<PAGE>

                                  UNITED STATES
                       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 fiscal year ended December 31, 1998

                         Commission File Number 0-21989

                        Medialink Worldwide Incorporated
                        --------------------------------
             (Exact name of registrant as specified in its charter)

              Delaware                                       52-1481284
   (State or other jurisdiction of                        (I.R.S. Employer
    incorporation or organization)                      Identification Number)

                   708 Third Avenue, New York, New York 10017
                   ------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (212) 682-8300
                                 --------------
              (Registrant's telephone number, including area code)

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

                Title of each class: Common Stock-$.01 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 or any amendment to this
Form 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant amounted to $58,966,975 at the close of business on March 25, 1999.

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of business on March 25, 1999: Common Stock -
5,328,958.

                       DOCUMENTS INCORPORATED BY REFERENCE

Applicable portions of the Proxy Statement for the Annual Meeting of
Shareholders to be held on June 2, 1999 are incorporated by reference in Part
III of this Form.


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                                     PART I
                                     ------

ITEM 1. BUSINESS.

Medialink is the world leader in providing video and audio production and
satellite distribution services to thousands of television and radio stations
and Internet sites for corporations and other organizations seeking to
communicate their news to the public. Medialink also provides corporate
consultation and production through its Medialink Corporate Television division
and its London-based international consultancy. In addition to broadcast media
services, the Company also provides press release distribution services and
still photographic services, as well as tracking and analysis of print and
broadcast news coverage to help its more than 1,500 clients understand how they
are perceived in the media, including the Internet, and to gauge the
effectiveness of their public relations efforts.

The Company's principal services have developed from its core business -
satellite distribution of video news releases (VNRs) and the electronic
monitoring of their broadcast on television. A VNR is the video equivalent of a
conventional press release and is used for the same purposes, such as to
announce a new product or service, explain a technological breakthrough,
communicate during a crisis or advocate a position on an issue of public
concern. VNRs are produced for easy integration into newscasts and are
distributed to the media for their use in complete or edited form.

The Company began offering production of video news releases in 1994 and has
since developed a full range of video, audio, Internet, still photography and
print services which it now provides on a global basis. Medialink enables its
clients to reach more than 3,200 newsrooms at television and radio networks,
local stations, cable channels, direct broadcast satellite systems, as well as
on-line services, including those available on the Internet. The Company also
coordinates live television interviews through satellite media tours (SMTs) and
produces live broadcasts of newsworthy events for its clients. Similar to its
video services, the Company also offers its clients audio news releases (ANRs)
and radio media tours (RMTs). The Company believes that its proprietary database
of over 40,000 news contacts, which includes their editorial preferences and
technical requirements, increases the Company's efficiency.

The Company provides its services to more than 1,600 clients. The Company's
clients include corporations such as AT&T, General Motors, IBM, Johnson &
Johnson, Dell Computer, Intel, Disney, British Airways, Pfizer Pharmaceuticals,
Philip Morris, Kraft Foods, Miller Brewing, Sony and Novartis; organizations
such as the American Association of Retired Persons and the AFL-CIO; and the
world's largest marketing communications firms such as Burson-Marsteller, Hill &
Knowlton, Ketchum Communications, Edelman Public Relations Worldwide and Weber
Public Relations Worldwide Group. One client, Philip Morris Companies Inc.,
which includes Philip Morris Incorporated, Kraft Foods, Inc. and Miller Brewing
Company, accounted for 16% of the Company's revenues in 1998. Materials
distributed by the Company have aired on ABC, CBS, NBC and their affiliates, as
well as national and regional cable news networks such as CNN and CNBC in the
United States, and the BBC, CNN International, Sky News, RAI (Italy) and NHK
(Japan) internationally. Streaming video versions of these materials have
appeared on Internet news sites such as ABCNews.com, CNN.com and broadcast.com.




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As an integral part of its services, the Company monitors media usage of the
material it distributes. Television usage is monitored using electronic
technology and data provided by several independent services, including Nielsen
Media Research and Competitive Media Reporting. Radio usage is monitored using
data provided by independent news tracking services, as well as data collected
automatically when radio stations call in to the Company's automated digital ANR
retrieval system. The Company also monitors usage of its material on the
Internet using data provided by Internet tracking services. The Company provides
its clients with monitoring reports which include the date and time at which the
clients' material was used, the media and markets in which it was used and a
report on the size and demographic composition of the audience. The Company
believes that this ability to accurately monitor and report usage on a timely
basis is critical to its success.

The Company also offers research and analysis services which provide customized
studies to measure the results of clients' public relations programs, analyze
competitive trends and measure return on investment of their marketing
communications efforts.

In June 1997 the Company acquired Corporate Television Group, Inc. ("CTV"), a
preeminent business video communications company. CTV, formerly Reuters
Corporate Television, a division of Reuters New Media, Inc., now operates as
Medialink Corporate Television, a division of the Company. This dynamic company
developed its reputation by providing strategic video communications consulting
and production services intended for internal as well as external audiences,
particularly in the area of crisis communications. CTV also produced VNRs, SMTs
and live satellite broadcasts, often in association with the Company. CTV
brought a roster of blue-chip clients such as Philip Morris, General Instruments
and Computer Associates.

In August 1997 Medialink acquired London based On Line Broadcasting Ltd., a
leading specialist provider of audio and video communications services, enabling
the Company to provide its clients for the first time live radio and television
broadcast exposure in Great Britain, complementing its existing U.S. live
broadcast capabilities.

In July 1998 the Company significantly expanded its international division with
the acquisitions of The London Bureau, a pre-eminent producer of corporate video
for use by British broadcasters, and Eye Catchers Press, the largest public
relations still photography agency in the United Kingdom.

The London Bureau, while providing many similar services to those already
offered by Medialink's International Division, has expanded the Company's client
base and adds strategic communications consulting to that division's
capabilities. This consultation approach, devised by Stuart Maister, founder and
managing director of The London Bureau, is similar to that of the Company's
Medialink Corporate Television division.




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The acquisition of Eye Catchers Press established an entirely new complementary
service to provide to Medialink's client base -- still photography. Eye Catchers
has an unrivaled reputation among picture editors of Britain's national and
regional press for producing creative and newsworthy photographs for corporate
and public relations agency clients. Since virtually all of Medialink's video
projects lend themselves to still pictures, the distribution of photographs to
newspapers or to end consumers via the Internet, is a simple and natural means
of broadening the reach of clients' news.

In November 1998, Medialink expanded its still photography service into the
United States through the acquisition of WirePix, a New York-based public
relations photo service. WirePix was founded by photojournalist Jim Sulley, a
15-year veteran news and public relations photographer. Wirepix's clients have
included corporations such as Hasbro, Colgate-Palmolive, Compaq Computer
Corporation and McDonald's. Public relations firms such as Burson-Marstellar,
Cohn & Wolfe, Fleishman Hillard and Manning Selvage & Lee have also engaged
Wirepix's services.

In March 1999 Medialink, through a wholly owned subsidiary, acquired The
Delahaye Group, Inc. ("Delahaye"), one of the world's premier providers of
public relations and marketing communications research. The acquisition of
Delahaye, a pioneer and leader in evaluating corporate reputations, presence,
and brand image on the Internet, complements Medialink's existing public
relations research practice, which provides measurement and analysis of
corporations' media coverage so they can evaluate how they are perceived by the
media and better plan their marketing communications efforts. Delahaye is a
global image and reputation measurement firm that measures a complete range of
marketing communications and public relations activities. Its research has
demonstrated how clients' communications efforts influence the attitudes, habits
and behaviors of target audiences. Delahaye also adds significantly more
international resources to Medialink's research practice. Delahaye created and
leads a global consortium of contractual strategic relationships with companies
in 13 nations, offering all aspects of corporate communication measurement
services. Known as DelNet(TM), this consortium serves clients in 40 nations on
five continents. Delahaye merged with Medialink's existing research operation
into a new division, Delahaye Medialink Communications Research. Blue-chip
clients now served by the combined division are AT&T, General Motors, Unilever,
MasterCard International and Fidelity Investments, as well as noted public
relations firms around the world.

The convergence of television and the PC screen and the emerging digital
revolution have opened up more opportunities for corporate communicators to use
broadcast services than ever before. Medialink's ability to offer companies and
organizations a totally integrated television, radio, photographic and Internet
service helps its clients reach broadcasters, the press and desktop PCs around
the world.


