Exercise of stock option plans...      18,496      19      14,074                                                       14,093
Comprehensive loss:
  Net loss.......................                                                    (630,072)                        (630,072)
  Cumulative translation
    adjustment...................                                                                        65,937         65,937
                                                                                                                    ----------
      Total comprehensive loss...                                                                                     (564,134)
                                   ----------  ------  ----------   ------------   ----------    --------------     ----------
Balance at December 31, 1999.....  14,499,573  14,500  63,212,533       (504,819)  (1,290,623)           65,937     61,497,528
                                   ==========  ======  ==========   ============   ==========    ==============     ==========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       36
<PAGE>   37

                          JUPITER COMMUNICATIONS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                              ---------------------------------------
                                                                 1997          1998          1999
                                                                 ----          ----          ----
<S>                                                           <C>           <C>           <C>
Cash flows from operating activities:
    Net loss................................................  $(2,250,297)  $(2,137,381)  $  (630,072)
    Adjustments to reconcile net loss to net cash provided
      by (used in) operating activities:
        Equity loss from investment in Methodfive LLC.......      35,000        22,230         26,510
        Depreciation and amortization.......................      99,751       193,410      1,278,241
        Accretion of discount on convertible note payable...          --            --         57,377
        Provision for allowance for doubtful accounts.......      25,483       (13,568)        98,672
        Deferred tax asset..................................          --            --       (202,000)
        Changes in operating assets and liabilities, net of
          effect of acquisitions:
            Increase in accounts receivable.................    (328,142)   (3,430,058)   (13,379,720)
            (Increase) decrease in prepaid expenses and
              other current assets..........................      13,073      (656,106)    (2,329,067)
            (Increase) decrease in security deposits........       3,815       (79,589)      (117,624)
            Increase in accounts payable....................     397,337        38,040      1,375,400
            Increase in accrued expenses....................     298,300       606,858      2,594,592
            Increase in deferred revenue....................     657,280     4,902,230     18,736,891
            Increase (decrease) in deferred rent............     (13,138)       (3,016)       103,239
                                                              ----------    ----------    -----------
                Net cash provided by (used in) operating
                  activities................................  (1,061,538)     (556,950)     7,612,439
                                                              ----------    ----------    -----------
Cash flows from investing activities:
    Capital expenditures....................................    (206,842)     (838,037)    (4,893,654)
    Investment in Internet Content Report...................     (25,000)           --             --
    Investments in marketable securities....................          --            --     (8,852,937)
    Cash paid in connection with acquisition, net of cash
      acquired..............................................          --            --        103,425
                                                              ----------    ----------    -----------
                Net cash used in investing activities.......    (231,842)     (838,037)   (13,643,166)
                                                              ----------    ----------    -----------
Cash flows from financing activities:
    Proceeds from initial public offering, net..............          --            --     62,436,426
    Member contributions, net...............................   2,996,175            --             --
    Exercise of unit options................................          --            --        553,592
    Distributions paid to members...........................     (22,961)           --             --
    Repayment of notes payable..............................     (70,000)           --             --
    Principal payments under capital lease obligation.......      (3,447)       (2,919)            --
                                                              ----------    ----------    -----------
                Net cash provided by (used in) financing
                  activities................................   2,899,767        (2,919)    62,990,018
                                                              ----------    ----------    -----------
                Increase (decrease) in cash and cash
                  equivalents...............................   1,606,387    (1,397,906)    56,959,291
                                                              ----------    ----------    -----------
Effect of exchange rate changes on cash and cash
  equivalents...............................................          --            --         46,719
Cash and cash equivalents at beginning of year..............       7,663     1,614,050        216,144
                                                              ----------    ----------    -----------
Cash and cash equivalents at end of year....................  $1,614,050    $  216,144    $57,222,154
                                                              ==========    ==========    ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid during the year for interest..................       8,694        11,855             --
                                                              ==========    ==========    ===========

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Acquisition of intangible asset by issuance of convertible
  notes payable.............................................          --            --      3,442,623
Acquisition of goodwill acquired by issuance of stock.......          --            --      1,128,300
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       37
<PAGE>   38

                          JUPITER COMMUNICATIONS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) ORGANIZATION

     Jupiter Communications, LLC (the "LLC") was organized on December 1, 1994
as a New York limited liability company. On October 8, 1999, in connection with
the completion of our initial public offering, the LLC was merged with and into
Jupiter Communications, Inc., a Delaware corporation ("Jupiter" or the
"Company"). Jupiter is a new media research firm that provides comprehensive
views of industry trends, forecasts and business decisions about the internet
economy. The Company's research services encompass Jupiter Research Services,
conferences, newsletters, book-length studies, and custom research reports and
provide clients and customers with focused research and strategic planning
support as they develop interactive products and services.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  (a) PRINCIPLES OF CONSOLIDATION

     The Company's consolidated financial statements as of and for the year
ended December 31, 1999 include the accounts of the Company, the accounts of
Intelligence SE AB("Intelligence"), a Swedish research company, from July 31,
1999 (date of acquisition) and the accounts of New Media Holdings PTY, Ltd.("New
Media Holdings"), an Australian research company, from October 7, 1999 (date of
acquisition). The consolidated financial statements for the prior year periods
include only the accounts of Jupiter. All significant inter-company balances and
transactions have been eliminated in consolidation.

  (b) USE OF ESTIMATES

     The accompanying financial statements are prepared in accordance with U.S.
generally accepted accounting principles (GAAP). In preparing financial
statements in conformity with GAAP, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements and revenue and expenses during the reporting period. Actual results
could differ from those estimates.

  (c) CURRENCY TRANSLATION AND TRANSACTIONS

     The reporting currency for the Company is the United States Dollar (USD).
The functional currency for the Company's operations is generally the applicable
local currency. Accordingly, the assets and liabilities of the subsidiaries
whose functional currency is other than the USD are included in the consolidated
financial statements by translating the assets and liabilities into the
reporting currency at the exchange rates applicable at the end of the reporting
year. The statements of operations and cash flows of such non-USD functional
currency operations are translated at the average exchange rate for the
reporting year. Translation gains or losses are accumulated as a separate
component of stockholders' equity/ members' deficiency. Currency transaction
gains or losses arising from transactions of the Company in currencies other
than the functional currency are included in operations for each reporting
period.