Financial Information About Business Segments

For financial information reporting purposes the Company considers substantially
all of its products and services to be included in a single operating segment.
Substantially all of the Company's products and services are marketed to the
same client base and are often bundled


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together and sold as one unit. The Company's geographic location outside the
United States is the United Kingdom.

Strategy

The Company's strategy is to maintain and leverage its leading position in video
distribution to become the premier provider of production, distribution and
monitoring services for its clients' news across all media. The Company believes
that it can continue to broaden its communications services and reach its
strategic objective by (i) developing new services; (ii) leveraging its client
relationships by cross-marketing services to its clients; (iii) continuing its
global expansion; and (iv) pursuing acquisitions and strategic alliances with
companies that can add to the Company's service capabilities or geographic
scope. The following are the key elements of the Company's strategy:

Develop New Services. In recent years the Company has expanded its services
beyond its original video distribution and live broadcasts services. Video
production services, introduced in 1994, contributed 29% of revenues for fiscal
1998; and research and analysis and audio production and distribution services,
introduced in 1994 and 1996, respectively, contributed 6% and 9% of revenues for
fiscal 1998. The Company developed its audio services to satisfy the demand of
existing clients and to offer its services to an expanded range of clients. With
the PR Data Acquisition in July 1996, the Company expanded its research
capabilities and added print news release distribution services. With the
acquisition of Corporate Television Group, Inc. in June 1997 the Company added
strategic video communications consulting and production services, particularly
with regard to crisis communications. Medialink also developed an exclusive
Spanish-language radio news release service, Radio Noticias, in 1997, for the
distribution of ANRs and RMTs to help its clients reach the rapidly growing
Hispanic audience.

The Company introduced digital video and audio distribution services for the
Internet in 1997. The Company digitizes both VNRs and ANRs for clients using its
premium distribution services and posts them along with the appropriate text
that further explains their news on NewStream.com, a multimedia Internet archive
service with hyperlinks to the client's homepage. The clips are also available
via Medialink's password-protected Website designed exclusively for journalists.
The Company then produces a synopsis, or advisory, which is distributed to
search engines such as Yahoo! and Infoseek, and "push" services such as
PointCast and BackWeb. These advisories contain hyperlinks that allow Internet
users to merely click and watch, hear and read client news.

Internet services expanded greatly in 1998 with the launch of live Webcasting
services. Powered by a strategic alliance with broadcast.com, the leading
distributor and aggregator of streaming video and audio on the Internet,
Medialink provides production, distribution and tracking of live events on the
Web. In tandem with traditional satellite videoconferences or as Web-only
events, these Webcasts link companies to their clients, consumers, shareholders,
employees or other crucial audiences live. Medialink also provides creative
counseling to help clients design special Web pages and to promote their
activities effectively. Events ranging from product launches and press
conferences to merger announcements and internal seminars have all been produced
for Medialink clients ranging from Dell Computer Corporation to Boeing.



                                       4
<PAGE>

With the acquisitions of UK-based Eye Catchers Press and the US-based WirePix,
Medialink began providing still photography service to its clients. Combining
pre-event consultation with expert photojournalism and digital delivery to
newsrooms and Internet sites, this service offers clients an efficient way to
coordinate their photographic needs with other media-related projects.

Leverage Client Relationships through Cross-Marketing. The Company's client
relationships typically begin with a single project, but often develop to a
point where a client may use several of the Company's services on multiple
occasions. The Company leverages its client relationships by selling its
existing clients additional communications services and providing new clients
obtained through acquisition, Medialink's broadcast services. Clients now look
to Medialink to handle production and distribution of their news in multiple
media, often on an international basis, and retain Medialink to monitor their
communications efforts. Through Medialink Corporate Television, Medialink can
provide "high-end" corporate video intended for use in analyst or client
presentations, board meetings and for a host of other non-broadcast
applications. Moreover, Medialink Corporate Television clients now utilize a
broad range of Medialink international, radio, analysis and Internet services.
Medialink's percentage of business from repeat clients has grown to 76%.

The Company also markets its expanded sophisticated research and analysis
service to its clients and makes research-only clients aware of the full range
of broadcast and print services. Because production and research services
require a higher degree of collaboration between the Company and its clients and
are typically delivered over a longer period of time, the Company believes that
these services contribute to developing closer client relationships, thus
increasing the Company's opportunity to sell clients a broader range of services
and to provide opportunities for annual contract-based revenues as well.

New services, such as Webcasting (which has benefits for companies seeking
business-to-business communications solutions) and still photography (which is
an integral and affordable service for every public relations and marketing
client) open additional doors to potential clients normally not reached by other
Medialink services.

Continue to Expand Globally. Since the Company established international
operations in London, approximately 10% of the Company's annual revenue growth
has been from international operations. Over the last two years the average
growth rate of the Company's revenues from its international operations was 90%.
The Company has expanded and will continue to expand its client base through
aggressive marketing, the establishment of additional sales offices in the U.S.,
the expansion of its international affiliate network, particularly in Asia and
the Pacific Rim, and the hiring of additional personnel. In December 1997, the
Company affiliated with Media 98, a media communication company operating in
Prague and Moscow. Media 98 will begin to develop the markets for the Company's
services in central Europe (Czech and Slovak Republics, Poland, Hungary, Romania
and Bulgaria), Russia, the Baltics and Eastern Europe.

Pursue Acquisitions and Strategic Alliances. The Company operates within a
fragmented industry that includes competitors that do not have the resources to
take advantage of emerging technologies or to offer a full range of integrated
communications support services. At the same time, the Company believes that its
clients are increasingly demanding a full array of integrated services on a
worldwide basis. The Company believes that these trends will encourage


                                       5
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consolidation within the industry and create opportunities for acquisitions and
strategic alliances. An alliance with broadcast.com, the leading distributor and
aggregator of streaming video on the Internet, has added to existing strategic
relationships with ABC Radio and The Associated Press.

Industry Background

The Company serves a global marketplace. Based on a combination of surveys taken
by the Company and published reports, the Company estimates that it competes in
a market which was approximately $750 million in 1998, considering only the
United States and the United Kingdom. The Company believes that the following
trends have created growing opportunities for its services in domestic and
international markets:

Increasing Importance of Television as a Communications Medium. The average
amount of time that Americans over the age of 18 spend watching television has
increased by 7% over the last five years to 30 hours per week per person and is
projected to grow an additional 5% over the next five years according to a
regularly published industry source. At the same time, the average time spent by
that same group reading newspapers has declined by more than 5% over this period
to 3.17 hours per week and is expected to continue to decline over the next five
years according to the same source. In addition, biannual surveys issued by the
Roper organization indicate that more than two-thirds of Americans get most of
their news from television.

Growing Number of Media Outlets. As the number of traditional media outlets
(broadcast, cable television and radio) has increased and as new media outlets
(on-line and Internet) develop, there has also been a proliferation of all-news
networks such as MSNBC and CNN. As a result, while the potential for television
coverage of newsworthy material is growing, organizations and their marketing
communications firms are looking for cost-effective and efficient ways of
reaching all of these media outlets.

Outsourcing of Communications Services. At the same time that new technologies
and new media outlets have rendered marketing communications more complex, few
organizations have developed the capacity to provide key marketing
communications services (including video production and distribution and
Webcasting) internally. Many organizations have also followed the trend of
reducing their marketing communications staffs and now often outsource these
functions. Outside service providers offer several advantages, including the
ability to reach a greater share of the available media; the avoidance of costs
such as hiring of additional staff; and the opportunity to act quickly by
utilizing the outside service providers' distribution channels that could take
months or years to develop internally.

The Company's Competitive Advantages

The Company believes that it is strategically positioned to benefit from
industry trends because of its ability to provide a wide array of video, audio,
print and Internet production, distribution, monitoring and research services on
a worldwide basis. The Company's competitive advantages include its extensive
operating history with media outlets, key industry relationships, prominent
client base, combination of professional skills, ability to integrate new
technology and worldwide distribution and production capabilities.




                                       6
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Extensive Operating History with Media Outlets. The Company has completed more
than 13,000 projects over the course of its twelve years of operations and, as a
result, has developed strong relationships with both television and radio
newsrooms worldwide. As evidenced by the frequent usage of its news releases by
media outlets, the Company believes that it has developed a reputation as a
reliable producer of newsworthy, broadcast-quality VNRs and ANRs. In addition,
the Company has created a proprietary database of information about more than
720 television stations, more than 2,300 radio stations in the U.S. and over 200
other media outlets worldwide. This database contains historical usage patterns
of the stations, information preferences demonstrated by the stations' news
directors and editors and incorporates underlying demographic data describing
the audiences reached by each station.

Key Industry Relationships. The Company has established strategic relationships
with prominent news distribution and support services companies. For the past
eleven years, the Company has benefited from an arrangement with the Associated
Press ( the "AP") for the use of its dedicated links to newsroom computers at
700 television and more than 200 radio stations in the U.S., to notify stations
of upcoming video and audio satellite transmissions. This system is the largest
advisory service for satellite-delivered news and is relied upon by television
and radio stations across the U.S. The Company also uses the AP for audio
transmissions by satellite. In addition, through an agreement with ABC Radio,
the Company's audio services reach more than 2,300 radio newsrooms in the U.S.
via the ABC satellite facilities. In June 1997 the Company signed an exclusive
agreement with ABC NewsWire to transmit the text advisories of Medialink radio
projects into more than 1,000 radio newsrooms via the ABC NewsWire. Another
exclusive agreement was announced in January 1998 with ABC Radio International,
making Medialink the only company to provide interview material produced for PR
clients to radio networks and stations in 200 countries via the network. The
recorded material from Medialink produced RMTs are distributed for free with
unrestricted use by affiliated stations worldwide. Medialink primarily monitors
domestic television station usage of VNRs, SMTs and live broadcast events under
an agreement with Nielsen Media Research and also uses Competitive Media
Reporting's monitoring services.

As news broadcasting throughout the world proliferates and as corporations
increasingly need to reach a global audience, Medialink created another pathway
to address both needs. An agreement with APTN, the Associated Press's
International television arm, transmits Video News Releases distributed by
Medialink digitally via satellite directly to television news outlets in more
than 50 nations. Full text advisories describing the content of the VNRs are
also sent directly to the newsroom computers via an APTN newswire. APTN system
subscribers include most major broadcasting outlets in Asia and Europe. Within
Latin America, APTN is the most widely accepted satellite and wire distribution
system. In addition to the unprecedented international reach, this new agreement
represents the first-ever agreement for digital video transmission in
Medialink's history.

More than 40 million personal computers are now video enabled. As more people,
both at the office and at home, turn to the Internet for news, Medialink forged
an important distribution alliance with the leading aggregator and distributor
of streaming video and audio on the Web: broadcast.com. This alliance provides
Medialink's heralded production expertise when public relations Webcasts are
initiated through broadcast.com. At the same time, the alliance brings the vast
distribution (nearly one million online video viewers per day) capabilities of
broadcast.com to bear when Medialink initiates a Webcast production.



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Prominent Client Base. The Company has provided its services to more than 1,600
clients worldwide. The Company has developed client relationships with such
companies as AT&T, Columbia Pictures, Dell Computer, Federal Express, Philip
Morris, Pfizer Pharmaceuticals, Kraft Foods, Miller Brewing, Hasbro, Intel, MCI
and Toyota. The Company also works with the world's largest public relations
firms, not-for-profit organizations and government entities. The clients for the
Company's research and analysis services include corporations such as GTE,
General Motors, Kraft Foods, AT&T, Miller Brewing and Andersen Consulting.
Assignments from existing clients represented a significant portion of the
Company's revenues for fiscal 1997 and fiscal 1998, accounting for 74% and 76%,
respectively. The Company believes that the prominence of its client base
enhances its reputation among news professionals and helps it attract new
clients.

Combination of Professional Skills. The Company's staff is comprised of
professionals from the fields of public and investor relations, broadcast and
print journalism, production, distribution and New Media technology and media
and marketing research. This combination of skills enhances the Company's
understanding of the communications services industry and has enabled the
Company to develop its wide-ranging expertise. The public relations skills of
its staff help the Company to effectively articulate the messages that its
clients want to communicate. The broadcast and print journalism background of
its employees provides the Company with the ability to translate the messages
into video and audio content in a broadcast style that is familiar to the news
media and that can be easily integrated into news programming. The production
and distribution technology background of the Company's operations staff
contributes a broad understanding of newsrooms' technical requirements as well
as the changing world of the Internet, which enables the Company to adapt its
services to changes in hardware and transmission systems. The media and
marketing background of the Company's research personnel enables Medialink to
integrate sophisticated market research techniques into its services.

Ability to Integrate New Technology. The Company's ability to integrate new
technology into its services significantly enhances its high quality,
cost-effective services worldwide. Medialink adapts and implements new
technology through internal development and deployment, strategic alliances and
marketing and vendor agreements. The Company continuously monitors technological
developments that have the potential to enhance the value of its services. The
Company has developed its Internet Webcasting services which allows selected
audiences (employees, shareholders and trade media, for example) to view events
such as merger/acquisition announcements, press conferences or videoconferences
on their PCs.

Worldwide Distribution and Production. The Company offers its services on a
worldwide basis through all of its offices and through a network of 18
affiliates. The affiliates are independently owned companies which possess
production and marketing capabilities as well as demonstrated working
relationships with local media. All affiliates are trained in the Company's
methods of operation. In Asia, the Pacific Rim, South Africa and Latin America,
the affiliates market the Company's services and provide the Company's clients
with production, distribution and monitoring services. In Europe, the affiliates
market the Company's services to their own clients and provide production
services for the Company's clients.




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Medialink Services

The Company offers its clients a wide array of services which may be purchased
individually or in a customized package.

<TABLE>
<CAPTION>
                                                                                    Research and
                                                                                 Analysis, Internet
        Video Services                         Audio Services                    And Other Services
        --------------                         --------------                    ------------------

<S>                                     <C>                                   <C>
Video News Release Distribution         Audio News Release Distribution       News Coverage Analysis
  and Monitoring:                         and Monitoring:
      Domestic                               Domestic                         Campaign Effectiveness
      International                          International                      Assessment

Electronic Press Kits                   Radio Media Tours                     Competitive Analysis

Internet Delivery                       Audio Conferences                     Performance Benchmarking

Live Broadcasts:                        Public Service Announcements          Syndicated Research Studies
      Satellite Media Tours
      Special Event Broadcasts          Internet Delivery                     Media Audits
      Video Conferences
                                                                              Strategic and Crisis
Video News Release Production:                                                  Communications Consulting
      Domestic
      International                                                           Live Internet Webcasting

Public Service Announcements                                                  Cyber Media Tours

Corporate Videos                                                              Still Photography &
                                                                                Digital Distribution

                                                                              Press Release Distribution
</TABLE>


Video Services

The Company offers various production and distribution video services. Each of
the Company's video distribution services is composed of a combination of three
basic elements: notification, distribution and monitoring. Notification is the
process of informing newsrooms that material will be available, when it will be
available and how it will be delivered. Distribution is the process of
delivering the material, usually by satellite. Monitoring is the process of
collecting data on its usage and analyzing and reporting that usage back to the
client.




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Video News Release Distribution. VNRs are the video equivalents of a
conventional press release and are used for the same purposes, such as to
introduce a new product or service, explain a technological breakthrough,
communicate during a crisis or advocate a position on an issue of public
concern. VNRs are produced on deadlines ranging from a few hours to a few weeks.
VNRs are distributed to broadcasters and formatted in broadcast-news style for
easy integration, in complete or edited form, into television and cable news
programs. A VNR package (fully narrated story with announce track) usually runs
from 90 seconds to two minutes. A VNR package also includes, in certain cases,
B-roll (supplemental video to help the television news producer customize the
story for local news), which may also be distributed separately.

Video News Release Production. The Company also produces VNRs. The VNR
production process begins with a consultation between the client and a Company
producer following which the producer and the client agree on the concept, a
deadline and a production budget. The producer prepares a script, schedules a
freelance camera crew, edits the videotape and submits it for client approval
prior to distribution.

Electronic Press Kits. The Company also produces and distributes Electronic
Press Kits (EPKs) for entertainment clients. EPKs are longer version VNRs
promoting upcoming feature films and home video cassettes that are distributed
to entertainment reviewers and reporters at television stations for airing as
part of their film reviews. EPKs include a trailer previewing scenes from the
film, location shots of the film sets and interviews of the stars and director.