  (d) CASH EQUIVALENTS

     The Company considers all highly liquid investments with an original
maturity of three months or less at the time of acquisition to be cash
equivalents. Cash equivalents at December 31, 1999 consist primarily of
investments in highly rated debt securities. There were no cash equivalents at
December 31, 1998.

  (e) SHORT-TERM INVESTMENTS

     Management determines the appropriate classification of marketable debt
securities at the time of purchase and re-evaluates such designation as of each
balance sheet date. At December 31, 1999, the Company's investment portfolio
consisted of marketable debt securities classified as held-to-maturity, as

                                       38
<PAGE>   39
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

management has both the intent and ability to hold these securities to maturity,
and is carried at amortized cost, which approximates fair value. Income relating
to these securities is reported as interest income.

  (f) IMPAIRMENT OF LONG-LIVED ASSETS

     Long-lived assets and certain identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceeds the fair value of
the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair market value, less costs to sell.

  (g) PROPERTY AND EQUIPMENT

     Property and equipment are stated at cost. Depreciation is provided by the
straight-line method over the estimated useful lives of the respective assets,
which range from three to five years. Leasehold improvements are amortized on a
straight-line basis over the shorter of the lease term or their estimated useful
life. Additions and major improvements are capitalized, whereas the cost of
maintenance and repairs is charged to operations as incurred.

  (h) GOODWILL AND OTHER INTANGIBLE ASSETS

     Goodwill, resulting from business acquisitions and other intangible assets
are being amortized on a straight-line basis over their expected period of
benefit ranging from three to five years. Goodwill and other intangible assets
are stated net of total accumulated amortization of $95,209 and $451,742 at
December 31, 1998 and December 31, 1999, respectively.

  (i) FAIR VALUE OF FINANCIAL INSTRUMENTS

     The carrying amount of cash and cash equivalents, accounts receivable,
accounts payable, accrued expenses and deferred revenues approximated fair value
because of the relatively short maturity of these instruments. At December 31,
1999, it was not practicable to estimate the fair value of the convertible notes
payable for the acquisition of rights to profits from the Plug-in conference,
because there were no quoted market prices.

  (j) STOCK-BASED COMPENSATION

     The company accounts for stock based compensation under the intrinsic-value
based method of accounting prescribed by Accounting Principles Board ("APB")
Opinion No.25, "Accounting for Stock Issues to Employees," and discloses the
effect of the difference in applying the fair value based method of accounting
on a pro-forma basis, as required by SFAS No.123 "Accounting for Stock-Based
Compensation."

  (k) PRO FORMA BASIC AND DILUTED NET LOSS PER COMMON SHARE

     Pro forma basic and dilutive net loss per common share is computed by
dividing net loss by the pro forma weighted average number of common shares
outstanding for the period. Pro forma weighted average number of common shares
gives effect to the Company's reorganization from a limited liability company to
a corporation as though the organization had occurred as of January 1, 1998. Pro
forma weighted

                                       39
<PAGE>   40
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

average number of common shares does not include any common stock equivalents
because inclusion of common stock equivalents would have been anti-dilutive.

  (l) REVENUE AND DEFERRED REVENUE COMMISSION EXPENSE RECOGNITION

     Jupiter Research Services revenues are deferred and then reflected
proportionally in operations over the term of the service period, which is
generally up to one year. Conference revenues are reflected in operations when
the conference occurs. Newsletter subscriptions are deferred and then reflected
proportionally in operations over the term of the subscription, which is
generally up to one year. Book-length studies and custom research are reflected
in operations when the product is shipped.

     Deferred revenue is composed of prepaid Jupiter Research Services fees to
be earned in the future over the term of the service period, prepaid conference
sponsorship/exhibition fees to be earned from conferences held after the balance
sheet date, and prepaid newsletter subscriptions to be earned in the future over
the term of the subscriptions.

  (m) COST OF REVENUES AND COMMISSION EXPENSE RECOGNITION

     Cost of revenues is primarily comprised of cost of research analysts,
direct costs incurred for conferences, payroll and travel related to Jupiter
Research Services product. The Company records prepaid commissions related to
Jupiter Research Services upon the signing of the contract and amortizes this
corresponding prepaid commission expense over the contract period in which the
related revenues are earned and amortized to income.

  (n) INCOME TAXES

     Prior to October 8, 1999, Jupiter Communications LLC (the "LLC") was
treated as a partnership for income tax purposes, and accordingly, income or
loss attributed to the LLC's operations was allocated to its members to be
reported on their separate income tax returns. Tax net operating losses incurred
during this period are not available to offset the Company's future taxable
income, if any.

     On October 8, 1999, the LLC was merged with and into the Company, a
Delaware corporation, and the surviving entity. Effective on this date, income
taxes are accounted for under Statement of Financial Accounting Standards No.
109, Accounting for Income Taxes. The Company recognizes both the current and
deferred tax consequences of all transactions that have been recognized in the
financial statements. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in
results of operations in the period that the tax change occurs. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the
amount expected to be realized.

  (o) CREDIT RISK

     Financial instruments that potentially subject the Company to a
concentration of credit risk consist of cash and cash equivalents and accounts
receivable. Cash is deposited with high credit quality financial institutions
and cash equivalents consist of highly rated debt securities. The Company's
customers are concentrated in the United States. The Company performs ongoing
credit evaluations of its customers' financial condition and generally does not
require collateral and establishes an allowance for doubtful accounts based upon
factors surrounding the credit risk of customers, historical trends and other
information. To date, such losses have been within management's expectations.

                                       40
<PAGE>   41
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     For each of the years in the three-year period ended December 31, 1999, no
customer accounted for more than 10% of revenues generated by the Company, or of
accounts receivable at December 31, 1999 and 1998.