Live Broadcast Services. Live broadcast services include Satellite Media Tours
(SMTs), news conferences and special-event broadcasts. SMTs consist of a
sequence of one-on-one satellite interviews with a series of pre-booked
television reporters typically at 12 to 20 stations across the country or around
the world. Typical SMT applications include, among others, an interview with a
celebrity or author promoting an upcoming event, product, movie or book release.
SMTs generally are conducted from a studio but can originate from remote
locations. SMTs may be aired live by the television station or recorded for
later airing. Other live broadcast services include interviews, news conferences
and interactive videoconferences.

Audio Services

Audio News Releases. ANRs are used for the same purposes as VNRs. ANRs are
distributed to radio stations for news, public affairs, radio programs and
stand-alone features. ANRs are produced on deadlines ranging from less than an
hour to several days. ANRs are produced for easy integration into a station's
programming and are formatted for their use in complete or edited form. Usage
monitoring is conducted by telephone surveys, traditional clipping services that
monitor radio news in selected major markets and an automated digital telephone
retrieval system.

Radio Media Tours. Medialink also offers RMTs, which are similar to SMTs and
consist of a sequence of one-on-one interviews with an author, performer,
executive or other spokesperson for a series of pre-booked radio stations across
the country or around the world. RMTs generally are conducted by telephone,
either from a studio, or as a conference call, often in conjunction with a SMT.



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Research and Analysis Services

Through its Delahaye Medialink Communications Research division, the Company
provides customized studies which clients use to gauge the effectiveness of
their public relations efforts. Based on data provided by electronic monitoring
and press clipping services, the Company uses statistical analyses to measure
the quantity and quality of the client's print and broadcast news coverage. The
reports include a digest of newspaper, magazine and broadcast coverage;
circulation and viewership totals; a qualitative scoring of the tone and content
of the coverage; and, upon request, an estimate of the price that equivalent
exposure would have cost if paid advertising were used.

Medialink also offers interpretive analyses that provide an overall appraisal of
the efficiency and impact of a client's communications efforts; a comparison of
the client's news coverage with that of its competitors; a benchmark against
which future efforts can be measured; and a gauge of return on investment for
marketing communications programs. In some cases the Company conducts field
research, interviewing journalists to ascertain their attitudes toward a client
company. Certain projects require the Company to survey the public to determine
how a client's reputation may have been affected by the client's public
relations efforts. Clients use these reports to continually refine their public
relations programs.

Other Broadcast Services

Medialink's other services include production and distribution of Public Service
Announcements (PSAs), distribution of photographs and other graphic material to
television stations and the distribution of conventional press releases. PSAs
are video messages in the public interest, generally produced for non-profit
organizations, which are aired by television stations as a public service. The
Company also transmits still photos or graphics that are distributed with a
press release to visually enhance the story and are used as illustrations in
newscasts while a news announcer reads the story. Medialink also provides print
distribution services, which include the distribution of conventional press
releases via facsimile and mail.

Internet Services

According to a Pew Center report, issued in January 1999, the Internet now
serves as a primary source of news for 25% of all American adults. That figure
is growing rapidly. Medialink provides its clients with services aimed at
capturing that growing audience.

Video/Audio on NewStream. Clients who engage Medialink for production or
distribution of a VNR or ANR can extend the reach of their news by posting the
project on NewStream.com, Medialink's video and audio news Website. Medialink
digitizes the video and audio, creates a dedicated page for each individual
project, and hyperlinks it to and from the client's Website. The project is also
promoted to search engines and Internet news sites to further maximize exposure.

Webcasting. Video and audio of a live event such as a press conference or
corporate announcement are digitized and streamed onto the Internet by
Medialink. Selected audiences, 


                                       11
<PAGE>

employees, investors, journalists, for example, are notified of the event in
advance and can view the Webcast live from their desktops.

Distribution and Monitoring Systems

Video. The Company provides VNR notification advisories to U.S. television
newsrooms through the AP Express/Medialink Newswire, as well as an Internet site
dedicated to newsrooms, medialinknewsnow.com. These notification advisories
include a description and script of the VNR, as well as the technical satellite
transmission information needed by stations to receive the material. Medialink
typically distributes the VNR by satellite transmission or by fiber optic cable.
To monitor domestic broadcasts of VNRs, the Company encodes each transmission
using technologies provided by Nielsen Media Research and Competitive Media
Reporting. This encoding enables Nielsen Media Research and Competitive Media
Reporting to electronically monitor the broadcasts. Monitoring data is then
analyzed by the Company and combined with relevant additional information
collected by Medialink, audience ratings from Nielsen Media Research and
audience demographics. Medialink packages this information for the client into
daily monitoring reports for the first five days after a VNR is distributed.
Reports are then provided on a weekly basis for the next three weeks and a final
comprehensive report is presented to the client five weeks after the VNR's
distribution.

The Company coordinates international distribution through its London office.
Notification advisories are provided by broadcast fax and telephone.
Distribution is primarily by satellite, although most international VNR
distributions also require cassette delivery by overnight courier. The Company
monitors international broadcasts through a combination of telephone surveys and
analysis of clipping services data.

The Company uses the AP Express/Medialink Newswire, faxes and telephone calls to
notify television stations of the availability of a SMT. SMTs are conducted by
satellite. The Company's media relations department schedules interviews with
each of the stations participating in the SMT. SMTs are monitored in the same
manner as are VNRs.

Audio. The Company uses the AP Express/Medialink Radio Newswire, ABC Newswire,
broadcast fax and telephone calls, as appropriate, to notify more than 2,700
radio stations. This group of stations includes all radio stations with
significant news or talk-centered programming. Medialink uses the satellite
transmission facility of the AP and ABC Radio Networks to transmit ANRs and
generic RMT interviews to stations that subscribe to these services.

Medialink has an agreement with ABC Radio for the satellite transmission of
ANRs. ABC Radio offers this service on a common-carrier basis, which allows for
the receipt of this material by ABC Radio network affiliates and otherwise
unaffiliated stations. Medialink also has an exclusive agreement with the AP
allowing for the transmission of ANRs to AP affiliated stations. Medialink also
stores and distributes ANRs on a digital system that can be called by radio
stations using a toll-free number. ANR monitoring is performed by telephone
surveys, by analyzing data provided by third party monitoring services and
tabulating station calls to the digital system.




                                       12
<PAGE>


The Company distributes RMTs in the U.S. by telephone. The scheduling of
interviews with stations is arranged by the Company's media relations
department. RMTs are monitored by the Company in the same manner as it monitors
ANRs. The Company has an exclusive agreement with ABC Radio International,
making Medialink the only company to provide interview material produced for PR
clients to radio networks and stations in 200 countries via the network. The
recorded material from Medialink RMTs is distributed for free with unrestricted
use by affiliated stations worldwide.

Sales and Marketing

As of December 31, 1998 the Company employed a team of 46 sales, marketing and
sales support personnel in nine U.S. offices and two offices in London. Services
are also marketed internationally by the Company's 18 affiliates located in
Europe, Asia, the Pacific Rim, South Africa and Latin America. Each salesperson
receives a base salary and is compensated through a commission structure that is
based on sales volume and profitability. Each salesperson participates in
ongoing training programs in sales techniques and communications technology. The
sales force concentrates on cultivating long-term relationships with clients.
Certain sales personnel specialize in particular industries, such as the
pharmaceutical or entertainment industries, developing an in-depth knowledge of
the industry. The support personnel screens prospects so that the sales
personnel can focus their efforts on presenting the Company's services in an
appropriate manner. Sales personnel are trained to represent all of the
Company's service offerings and are encouraged to create opportunities to sell
multiple services.

The Company's marketing programs are designed to position the Company as a
leading provider of integrated video, audio and research services.
Company-sponsored workshops, typically attended by 60 clients and potential
clients, are central to the Company's marketing efforts. At these workshops,
outside authorities and Company personnel make presentations concerning current
developments in the news and public relations industries. In addition, the
Company is able to discuss its services and demonstrate how these services can
serve the needs of workshop attendees. The workshops are held around the world
and cover such subjects as combining radio and television techniques;
international opportunities; and obtaining news exposure for health and medical
projects. Management believes that these workshops are an efficient way to
strengthen the bonds between its sales force and its clients, and that this has
contributed to the increase in the average revenues per salesperson/sales
assistant from $720,000 in 1997 to $823,000 in 1998. The Company also uses its
brochures, videotapes, advertisements in trade publications and its Websites as
marketing tools.




                                       13
<PAGE>


Competition

The markets for the Company's services are highly competitive. The principal
competitive factors affecting the Company are effectiveness, reliability, price,
technological sophistication and timeliness. Numerous specialty companies
compete with the Company in each of its business lines although no single
company competes across all service lines. Many of the Company's competitors or
potential competitors have longer operating histories, longer client
relationships and significantly greater financial, management, technological,
sales, marketing and other resources than the Company. In addition, clients
could perform internally all or certain of the services provided by the Company
rather than outsourcing such services.

The Company expects that competition will increase substantially as a result of
industry consolidations and alliances, as well as through the emergence of new
competitors. The Company believes that the market for communications services
may become increasingly concentrated in the future as a result of the
acquisition and integration of smaller service providers, which are likely to
permit many of the Company's competitors to devote significantly greater
resources to the development and marketing of new competitive products and
services. There can be no assurance that existing or future competitors will not
develop or offer services that provide significant performance, price, creative
or other advantages over those offered by the Company. The Company could face
competition from companies in related communications markets that could offer
services that are similar or superior to those offered by the Company. In
addition, national and regional telecommunications providers could enter the
market with materially lower electronic delivery costs, and radio and television
networks could also begin transmitting business communications separate from
their news programming. The Company's ability to maintain and attract clients
depends to a significant degree on the quality of services provided and its
reputation among its clients and potential clients as compared to that of
competitors. There can be no assurance that the Company will not face increased
competition in the future or that such competition will not have a material
adverse effect on the Company's business, operating results and financial
condition.

Employees

As of December 31, 1998, the Company had approximately 202 employees including
124 in client services , 46 in sales and marketing and 32 in administration.
Included in administration were executives and employees in new services
development aggregating 9. None of the Company's employees is represented by a
labor union. Management believes that its employee relations are good. The
Company also engages on a part-time, project-by-project basis, independent
production crews at various locations worldwide. These crews have the skills,
training and experience which the Company requires for its production services.




                                       14
<PAGE>


The Company's staff of professionals comes from a variety of backgrounds in the
fields of public and investor relations, broadcast and print journalism,
production and distribution technology, photojournalism, new media design and
applications, and media and marketing research. As a result of downsizing in the
broadcast journalism industry, the Company has been able to attract experienced
personnel from this industry. The Company seeks and hires staff with appropriate
credentials and relevant experience in the fields of journalism, media and
marketing, video/audio/new media production, satellite and Internet
distribution, research and analysis, photojournalism, and public and investor
relations services. Personnel have experience with organizations including ABC
News, CBS News, Reuters New Media, the BBC, Time Warner, Dow Jones, The New York
Times, BPI Communications, Viacom, PR Newswire, Knight Ridder, United Press
International, CNBC, The Times of London and Edelman Public Relations Worldwide.

The Company, a Delaware corporation, was incorporated in 1986.

ITEM 2.           PROPERTIES.

The Company's New York City headquarters consist of approximately 17,800 square
feet of leased space and the Company's international office located in London,
England, consists of approximately 3,500 square feet of leased space. The
Company also maintains leased offices in New York, New York; Washington, D.C.;
Los Angeles and San Francisco, California; Chicago, Illinois; Norwalk,
Connecticut; Dallas, Texas and Atlanta, Georgia. The Company believes that its
facilities are adequate to meet its current requirements.

ITEM 3.           LEGAL PROCEEDINGS.

The Company is not a party to any material legal proceedings.

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

None.







                                       15
<PAGE>


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

As of January 30, 1997 the Company's common stock began trading on the National
Market System of the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") under the symbol MDLK. The following table sets
forth the high and low closing sales prices per share of the Company's common
stock from the date of the Company's public offering.

                    Quarter Ended                           Low        High
                    -------------                           ---        ----

         January 30, 1997 through March 31, 1997            6-3/8      10-1/4
         Quarter ended June 30, 1997                        6-1/8       9-5/8
         Quarter ended September 30, 1997                   8-1/8      17-1/8
         Quarter ended December 31, 1997                   13-1/2      20-3/16

         Quarter ended March 31, 1998                      11-3/4        21
         Quarter ended June 30, 1998                       17-5/8      27-3/4
         Quarter ended September 30, 1998                  14-5/8      23-7/8
         Quarter ended December 31, 1998                   13-5/8      22-1/2

As of December 31, 1998, there were approximately 2,051 holders of record of the
Company's common stock.

The Company has not paid, and does not anticipate paying for the foreseeable
future, any dividends to holders of its common stock. The declaration of
dividends by the Company in the future is subject to the sole discretion of the
Company's Board of Directors and will depend upon the operating results, capital
requirements and financial position of the Company, general economic conditions
and other pertinent conditions or restrictions relating to any financing.






                                       16
<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA

The following selected consolidated financial data have been derived from the
Company's audited consolidated financial statements. The information below
should be read in conjunction with the consolidated financial statements and
related notes and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included elsewhere in this Annual Report on Form
10-K.

Certain acquisitions occurring in 1998, 1997 and 1996 have been accounted for
under purchase accounting and accordingly, are only reflected herein for dates
and periods on and after the respective dates of acquisition. See Note 3 of the
Company's Consolidated Financial Statements.

<TABLE>
<CAPTION>
                                                                    For the Years Ended December 31,
                                                     1998          1997          1996          1995          1994
                                                     ----          ----          ----          ----          ----
                                                                 (In thousands, except per share data)


Operating Data:


<S>                                                   <C>           <C>           <C>           <C>            <C>    
Revenues                                              $ 39,508      $ 26,777      $ 15,831      $ 10,625       $ 7,548

Gross profit                                            24,658        16,578         9,448         6,071         4,509

General and administrative expense                      19,485        13,264         7,953         5,373         4,069

Earnings before interest, taxes,
  depreciation and amortization                          6,864         4,258         1,758           847           568

Operating income                                         5,173         3,314         1,495           698           440

Income before provision for
   income taxes                                          5,565         3,752         1,488           713           441

Net income                                               3,325         2,375           844           381       $ 1,464

Diluted earnings per share                              $ 0.58        $ 0.44        $ 0.25        $ 0.11            --


Balance Sheet Data:


Working capital                                       $ 14,418      $ 14,484       $ 1,059       $ 1,722         $ 887

Assets                                                  31,876        28,668         8,122         4,387         3,237

Long-term debt, net                                        300           450           539             -             -

Stockholders' equity                                  $ 26,948      $ 22,124       $ 3,378       $ 2,425       $ 2,017

</TABLE>





                                       17
<PAGE>


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

RESULTS OF OPERATIONS

Fiscal Year 1998 as Compared to Fiscal Year 1997

Revenues increased by $12.73 million, or 48%, from $26.78 million in fiscal year
ended 1997 ("1997") to $39.51 million in fiscal year ended December 31, 1998
("1998"), primarily due to increased sales of production services, which
increased by $5.51 million, distributions services, which increased by $5.20
million, live broadcast services, which increased by $844,000 and other
services, primarily research, which increased by $1.18 million. In addition,
included in the increase in production and live broadcast revenue is
approximately $7.10 million from the Medialink Corporate Television Division
which acquired certain assets of Corporate TV Group, Inc. ("CTV") on June 16,
1997. Medialink believes that the remaining increase in revenue is the result of
the Company's growth in its sales and marketing team, its ability to provide
clients with a broader array of services and the Company's various acquisitions.

Direct costs grew by $4.65 million, or 46%, from $10.20 million in 1997 to
$14.85 million in 1998. Direct costs as a percentage of revenue was 38% of
revenue in both 1998 and 1997.

General and administrative expenses, which include the Company's salary and
salary-related costs ("Salaries"), increased by $6.22 million or 47%, from
$13.26 million in 1997 to $19.49 million in 1998. General and administrative
expenses as a percentage of revenues were 49% and 50% for 1998 and 1997,
respectively. Salaries increased by $4.03 million in 1998, which includes an
increase in Salaries of $913,000 relating to a full year from the CTV
operations. The balance of the increase in Salaries was due primarily to the
growth of Medialink's sales and operations staff in response to increased demand
for its services and the Company's various other acquisitions.

Earnings before interest, taxes, depreciation and amortization ("EBITDA")
increased by $2.61 million, or 61%, from $4.26 million in 1997 to $6.86 million
in 1998. As a percentage of revenue, EBITDA in 1998 was 17% as compared with 16%
in 1997.

Depreciation and amortization expense, which is included in general and
administrative expenses, increased by $746,000, or 79%, from $944,000 in 1997 to
$1.69 million in 1998. The increase was primarily due to amortization expense of
intangible assets arising from the Company's various acquisitions.