  (p) NET LOSS PER SHARE

     The Company computes net loss per share in accordance with SFAS No. 128,
"Earnings Per Share". Basic net income per share is computed by dividing the net
income available to common stockholders for the period by the weighted average
number of common shares outstanding during the period. Diluted net income per
share is computed by dividing the net income for the period by the weighted
average number of common and common equivalent shares outstanding during the
period. Common equivalent shares, composed of incremental common shares issuable
upon the exercise of stock options and warrants, are included in net income per
share to the extent such shares are dilutive. Common stock equivalents were not
included in loss per share for any periods presented since they are
anti-dilutive.

  (q) RECENT ACCOUNTING PRONOUNCEMENTS

     In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1") which provides
guidance for determining whether computer software is internal-use software and
on accounting for the proceeds of computer software originally developed or
obtained for internal use and then subsequently sold to the public. It also
provides guidance on capitalization of the costs incurred for computer software
developed or obtained for internal use. SOP 98-1 will be effective for the
Company's fiscal year ending December 31, 1999. The adoption of SOP 98-1 did not
have a material impact on the Company's consolidated financial statements.

     In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income" which establishes standards for the reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. Comprehensive income generally represents all changes in
shareholders' equity during the period except those resulting from investments
by or distributions to, shareholders. SFAS No. 130 is effective for fiscal years
beginning after December 15, 1997 and requires restatement of earlier periods
presented. The adoption of this standard has modified the Company's
stockholders' equity and had no impact on the Company's results of operations,
financial position or cash flows.

     In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of
an Enterprise and Related Information" which establishes standards for the way
that a public enterprise reports information about operating segments in annual
financial statements, and requires that those enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
products and services, geographic areas and major customers. SFAS No. 131 is
effective for fiscal years beginning after December 15, 1997, and requires
restatement of earlier periods presented. In the initial year of application,
comparative information for earlier years must be restated. The Company has no
reportable operating segments and adoption of this standard had no impact on the
Company's financial statements.

     In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which establishes accounting and reporting
standards for derivative instruments, including derivative instruments embedded
in other contracts, and for hedging activities. SFAS No. 133 is effective for
all fiscal quarters of fiscal years beginning after June 15, 2000. This
statement is not expected to affect the Company as it currently does not engage
or plan to engage in derivative instruments or hedging activities.

                                       41
<PAGE>   42
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  (r) RECLASSIFICATION

     Certain reclassifications have been made in prior years' financial
statements to conform to classifications used in the current year.

(3) ACQUISITIONS

  Intelligence SE AB

     On July 31, 1999, Jupiter acquired all of the stock of Intelligence, in
exchange for 137,000 Class B (non-voting) units at an aggregate value of
$808,300. The total purchase price for this transaction was $868,795, which
includes expenses incurred by the Company of $60,495 related to the merger.

     Net liabilities acquired in the transaction were $133,151. The historical
carrying amounts of such net liabilities approximated their fair value. The
difference between the purchase price and the fair value of the acquired net
liabilities of Intelligence was recorded as goodwill in the amount of $1,001,946
and is being amortized on a straight line basis over its estimated useful life
of 4 years, the expected period of benefit.

  New Media Holdings PTY, Ltd.

     On October 7, 1999, Jupiter acquired all of the stock of New Media
Holdings, in exchange for 20,000 Class B (non-voting) units at an aggregate
value of $320,000. The total purchase price for this transaction was $383,244,
which includes expenses incurred by the Company of $13,244 related to the merger
and a $50,000 note receivable that was outstanding at time of acquisition.

     As there were no assets or liabilities at the time of the acquisition, the
purchase price of $383,244 was recorded as goodwill, which is being amortized on
a straight-line basis over its estimated useful life of 4 years, the expected
period of benefit.

     The following unaudited pro forma consolidated financial information gives
effect to the acquisition of Intelligence and New Media Holdings, as if they had
occurred as of January 1, 1998, after giving effect to adjustment for
amortization of goodwill. The pro forma financial information does not
necessarily reflect the consolidated results of operations that would have
occurred had the Company, Intelligence and New Media Holdings constituted a
single entity during such periods:

<TABLE>
<CAPTION>
                                                       1998           1999
                                                       ----           ----
<S>                                                 <C>            <C>
Revenues..........................................  $14,910,825    $38,672,915
Net loss..........................................   (2,700,679)    (1,371,192)
Net loss per share................................        (0.26)         (0.12)
</TABLE>

(4) PREPAID EXPENSES AND OTHER CURRENT ASSETS

     Prepaid expenses and other current assets consist of the following:

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                                       ----------------------
                                                         1998         1999
                                                         ----         ----
<S>                                                    <C>         <C>
Deferred Jupiter Research Services commissions.......  $632,406    $2,341,242
Prepaid conference expenses..........................   101,974       315,683
Other................................................    62,788       499,926
                                                       --------    ----------
                                                       $797,168    $3,156,851
                                                       ========    ==========
</TABLE>

                                       42
<PAGE>   43
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(5) PROPERTY AND EQUIPMENT

     Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                                     ---------------------------
                                                        1998            1999
                                                        ----            ----
<S>                                                  <C>             <C>
Computer equipment.................................  $  758,428      $ 3,341,164
Furniture and fixtures.............................     178,892          728,936
Office equipment...................................      96,623          295,897
Leasehold improvements.............................     385,603        1,962,803
                                                     ----------      -----------
                                                      1,419,546        6,328,800
Less accumulated depreciation and amortization.....    (348,114)      (1,197,705)
                                                     ----------      -----------
                                                     $1,071,432      $ 5,131,095
                                                     ==========      ===========
</TABLE>

Depreciation and amortization expense for 1997, 1998 and 1999 was $ 73,084, $
163,410 and $849,591, respectively.