As a result of the foregoing, operating income increased by $1.86 million, or
56%, from $3.31 million in 1997 to $5.17 million in 1998. As a percentage of
revenue, operating income in 1998 was 13% as compared with 12% in 1997.

Interest and other income decreased by $51,000 from $486,000 in 1997 to $436,000
in 1998. The decrease was primarily due to the Company maintaining lower average
balances in cash and cash equivalents in 1998 as compared to 1997.

Income tax expense was calculated using Medialink's effective tax rates of 40%
in 1998 and 37% in 1997. The increase in the rate reflects changes in state and
local taxes as a result of differences in income earned in certain
jurisdictions.




                                       18
<PAGE>


ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
           RESULTS OF OPERATIONS (continued)

Net income increased by $950,000 or 40%, from $2.37 in 1997 to $3.32 million in
1998. Diluted earnings per share increased by $.14 or 32% from $.44 per share in
1997 to $.58 per share in 1998.


Fiscal Year 1997 as Compared to Fiscal Year 1996

Revenues increased by $10.95 million, or 69%, from $15.83 million in fiscal year
ended 1996 ("1996") to $26.78 million in 1997, primarily due to increased sales
of production services, which increased by $3.32 million, distributions
services, which increased by $3.29 million, live broadcast services, which
increased by $3.56 million and research services which increased by $576,000.
The increase in distribution and research revenue includes an increase in
revenue of approximately $699,000 from Medialink PR Data Corporation ("MPR"),
which acquired the assets of PR Data Systems, Inc. ("PR Data") in July 1996. In
addition, included in production and live broadcast revenue in 1997 is
approximately $5.30 million from the Medialink Corporate Television Division
which acquired certain assets of CTV on June 16, 1997. Medialink believes that
revenue increased from the leveraging of client relationships through the
cross-marketing of the Company's services by Medialink and its acquired
businesses. In addition revenue increased as a result of the growth of its sales
and marketing team.

Medialink's strategy includes the development of new services, leveraging
Medialink's existing client base through the cross-marketing of its services,
geographic expansion and growth through acquisitions and strategic alliances. On
August 11, 1997 Medialink successfully completed the acquisition of U.K.-based
On Line Broadcasting Limited ("On Line"), which provides live audio and video
broadcast services. On Line has expanded the services offered from the Company's
London office. In October 1997, the Company announced the formal opening of its
San Francisco office, bringing the number of Medialink's worldwide sales offices
to ten.

Direct costs grew by $3.82 million, or 60%, from $6.38 million in 1996 to $10.20
million in 1997. Direct costs as a percentage of revenue decreased from 40% of
revenue in 1996 to 38% in 1997 mainly as a result of improved margins on
Medialink's distribution and production services.

General and administrative expenses, which include the Company's Salaries,
increased by $5.31 million or 67%, from $7.95 million in 1996 to $13.26 million
in 1997. General and administrative expenses as a percentage of revenues were
50% for both 1996 and 1997. Salaries increased by $3.49 million in 1997, which
includes an increase in Salaries of $757,000 from MPR and the Salaries of
$884,000, from the CTV acquisition. The balance of the increase in Salaries was
due primarily to the growth of Medialink's sales and operations staff in
response to increased demand for its services.

EBITDA increased by $2.50 million, or 142%, from $1.76 million in 1996 to $4.26
million in 1997. As a percentage of revenue, EBITDA in 1997 was 16% as compared
with 11% in 1996.

Depreciation and amortization expense, which is included in general and
administrative expenses, increased by $682,000, or 260%, from $262,000 in 1996
to $944,000 in 1997. The increase was primarily due to amortization expense of
intangible assets arising from the acquisitions of PR Data and CTV.



                                       19
<PAGE>

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
           RESULTS OF OPERATIONS (continued)


As a result of the foregoing, operating income increased by $1.81 million, or
121%, from $1.50 million in 1996 to $3.31 million in 1997. As a percentage of
revenue, operating income in 1997 was 12% as compared with 9% in 1996.

Interest and other income increased by $463,000 from $23,000 in 1996 to $486,000
in 1997. This increase was primarily due to the investment of the net proceeds
of $15.6 million from Medialink's initial public offering which was completed in
February 1997, after underwriting discounts and offering costs. The remaining
proceeds are invested in short-term investments and money-market funds.

Income tax expense was calculated using Medialink's effective tax rates of 37%
in 1997 and 43% in 1996. The decrease in the rate reflects the investment of the
net proceeds of Medialink's initial public offering in tax-free municipal
securities and other changes in state and local taxes as a result of differences
in income earned in certain jurisdictions.

Net income increased by $1.53 million or 181%, from $844,000 in 1996 to $2.37
million in 1997. Diluted earnings per share increased by $.19 or 76% from $.25
per share in 1996 to $.44 per share in 1997.


LIQUIDITY AND CAPITAL RESOURCES

Medialink has financed its operations primarily through cash generated from
operations. Cash flow from operating activities amounted to $2.73 million in
1998 and $149,000 in 1997. Capital expenditures which are primarily incurred to
support Medialink's sales and operations were $1.28 million in 1998 and $573,000
in 1997. Medialink has no capital expenditure plans other than in the ordinary
course of business.

In July 1998 the Company acquired all of the outstanding common shares of
Tempest T.V. Limited, d/b/a The London Bureau ("The London Bureau"). The initial
purchase price of (pounds)1.00 million (approximately $1.65 million) was paid in
the form of (pounds)655,000 (approximately $1.07 million) in cash and the
issuance of 31,206 shares of the Company's common stock valued at approximately
(pounds)380,000 (approximately $628,000). Earn-out provisions allow for
additional payments of purchase price of up to approximately (pounds)2.80
million (approximately $4.61 million), based on certain revenue and
profitability goals of the International Division of Medialink, to be paid over
a period of three years. In connection with this acquisition two of the
shareholders of The London Bureau entered into deeds of covenant not to compete
with the Company with terms of three and four years, respectively. In
consideration for the deeds of covenant not to compete, the two shareholders
received payments aggregating approximately $485,000.

In June 1998 Medialink acquired certain assets of Eye Catchers Press. The
initial purchase price of (pounds)900,000 (approximately $1.50 million) plus
acquisition costs of approximately $90,000 was paid in cash. Earn-out provisions
allow for additional payments of purchase price of up to an additional
(pounds)100,000 per annum based on certain profitability targets over the next
three years. Earn-out amounts will be paid in the form of 80% cash and 20% in
Medialink common stock in year 1 and 25% cash and 75% in Medialink common stock
in years 2 and 3.




                                       20
<PAGE>

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
           RESULTS OF OPERATIONS (continued)


In June 1997 Medialink acquired certain assets of CTV. The initial purchase
price of $4.18 million was paid $3.55 million in cash and $333,000 in Medialink
common stock. Earn-out provisions allow for up to an additional $6.2 million to
be paid based upon certain revenue and profitability targets over the next five
years. Assuming the targets are met, the overall consideration will be in the
form of cash and Medialink common stock, as specified in the agreement. During
1998 Medialink made cash payments of approximately $1.21 million as additional
consideration for the CTV acquisition.

As at December 31, 1998 Medialink had $8.56 million in cash and cash equivalents
as compared with $11.58 million as at December 31, 1997. The decrease in cash
and cash equivalents resulted primarily from the Company's various acquisitions
and purchases of property and equipment, less cash provided by operating
activities. As at December 31, 1998, long-term debt was $426,000.

The Company believes that it has sufficient capital resources and cash flow from
operations to fund its net cash needs for at least the next twelve months.


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

With the exception of the historical information contained in this Form 10-K,
the matters described herein may contain forward-looking statements that are
made pursuant to the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements involve various risks and may cause actual
results to differ materially. These risks include, but are not limited to, the
ability of Medialink to grow internally or by acquisition, and to integrate
acquired businesses, changing industry and competitive conditions, and other
risks outside the control of Medialink referred to in its registration statement
and periodic reports filed with the Securities and Exchange Commission.


YEAR 2000 UPDATE

Management, along with a Year 2000 sub-committee of the Board of Directors, has
initiated an enterprise-wide program to prepare the Company's computer systems
and applications for the Year 2000, as well as to identify and address any other
Year 2000 operational issues which may affect the Company. Updates on the
Company's Year 2000 program are presented regularly to senior management and the
Board of Directors.

The Company's Year 2000 program began in the first quarter of 1998 and is
currently being administered by internal staff. The program consists of the
following three components relating to the Company's operations: (i) Information
Technology ("IT") computer systems and applications that may be impacted by the
Year 2000 problem, (ii) non-IT systems and equipment which include embedded
technology that may be impacted by the Year 2000 problem and (iii) third-party
relationships with which the Company has material relationships.





                                       21
<PAGE>

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
           RESULTS OF OPERATIONS (continued)


IT Systems and Applications

The Company has classified IT systems and applications into two categories;
hardware and software.

         Hardware:    The Company has completed an inventory of all of its IT
                      hardware and is currently accessing the impact of the Year
                      2000 on it. The Company has initiated the remediation
                      phase of the process and estimates that it is 85%
                      complete. The Company is targeting the completion of the
                      remediation phase for the middle of the 2nd quarter of
                      1999. The Company estimates that it is 70% complete in the
                      testing phase and is targeting to be completed in the 2nd
                      quarter of 1999.

         Software:    The Company has completed an inventory of all of its IT
                      software applications and is currently assessing the
                      impact of the Year 2000 on it. The Company is currently in
                      the remediation phase and estimates that it is 75%
                      complete. With the exception of its financial and
                      accounting software, the Company is targeting to complete
                      the remediation phase in the 2nd quarter of 1999. The
                      Company has accelerated the planned upgrading of its
                      financial and accounting software as a result of the Year
                      2000 issue and has targeted the completion of the
                      installation of a Year 2000 compliant financial and
                      accounting application in the 2nd quarter of 1999. The
                      Company estimates that it has tested approximately 50% of
                      its IT software, not including its accounting software,
                      and is targeting to be completed in the 2nd quarter of
                      1999. The Company is targeting the completion of its
                      testing phase on the accounting software in the 3rd
                      quarter of 1999.

Excluding normal system upgrades, the Company estimates that total costs for
conversion and testing of new or modified IT systems and applications will
aggregate approximately $150,000 to $350,000, including approximately $100,000
to $300,000 on the accelerated purchase of a financial and accounting software
application, through fiscal 2000. Costs related to the acquisition of new
hardware and software are expected to be capitalized and amortized consistent
with the Company's accounting policies. Consulting and other costs will be
expensed as incurred.

Non-IT Systems and Applications

The Company has completed an inventory of all of its non-IT systems and
applications and is currently assessing the impact of the Year 2000 on them. The
Company estimates that they are 90% complete with remediation and is hopeful to
complete this phase during the 2nd quarter of 1999. The Company has estimated
that it has tested 50% of its non-IT systems and applications and has targeted
the completion of this phase in the 3rd quarter of 1999. The Company does not
anticipate that the costs to rectify any Year 2000 issues as they relate to
non-IT systems and applications to have a material impact on the Company's
operations or financial condition.




                                       22
<PAGE>

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
           RESULTS OF OPERATIONS (continued)


Third Party Relationships

The Company has requested certification letters from all of its key vendors,
including facilities providers and financial institutions. The Company is
currently reviewing its responses and preparing follow-up requests where either
no or inadequate responses were received. The Company has also developed a list
of mission critical vendors and is in the process of arranging face-to-face
meetings with the appropriate individuals at these vendors to discuss their
readiness regarding Year 2000. The Company is targeting the completion of its
contingency plans with respect to its principal third party suppliers by the end
of 3rd quarter of 1999. The Company is also generating a list of key
clients/customers and is in the process of developing a plan to address Year
2000 issues as they relate to them. Costs to the Company in this area, excluding
costs due to unanticipated third party Year 2000 problems, will principally
consist of internal staff costs, which are not expected to be material.

Including the costs set forth above, the Company estimates that total program
costs for implementing its Year 2000 program will be $175,000 to $375,000, of
which approximately $20,000 has been incurred to date. These costs include costs
related to the matters above, as well as consulting and other expenses related
to infrastructure and facilities enhancements necessary to prepare the Company
for the Year 2000. The costs do not include internal staff costs incurred or to
be incurred in connection with the implementation of the program. Costs related
to the acquisition of new hardware and software are expected to be capitalized
and amortized consistent with the Company's accounting policies. Consulting and
other costs will be expensed as incurred. All Year 2000 costs will be paid in
cash and generated from the Company's operations. The above-stated amounts have
been budgeted for the appropriate fiscal years. Based on the current progress of
the Company's Year 2000 program, the Company is targeting the substantial
completion of its Year 2000 program, not including the implementation of its new
accounting software, to be the end of the 2nd quarter of 1999. The Company is
targeting the substantial completion of the implementation of its accounting
software to be the end of the 3rd quarter. The cost of the Company's Year 2000
program and the dates provided herein are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, many of
which are beyond the Company's control.

The failure to correct a material Year 2000 problem could result in an
interruption in certain normal business activities or operations of the Company.
Such interruptions could materially and adversely affect the Company's financial
condition, results of operations and cash flows. Based on current plans and
assumptions, the Company does not expect that the Year 2000 issue will have an
adverse impact on the Company as a whole. Due to the general uncertainty
inherent in the Year 2000 problem, however, there can be no assurance that all
Year 2000 problems will be foreseen and corrected, or if foreseen, corrected on
a timely basis, or that no material disruption to the Company's business or
operations will occur. Further, the Company's expectations are based on the
assumption that there will be no general failure of external local, national or
international systems (including power, communication, postal or other
transportation systems) necessary for the ordinary conduct of business. The
Company is currently assessing those scenarios in which unexpected failures
would have a material adverse effect on the Company and will attempt to develop
contingency plans designed to deal with such scenarios. There can be no
assurance, however, that successful contingency plans can, in fact, be developed
or implemented.





                                       23
<PAGE>

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
           RESULTS OF OPERATIONS (continued)


EFFECTS OF NEWLY-ISSUED ACCOUNTING STANDARDS

In June 1998, SFAS No. 133 ("SFAS 133"), "Accounting for Derivative Instruments
and Hedging Activities", was issued. SFAS 133 established accounting and
reporting standards for derivative instruments and for hedging activities. SFAS
133 requires that an entity recognize all derivatives as either assets or
liabilities and measure those instruments at fair value. The accounting for the
gain or loss due to changes in fair value of the derivative instrument depends
on whether the derivative instrument qualifies as a hedge. SFAS 133 is effective
for all fiscal quarters of fiscal years beginning after June 15, 1999. SFAS 133
can not be applied retroactively to financial statements of prior periods. The
Company anticipates that the adoption of SFAS 133 will not have a material
impact on the Company's consolidated financial position and results of
operations.

INFLATION

Inflation has not had, nor does the Company anticipate it having, a significant
impact on the Company's current and future operations.








                                       24
<PAGE>


ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following audited consolidated financial statements and related report are
set forth in this Annual Report on Form 10-K on the following pages:


        Independent Auditors' Report                                      F-1

        Consolidated Balance Sheets as of December 31, 1998 and           F-2
        December 31, 1997

        Consolidated Statements of Operations for the Years               F-3
        Ended December 31, 1998, December 31, 1997 and 
        December 31, 1996

        Consolidated Statements of Stockholders' Equity for               F-4
        the Years Ended December 31, 1998, December 31, 
        1997 and December 31, 1996

        Consolidated Statements of Cash Flows for the Years               F-5
        Ended December 31, 1998, December 31, 1997 and 
        December 31, 1996

        Notes to Consolidated Financial Statements                        F-6







                                       25
<PAGE>


                          Independent Auditors' Report
                          ----------------------------

The Board of Directors
Medialink Worldwide Incorporated:

We have audited the accompanying consolidated balance sheets of Medialink
Worldwide Incorporated and Subsidiaries as of December 31, 1998 and 1997, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1998. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements 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 Medialink Worldwide
Incorporated and Subsidiaries as of December 31, 1998 and 1997, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1998 in conformity with generally accepted accounting
principles.