(6) GOODWILL AND OTHER INTANGIBLE ASSETS

     In June 1995, the Company acquired substantially all of the assets of the
Internet Business Report ("IBR") in exchange for a $140,000 promissory note,
payment of which was completed during 1997. The purchase price of $140,000 was
allocated as follows: $62,500 to the IBR subscriber list $62,500 to the IBR
trademark; and $15,000 for the editorial costs which were subsequently written
off. In 1999 the Company ceased publication of the Internet Business Report, and
any remaining amounts allocated to the subscriber list and trademark were
expensed.

     In September 1997, the Company purchased the rights and interests in the
trademark "Internet Content Report" for $25,000. This included a subscriber list
with information regarding current and former subscribers. The purchase price
was allocated equally between the subscriber list and the trademark.

     In November 1999, the Company purchased substantially all of the rights to
a portion of the net profits from "Plug-In," one of the annual conferences
sponsored by the Company, as well as the trademark. The aggregate purchase price
was $3.85 million, which was paid through the issuance of two $1.925 million
zero-coupon convertible promissory notes with a maturity date of January 7,
2001. The trademark has been recorded at the present value of the convertible
notes payable at $3,442,623.

                                       43
<PAGE>   44
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Goodwill and other intangible assets consist of the following:

<TABLE>
<CAPTION>
                                                    DECEMBER 31,
                                            ----------------------------     ESTIMATED
                                                 1998            1999      LIFE OF ASSET
                                                 ----            ----      -------------
<S>                                         <C>                <C>         <C>
Goodwill:
     Sweden...............................  $             0    $1,001,946        4
     Australia............................                0      383,244         4
                                            ---------------    ---------
                                                          0    1,385,190
Internet Content Report:
     Subscriber list......................  $        12,500    $  12,500         5
     Trademark............................           12,500       12,500         5
                                            ---------------    ---------
                                                     25,000       25,000
Internet Business Report:
     Subscriber list......................           62,500       62,500         5
     Trademark............................           62,500       62,500         5
                                            ---------------    ---------
                                                    125,000      125,000
Plug-In Trademark.........................               --    3,442,623         3
                                            ---------------    ---------
Gross goodwill and intangible assets......          150,000    4,977,813
Less accumulated amortization.............          (95,209)    (451,742)
                                            ---------------    ---------
                                            $        54,791    $4,526,071
                                            ===============    =========
</TABLE>

     Amortization expense for 1997, 1998 and 1999 was $ 26,667, $ 30,000 and
$356,533, respectively.

(7) OTHER ASSETS

     Other assets consist of the following:

<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                               ------------------------------------
                                                    1998                 1999
                                                    ----                 ----
<S>                                            <C>                  <C>
Investment in Methodfive, LLC................  $        26,510      $             0
Security Deposits............................          121,120              238,744
Deferred Taxes Assets, non-current...........                0              202,000
                                               ---------------      ---------------
                                               $       147,630      $       440,744
                                               ===============      ===============
</TABLE>

     Jupiter has an investment in Methodfive LLC ("Methodfive"), formerly the
Myriad Agency, LLC, a Web site design and consulting company. For the years
ended December 31, 1998 and 1999, Methodfive experienced a net loss from
operations and the Company recorded its share of the loss in the accompanying
consolidated statements of operations. Jupiter's cumulative interest in
Methodfive as of December 31, 1998 and 1999 was approximately 17.4% and 8.0%,
respectively, and has been accounted for under the equity method.

     As of December 31, 1999 the Company has fully written down its investment
as a result of the current financial position and recurring losses of
Methodfive. The Company has no future funding responsibilities with respect to
Methodfive and has an 8.0% passive interest.

(8) CONVERTIBLE NOTES PAYABLE

     Notes payable reflects the two promissory notes issued on November 2, 1999,
as consideration for purchase of additional rights to the net profits of the
Plug-in conference. The aggregate purchase price of $3.85 million was paid to
the Sellers through the issuance of two $1.925 million zero-coupon convertible

                                       44
<PAGE>   45
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

promissory notes. Each convertible promissory note provides for a maturity date
of January 7, 2001 and allows the holder of each convertible promissory note to
convert, at any time prior to the maturity date, all of the outstanding
indebtedness into 55,000 shares of the Company's common stock or to redeem the
notes for cash at a discount of 10% per annum, during the period commencing
April 14, 2000 and ending on April 24, 2000. In addition, each convertible
promissory note allows the Company after twelve months from the date of the
notes, and under certain circumstances, to convert all of the outstanding
indebtedness into shares of the Company's common stock and for the holder, under
certain circumstances, to redeem in cash all or a portion of the outstanding
indebtedness. These notes have been reflected as convertible notes payable on
the consolidated balance sheet. In February 2000, the Company repaid one of the
notes at its accreted value of $1,760,524 on that date.

(9) DEFERRED REVENUE

     Deferred revenue consists of the following:

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                                            ------------
                                                         1998         1999
                                                      ----------   -----------
<S>                                                   <C>          <C>
Jupiter Research Services...........................  $5,638,847   $21,908,305
Conferences.........................................     783,912     3,111,032
Newsletter and other miscellaneous..................     254,474       574,681
                                                      ----------   -----------
                                                      $6,677,233   $25,594,018
                                                      ==========   ===========
</TABLE>

(10) OTHER REVENUES

     Other revenues consist of the following:

<TABLE>
<CAPTION>
                                                    DECEMBER 31,
                                         -----------------------------------
                                           1997         1998         1999
                                           ----         ----         ----
<S>                                      <C>          <C>          <C>
Book length studies....................  $1,518,545   $1,681,114   $1,807,971
Newsletter subscriptions...............  1,492,000    1,470,380      502,385
Custom research........................         --           --      990,000
Other..................................    218,374      523,440      380,112
                                         ---------    ---------    ---------
                                         $3,228,919   $3,674,934   $3,680,468
                                         =========    =========    =========
</TABLE>

(11) STOCKHOLDERS' EQUITY/MEMBERS DEFICIENCY

     During October 1997, Gartner Group, Inc. ("acquirer") purchased 3,515,624
Class C units of the Company for $8 million from both the Company and existing
members. The Company amended its operating agreement to allow current members to
sell all or part of their units to the acquirer. During 1997, existing members
sold 2,197,265 units for $5.0 million, and 1,318,359 units were purchased from
the Company for $3.0 million and recorded as capital contributions by the
Company, less $254,098 in offering costs. Class A and Class B units sold by
existing members to the acquiror automatically converted to Class C units upon
transfer on a one-for-one basis to the acquiror. Three members sold 100% of
their units to the acquiror. In addition, during 1997 capital contributions of
$250,273 were made by existing Class A and Class B equity members. During 1998,
an existing member sold 333,333 units for $1.25 million to the acquiror. After
completion of the transactions, the acquirer owned 37.3% of all outstanding
units as of December 31, 1998, and has two seats on the Board of Directors.

                                       45
<PAGE>   46
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     On July 31, 1999, the LLC acquired all of the stock of Intelligence, in
exchange for 137,000 Class B units.

     On October 6, 1999, the LLC acquired all of the stock of New Media Holdings
in exchange for 20,000 Class B units.

     On October 8, 1999, 100% of the members' units in the LLC were exchanged at
the ratio of 1:1 for the common shares in Jupiter Communications, Inc. Total
number of units exchanged for equal number of common shares was 11,222,327.

     On October 14, 1999, Jupiter completed its IPO, which resulted in the sale
by the Company of 3,258,750 shares of common stock at $21.00 per share on the
Nasdaq National Market. The Company's net proceeds from the IPO, after deducting
underwriting discounts and offering expenses, were $62,433,167.

(12) OPTIONS

  1997 OPTION PLAN

     During 1997, the Company established the 1997 Employee Unit Option Plan
(the "Plan"). Under the Plan, 1,590,000 Class B units shall be available for
grant. In 1999, the equity members authorized an increase in the number of units
reserved for issuance under the Plan from 1,590,000 to 2,750,000. Unit options
may be granted to key employees of the Company upon selection by the managing
members. The exercise price of a unit option shall be equal to the established
fair market value of the unit at the time of grant, in accordance with the
provisions of the Plan. These options vest ratably over a four-year period.

     All unit options have a fixed term determinable by the managing members,
but no option shall be exercisable more than seven years after the date of
grant. Option exercisability is subject to the terms and conditions as
determined by the managing members. All unit options were granted with an
exercise price equal to the fair market value on the date of grant.

     In July 1999, the Company issued 113,125 unit options to certain employees
at $5.90 per unit. The fair value of the Company's unit during July 1999 was
$11.00 per unit. Accordingly, the Company recorded deferred compensation of
approximately $576,937, representing the difference between the deemed fair
value of the Company's unit at the date of each grant and the exercise price of
the related options. The amount is presented as a reduction of stockholders'
equity/members' deficiency and amortized over the 4 year vesting period of the
applicable units. The Company has amortized $72,118 of total deferred
compensation in 1999.

     On conversion of the Company from the LLC to an incorporated company, all
units were assumed by the incorporated company on a 1:1 ratio. No further
options will be granted under this plan.

  1999 OPTION PLAN

     During 1999, the Company established the 1999 Stock Incentive Plan (the
"1999 Plan"). Under the 1999 Plan, 5,000,000 shares will be available for grant
or issuance. The exercise price per share shall be equal to the established fair
market value per share at the time of the grant, in accordance with the
provisions of the 1999 Plan. Options granted under the 1999 Plan vest ratably
over a four-year period. No option shall be exercisable more than ten years
after the date of grant.

                                       46
<PAGE>   47
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The activity under the combined Plans is as follows:

<TABLE>
<CAPTION>
                                                                          WEIGHTED
                                                                UNIT      AVERAGE
                                                               OPTIONS    EXERCISE
                                                               GRANTED     PRICE
                                                              ---------   --------
<S>                                                           <C>         <C>
Outstanding at December 31, 1996............................         --
Granted.....................................................    725,957    $ .50
                                                              ---------
Outstanding at December 31, 1997............................    725,957    $ .50
                                                              ---------
Granted.....................................................    563,000    $2.08
                                                              ---------
Outstanding at December 31, 1998............................  1,288,957    $1.19
                                                              ---------
Granted.....................................................  1,803,359    $7.64
Exercised...................................................    (97,496)   $ .55
Canceled....................................................   (134,238)   $3.21
                                                              ---------
Outstanding at December 31, 1999............................  2,860,582    $5.19
                                                              =========
</TABLE>

     The Company applies APB No.25 and related interpretations in accounting for
its stock options issued to employees. Under APB No.25, because the exercise
price of the Company's employee stock options equal the fair value of the
underlying common stock on the date of grant, no compensation cost has been
recognized for its stock option grants to employees and directors except for the
113,125 unit options granted in July 1999. Had compensation cost for the
Company's stock option grants been determined based on the fair value at the
grant date for awards consistent with the method of SFAS No.123, the Company's
net loss would have increased the pro forma amounts for each year indicated
below:

<TABLE>
<CAPTION>
                                                 1997          1998         1999
                                              -----------   -----------   ---------
<S>                                           <C>           <C>           <C>
Net Loss:
  As Reported...............................  $(2,250,297)  $(2,137,381)  $(630,072)
                                              ===========   ===========   =========
  Pro Forma.................................   (2,269,162)   (2,216,536)  (1,552,231)
                                              ===========   ===========   =========
</TABLE>

     The resulting effect on the pro forma net loss disclosed for the year ended
December 31, 1997, 1998, and 1999 is not likely to be representative of the
effects on the net loss on a pro forma basis in the future years, because the
pro forma results include the impact of only one and two years respectively, of
grants and relating vesting, while subsequent years will include additional
grants and vesting.

     The fair value of each option is estimated on the date of grant using the
Black Scholes method option-pricing model with the following weighted average
assumptions used for grants in 1997, 1998, 1999: dividend yield of zero (0%)
percent, risk-free interest rate ranging from 6% to 8% and expected life of 4
years. As permitted under the provisions of SFAS No.123 and based on the
historical lack of a public market for the Company's stock, no factor for
volatility has been reflected in the option pricing calculation for 1997 and
1998. For 1999, the volatility factor is assumed to be 94.6%.

                                       47
<PAGE>   48
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table summarizes information about options outstanding under
the Plan at December 31, 1999:

<TABLE>
<CAPTION>
                     OPTIONS OUTSTANDING                          OPTIONS EXERCISABLE
-------------------------------------------------------------   ------------------------
                                   WEIGHTED        WEIGHTED                     WEIGHTED
                                   AVERAGE          AVERAGE                     AVERAGE
   RANGE OF        NUMBER         REMAINING        EXERCISE        NUMBER       EXERCISE
EXERCISE PRICE   OUTSTANDING   CONTRACTUAL LIFE      PRICE       EXERCISABLE     PRICE
--------------   -----------   ----------------    --------      -----------    --------
<S>              <C>           <C>                <C>           <C>             <C>
   $ 0.50          618,973        4.4 years       $     0.50         554,525     $0.50
   $ 1.75          396,125              5.4       $     1.75         144,938     $1.75
   $ 3.00          931,025              6.1       $     3.00          34,001     $3.00
   $ 5.90          455,625              6.5       $     5.90              --        --
   $11.00          109,000              6.7       $    11.00              --        --
   $16.00          240,000              6.9       $    16.00              --        --
$30.25-$38.50      109,834              9.9       $    31.30              --        --
                  --------                        -----------   -------------
                 2,860,582                        $     5.23         733,464
                  ========                        ===========   =============
</TABLE>

     At December 31, 1999, the range of exercise prices and weighted-average
remaining contractual life of outstanding unit options under the Plan was
$0.50-$38.50 and 5.9 years, respectively.

     In addition to the units granted under the Plans, during November 1996, the
Company granted unit investment options to three equity members in conjunction
with contributions made by those equity members. A total of 667,968 unit
investment options were granted at a weighted average exercise price of $0.75.
All unit options were granted with an exercise price equal to the fair market
value on the date of grant and were immediately vested. During 1999 all three
equity members exercised all 667,968 unit investment options prior to the
initial public offering.

(14) EMPLOYEE BENEFIT PLANS

  EMPLOYEE STOCK PURCHASE PLAN

     The 1999 Employee Stock Purchase Plan ("ESPP") was adopted by the board of
directors and approved by the stockholders. The plan became effective
concurrently with the IPO. The plan is designed to allow eligible employees of
Jupiter and its participating subsidiaries to purchase shares of the Company's
common stock, at semi-annual intervals, through periodic payroll deductions. A
total of 500,000 shares may be issued under the plan.

     The plan will have a series of successive offering periods, each with a
maximum duration of 24 months. However, the initial offering period will end on
the last business day in October 2001. The next offering period will begin on
the first business day in November 2001, and subsequent offering periods will be
set by our compensation committee.

     A participant may contribute up to 15% of his or her cash earnings through
payroll deductions and the accumulated payroll deductions will be applied to the
purchase price of shares on the participant's behalf on each semi-annual
purchase date (the last business day in April and October of each year). The
purchase price will be 85% of the lower of the fair market value of our common
stock on the participant's entry date into the offering period or the fair
market value on the semi-annual purchase date. The first purchase date will
occur on the last business day in April 2000. In no event, however, may any
participant purchase more than 850 shares, nor may all participants in the
aggregate purchase more than 125,000 shares on any one semi-annual purchase
date. Should the fair market value of the common stock on any semi-annual
purchase date be less than the fair market value on the first day of the
offering period, then the current offering period will automatically end and a
new offering period will begin, based on the lower market value.

                                       48
<PAGE>   49
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     As of December 31, 1999 contributions totaling $481,911 had been made to
the ESPP and are reflected as accounts payable on the consolidated balance
sheet.

  401(k) PROFIT SHARING PLAN

     The Company has a 401(k) profit sharing plan for its employees. Employees
who have completed one year of service and attained age 21 are eligible to
participate. The Company makes a matching contribution equal to 50% for every
one dollar of each participant's contribution and applies such matching
percentage to the participant's salary reduction, up to 6% of the participant's
compensation. During 1997, 1998 and 1999, the Company's matching contribution
was $12,435, $38,882 and $145,351, respectively.

(15) COMMITMENTS AND CONTINGENCIES

  (a) OFFICE LEASES

     The Company leases office space at various locations. The future minimum
lease payments under non-cancellable operating leases (with initial or remaining
lease terms in excess of one year) as of December 31, 1999 are:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
<S>                                                           <C>
2000........................................................  $1,235,816
2001........................................................   1,201,361
2002........................................................   1,244,208
2003........................................................   1,271,483
2004........................................................     620,597
2005 and thereafter.........................................   2,725,293
                                                              ----------
                                                              $8,298,758
                                                              ==========
</TABLE>

     Rent expense for the years ended December 31, 1997, 1998 and 1999 was
$335,063, $303,061 and $751,413, respectively.

     During November 1999, the Company terminated its existing London operating
lease agreement that was due to expire in April 2005 and signed a new
thirteen-year operating lease agreement for a substantially larger parcel of
office space. The lease agreement calls for monthly payments with no scheduled
increase in succeeding periods, although the rent amount can be reviewed in
November 2002 and November 2007. The future payments related to this new lease
agreement are reflected in the above schedule.

     During January 1999, the Company terminated its existing New York operating
lease agreements that were due to expire in May 2000 and December 2001 and
signed a new five-year operating lease agreement with the same landlord. The new
lease agreement covers the same office space as the terminated lease agreement
as well as additional office space. In connection with this lease agreement, the
Company received two months of free rent. The agreement also calls for scheduled
increases in succeeding periods. As such, the Company records rent expense on a
straight-line basis. The future payments related to this new lease agreement are
reflected in the above schedule, and the deferred rent balance as of December
31, 1999 reflects the impact of the new lease.

                                       49
<PAGE>   50
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  (b) EQUIPMENT LEASE

     Future minimum lease payments under non-cancellable operating leases as of
December 31, 1999 are:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
<S>                                                           <C>
2000........................................................  $ 80,416
2001........................................................    80,416
2002........................................................    63,906
2003........................................................    33,960
2004........................................................     9,750
Thereafter..................................................        --
                                                              --------
          Total.............................................  $268,448
                                                              ========
</TABLE>

(16) INCOME TAXES

     Income before provision for income taxes for the year ended December 31,
1999 consisted of:

<TABLE>
<S>                                                           <C>
Domestic Income -- LLC......................................  $   875,682
Domestic Loss -- Corporate..................................   (1,215,394)
Foreign Loss................................................     (492,360)
                                                              -----------
                                                              $  (832,072)
                                                              ===========
</TABLE>

     The income tax benefit for the year ended December 31, 1999 of $202,000 is
entirely due to deferred tax benefits. The Company had no income tax provision
for the years ended December 31, 1997 and 1998, as it was a LLC during those
years, and all taxes were the responsibility of the members.

     At December 31, 1999, for U.S. income tax purposes, the Company had
approximately $736,000 of net operating loss carryforwards from October 8, 1999
through December 31, 1999. Such net operating losses begin expiring in 2019.

     The Company has determined that approximately $382,000 of net deferred tax
assets at December 31, 1999 did not satisfy the realization criteria set forth
in SFAS No. 109, Accounting for Income Taxes. Management believes that based on
all available evidence, it is more likely than not that a portion of the
deferred tax assets will not be realized. Accordingly, a valuation allowance was
recorded to reduce the deferred tax assets to the amount expected to be
realized.

     The tax effects of temporary differences that give rise to significant
portions of the deferred tax liabilities are presented below:

<TABLE>
<S>                                                           <C>
Deferred tax assets:
  Accounts receivable due to allowance for doubtful
     accounts...............................................  $  15,000
  Accrued expenses..........................................     55,000
  Fixed assets due to differences in book vs. tax
     depreciation...........................................     62,000
  U.S. net operating loss carryforwards.....................    314,000
  Foreign net operating loss carryforwards..................    138,000
                                                              ---------
     Gross deferred tax assets..............................    584,000

Valuation allowance.........................................   (382,000)
                                                              ---------
  Net deferred tax assets...................................  $ 202,000
                                                              =========
</TABLE>

                                       50
<PAGE>   51
                          JUPITER COMMUNICATIONS, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(17) SUBSEQUENT EVENTS -- UNAUDITED

     The Company has reached definitive agreements to acquire all of the stock
of two privately held companies, Internet Research Group, and Net Market Makers,
for an aggregate consideration of approximately $50.6 million in cash and common
stock. The Company completed its acquisition of Internet Research Group in March
2000. The Company expects to close on the acquisition of Net Market Makers prior
to April 15, 2000. The Company will record the acquisitions under the purchase
method of accounting.

                                       51
<PAGE>   52

                                  SCHEDULE II

                          JUPITER COMMUNICATIONS, INC.

                       VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                                 BALANCE AT     PROVISION                    BALANCE AT
                                                 BEGINNING     FOR DOUBTFUL                    END OF
                                                 OF PERIOD       ACCOUNTS      DEDUCTIONS      PERIOD
                                                 ----------    ------------    ----------    ----------
<S>                                              <C>           <C>             <C>           <C>
For the year ended December 31, 1997
  Allowance for doubtful accounts..............   $$26,000       $25,483        $     --      $ 51,483
                                                  =======        =======        ========      ========
For the year ended December 31, 1998
  Allowance for doubtful accounts..............   $51,483        $    --        $(13,568)     $ 37,915
                                                  =======        =======        ========      ========
For the year ended December 31, 1999
  Allowance for doubtful accounts..............   $37,915        $98,672        $(23,195)     $113,392
                                                  =======        =======        ========      ========
</TABLE>

                                       52
<PAGE>   53

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     Not applicable.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Incorporated by reference from the information in our proxy statement for
the 2000 Annual Meeting of Stockholders which we will file with the Securities
and Exchange Commission within 120 days of the end of the fiscal year to which
this report relates.

ITEM 11.  EXECUTIVE COMPENSATION

     Incorporated by reference from the information in our proxy statement for
the 2000 Annual Meeting of Stockholders which we will file with the Securities
and Exchange Commission within 120 days of the end of the fiscal year to which
this report relates.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Incorporated by reference from the information in our proxy statement for
the 2000 Annual Meeting of Stockholders which we will file with the Securities
and Exchange Commission within 120 days of the end of the fiscal year to which
this report relates.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Incorporated by reference from the information in our proxy statement for
the 2000 Annual Meeting of Stockholders which we will file with the Securities
and Exchange Commission within 120 days of the end of the fiscal year to which
this report relates.

                                    PART IV

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

     (a) 1. Financial Statements.

          See Index to Consolidated Financial Statements and Supplementary Data
on page 32.

        2. Financial Statement Schedules.

          See Index to Consolidated Financial Statements and Supplementary Data
on page 32.

     (b) Reports on Form 8-K.

        None.

                                       53
<PAGE>   54

     (c) Exhibits.

<TABLE>
<CAPTION>
NUMBER                           DESCRIPTION
------                           -----------
<C>      <S>
 2.1     Agreement and Plan of Merger and Reorganization, dated as of
         February 28, 2000, among Registrant, IRG Acquisition Corp.,
         Internet Research Group and the Shareholders of Internet
         Research Group (Incorporated by reference to Exhibit 2.1 of
         Registrant's Current Report on Form 8-K, filed with the SEC
         on March 30, 2000).
 2.2     Stock Purchase Agreement, dated as of February 28, 2000,
         among Registrant, Net Market Makers, Inc. and the
         Shareholders of Net Market Makers, Inc.(Incorporated by
         reference to Exhibit 2.2 of Registrant's Current Report on
         Form 8-K, filed with the SEC on March 30, 2000).
 3.1     Amended and Restated Certificated of Incorporation
         (Incorporated by reference to Exhibit 3.2 of Registrant's
         Registration Statement on Form S-1(Registration No.
         333-84175)(the "IPO Registration Statement")).
 3.2     Amended and Restated Bylaws (Incorporated by reference to
         Exhibit 3.4 of the IPO Registration Statement).
 4.1     Specimen common stock certificate (Incorporated by reference
         to Exhibit 4.1 of the IPO Registration Statement).
 4.2     Please see Exhibits 3.1 and 3.2 for provisions of the
         Amended and Restated Certificate of Incorporation and
         Amended and Restated Bylaws of Registrant defining the
         rights of holders of common stock of Registrant.
10.1     1999 Employee Stock Purchase Plan (Incorporated by reference
         to Exhibit 10.4 of the IPO Registration Statement).
10.2     1999 Stock Incentive Plan (Incorporated by reference to
         Exhibit 10.5 of the IPO Registration Statement.
10.3     Form of Registrant's Registration Rights Agreement
         (Incorporated by reference to Exhibit 10.6 of the IPO
         Registration Statement).
10.4     Lease, dated April 7, 1998, between Abbey Life Assurance
         Company Limited and Registrant (Incorporated by reference to
         Exhibit 10.7 of the IPO Registration Statement).
10.5     Agreement of Lease, dated as of November 21, 1996, between
         625 Properties Associates and Registrant (Incorporated by
         reference to Exhibit 10.8 of the IPO Registration
         Statement).
10.6     Agreement of Lease, dated as of January 25, 1999, between
         Renaissance 627 Broadway LLC and Registrant (Incorporated by
         reference to Exhibit 10.9 of the IPO Registration
         Statement).
21.1     Subsidiaries of Registrant.
23.1     Consent of KPMG LLP.
27.1     Financial Data Schedule.
</TABLE>

                                       54
<PAGE>   55

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, as amended, Jupiter Communications, Inc. has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized in the
City of New York, State of New York, on this 30th day of March, 2000.

                                            JUPITER COMMUNICATIONS, INC.

                                            By: /s/ GENE DEROSE
                                              ----------------------------------
                                                Gene DeRose
                                                Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed by the following persons on behalf of the
registrant and in the capacities indicated on March 30, 2000.

<TABLE>
<CAPTION>
                       SIGNATURE                                            TITLES(S)
                       ---------                                            ---------
<C>                                                         <S>

                    /s/ GENE DEROSE                         Chairman of the Board and Chief Executive
--------------------------------------------------------    Officer
                      Gene DeRose

                  /s/ KURT ABRAHAMSON                       President, Chief Operating Officer and
--------------------------------------------------------    Director
                    Kurt Abrahamson

                   /s/ JEAN ROBINSON                        Chief Financial Officer
--------------------------------------------------------
                     Jean Robinson

                  /s/ JEFFREY BALLOWE                       Director
--------------------------------------------------------
                    Jeffrey Ballowe

                   /s/ ROBERT KAVNER                        Director
--------------------------------------------------------
                     Robert Kavner

                   /s/ KURT ANDERSEN                        Director
--------------------------------------------------------
                     Kurt Andersen
</TABLE>
<PAGE>   56

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
NUMBER                           DESCRIPTION
------                           -----------
<C>      <S>

 2.1     Agreement and Plan of Merger and Reorganization, dated as of
         February 28, 2000, among Registrant, IRG Acquisition Corp.,
         Internet Research Group and the Shareholders of Internet
         Research Group (Incorporated by reference to Exhibit 2.1 of
         Registrant's Current Report on Form 8-K, filed with the SEC
         on March 30, 2000).
 2.2     Stock Purchase Agreement, dated as of February 28, 2000,
         among Registrant, Net Market Makers, Inc. and the
         Shareholders of Net Market Makers, Inc.(Incorporated by
         reference to Exhibit 2.2 of Registrant's Current Report on
         Form 8-K, filed with the SEC on March 30, 2000).
 3.1     Amended and Restated Certificated of Incorporation
         (Incorporated by reference to Exhibit 3.2 of Registrant's
         Registration Statement on Form S-1(Registration No.
         333-84175)(the "IPO Registration Statement")).
 3.2     Amended and Restated Bylaws (Incorporated by reference to
         Exhibit 3.4 of the IPO Registration Statement).
 4.1     Specimen common stock certificate (Incorporated by reference
         to Exhibit 4.1 of the IPO Registration Statement).
 4.2     Please see Exhibits 3.1 and 3.2 for provisions of the
         Amended and Restated Certificate of Incorporation and
         Amended and Restated Bylaws of Registrant defining the
         rights of holders of common stock of Registrant.
10.1     1999 Employee Stock Purchase Plan (Incorporated by reference
         to Exhibit 10.4 of the IPO Registration Statement).
10.2     1999 Stock Incentive Plan (Incorporated by reference to
         Exhibit 10.5 of the IPO Registration Statement.
10.3     Form of Registrant's Registration Rights Agreement
         (Incorporated by reference to Exhibit 10.6 of the IPO
         Registration Statement).
10.4     Lease, dated April 7, 1998, between Abbey Life Assurance
         Company Limited and Registrant (Incorporated by reference to
         Exhibit 10.7 of the IPO Registration Statement).
10.5     Agreement of Lease, dated as of November 21, 1996, between
         625 Properties Associates and Registrant (Incorporated by
         reference to Exhibit 10.8 of the IPO Registration
         Statement).
10.6     Agreement of Lease, dated as of January 25, 1999, between
         Renaissance 627 Broadway LLC and Registrant (Incorporated by
         reference to Exhibit 10.9 of the IPO Registration
         Statement).
21.1     Subsidiaries of Registrant.
23.1     Consent of KPMG LLP.
27.1     Financial Data Schedule.
</TABLE>