                                                           KPMG LLP

February 15, 1999
New York, New York










                                      F-1

<PAGE>



                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        As of December 31, 1998 and 1997


<TABLE>
<CAPTION>
                                                                                      1998               1997
                                                                                      ----               ----

                                     ASSETS
   <S>                                                                            <C>                <C>
Current Assets:

   Cash and cash equivalents (Note 1)                                            $  8,556,759        $ 11,580,928
   Accounts receivable, less allowance for doubtful accounts of
     $208,000 and $191,401 in 1998 and 1997, respectively                           9,340,385           8,243,823
   Prepaid expenses and other current assets                                        1,063,158             634,038
   Deferred tax assets (Notes 1 and 9)                                                 86,000             119,000
                                                                                 ------------        ------------
       Total current assets                                                        19,046,302          20,577,789
                                                                                 ------------        ------------

Property and equipment, net (Notes 1 and 2)                                         2,454,101           1,449,901


Goodwill, customer list and other intangibles, net of accumulated 
  amortization of $1,933,962 and $717,897 in 1998 and 1997, resepectively 
  (Notes 1 and 3)                                                                   9,543,871           6,118,677
Deferred tax assets (Notes 1 and 9)                                                   463,000             200,000
Other assets                                                                          368,844             321,347
                                                                                 ------------        ------------
       Total assets                                                              $ 31,876,118        $ 28,667,714
                                                                                 ============        ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Current portion of long-term debt (Note 4)                                    $    126,331        $    122,651
   Accounts payable                                                                 1,928,222           2,305,077
   Accrued expenses and other current liabilities (Note 8)                          1,371,143           2,883,905
   Income taxes payable                                                             1,203,003             782,645
                                                                                 ------------        ------------
       Total current liabilities                                                    4,628,699           6,094,278
Long-term debt, net of current portion (Note 4)                                       299,843             449,892
                                                                                 ------------        ------------
       Total liabilities                                                            4,928,542           6,544,170
                                                                                 ------------        ------------
Stockholders' Equity (Note 5):
   Common stock. Authorized 15,000,000 shares; issued and outstanding
     5,325,598 and 5,182,037 shares in 1998 and 1997, respectively                     53,256              51,820
   Additional paid-in capital                                                      21,741,038          20,222,255
   Retained earnings                                                                5,252,831           1,928,268
   Accumulated other comprehensive income                                             (99,549)            (78,799)
                                                                                 ------------        ------------
       Total stockholders' equity                                                  26,947,576          22,123,544
                                                                                 ------------        ------------
       Total liabilities and stockholders' equity                                $ 31,876,118        $ 28,667,714
                                                                                 ============        ============

</TABLE>


          See accompanying notes to consolidated financial statements

                                      F-2

<PAGE>


                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For the Years Ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>
                                                                             1998             1997            1996
                                                                             ----             ----            ----

<S>                                                                     <C>              <C>             <C>         
Revenues                                                                $ 39,508,173     $ 26,776,838    $ 15,831,023

Direct costs                                                              14,849,726       10,198,862       6,382,882
                                                                        ------------     ------------    ------------

     Gross Profit                                                         24,658,447       16,577,976       9,448,141

General and administrative expenses                                       19,485,372       13,264,282       7,952,878
                                                                        ------------     ------------    ------------

     Operating income                                                      5,173,075        3,313,694       1,495,263

Interest expense                                                             (44,280)         (48,440)        (29,403)

Interest and other income                                                    435,768          486,482          22,501
                                                                        ------------     ------------    ------------

     Income before income taxes                                            5,564,563        3,751,736       1,488,361

Provision for income taxes (Notes 1 and 9)                                 2,240,000        1,377,214         644,733
                                                                        ------------     ------------    ------------

     Net income                                                         $  3,324,563     $  2,374,522    $    843,628
                                                                        ============     ============    ============


     Net income applicable to common stock                              $  3,324,563     $  2,347,868    $    508,155
                                                                        ============     ============    ============

     Basic earnings per share                                           $       0.63     $       0.49    $       0.55
                                                                        ============     ============    ============

     Diluted earnings per share                                         $       0.58     $       0.44    $       0.25
                                                                        ============     ============    ============

</TABLE>



          See accompanying notes to consolidated financial statements

                                      F-3
<PAGE>

               MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              For the Years Ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>
                                                                                                Series A, 10%            
                                                                                            Cumulative Convertible       
                                                               Common stock                    Preferred Stock           
                                                    ------------------------------     ----------------------------------
                                                       Number of                         Number of                       
                                                         Shares         Par Value          Shares       Par Value        
                                                    ------------------------------     ----------------------------------
<S>                                                      <C>            <C>               <C>         <C>                
Balance at December 31, 1995                             906,743        $ 9,067           655,417     $ 983,126          
                                                                                                                         
Comprehensive income:
  Net income                                                   -              -                 -             -          
  Foreign currency translation adjustment                      -              -                 -             -          
                                                                                                                         
     Total comprehensive income                                                                                          
Issuances of common stock                                 26,521            266                 -             -          
Stock options exercised                                    3,000             30                 -             -           
                                                      ----------       --------         ---------      --------          
Balance at December 31, 1996                             936,264          9,363           655,417       983,126          
                                                                                                                         
Comprehensive income:

  Net income                                                   -              -                 -             -          
  Foreign currency translation adjustment                      -              -                 -             -          
                                                                                                                         
     Total comprehensive income                                                                                          
Conversion of preferred stock to
   common shares                                       2,111,669         21,116          (655,417)     (983,126)         
Issuance of common stock in connection
   with initial public offering, net of offering
   costs and underwriter's fees                        2,000,000         20,000                 -             -          
Stock options exercised                                   66,650            667                 -             -          
Issuances of common stock in connection
   with acquisitions of businesses                        67,454            674                 -             -           
                                                      ----------       --------         ---------      --------          

Balance at December 31, 1997                           5,182,037         51,820                 -             -          
                                                                                                                         
Comprehensive income:

  Net income                                                   -              -                 -             -          
  Foreign currency translation adjustment                      -              -                 -             -          
                                                                                                                         
     Total comprehensive income                                                                                          
Stock options exercised                                   73,625            736                 -             -          
Issuances of common stock in connection
   with acquisitions of businesses                        69,936            700                 -             -           
                                                      ----------       --------         ---------      --------          

Balance at December 31, 1998                           5,325,598       $ 53,256                -       $     -           
                                                      ==========       ========         =========      ========          

<CAPTION>
                                                              Series B, 10%                   Series C, 10%
                                                          Cumulative Convertible          Cumulative Convertible                    
                                                             Preferred Stock                 Preferred Stock            
                                                    ------------------------------     ------------------------------   Additional 
                                                       Number of                        Number of                         Paid-In  
                                                         Shares       Par Value          Shares         Par Value         Capital  
                                                    ------------------------------     --------------------------------------------

<S>                                                     <C>         <C>                 <C>          <C>                 <C>       
Balance at December 31, 1995                            475,185     $ 641,500           629,130      $ 1,730,107         $ 352,524 
                                                                                                                                   
Comprehensive income:
  Net income                                                  -             -                 -                -                 - 
  Foreign currency translation adjustment                     -             -                 -                -                 - 
                                                                                                                                   
     Total comprehensive income                                                                                                    
Issuances of common stock                                     -             -                 -                -           163,921 
Stock options exercised                                       -             -                 -                -             3,720 
                                                      ---------      --------          --------       ----------        ----------
Balance at December 31, 1996                            475,185       641,500           629,130        1,730,107           520,165 
                                                                                                                                   
Comprehensive income:

  Net income                                                  -             -                 -                -                 - 
  Foreign currency translation adjustment                     -             -                 -                -                 - 
                                                                                                                                   
     Total comprehensive income                                                                                                    
Conversion of preferred stock to
   common shares                                       (475,185)     (641,500)         (629,130)      (1,730,107)        3,333,617 
Issuance of common stock in connection
   with initial public offering, net of offering
   costs and underwriter's fees                               -             -                 -                -        15,569,183 
Stock options exercised                                       -             -                 -                -           115,684 
Issuances of common stock in connection
   with acquisitions of businesses                            -             -                 -                -           683,606 
                                                      ---------      --------          --------       ----------        ----------

Balance at December 31, 1997                                  -      $      -                 -                -        20,222,255 

Comprehensive income:

  Net income                                                  -             -                 -                -                 - 
  Foreign currency translation adjustment                     -             -                 -                -                 - 
                                                                                                                                   
     Total comprehensive income                                                                                                    
Stock options exercised                                       -             -                 -                -           283,366 
Issuances of common stock in connection
   with acquisitions of businesses                            -             -                 -                -         1,235,417 
                                                             --            --                --               --         ----------
Balance at December 31, 1998                                  -          $  -                 -             $  -      $  21,741,038 
                                                             ==          ====                ==             ====      =============


<CAPTION>
                                                                            Accumulated Other
                                                            Retained           Comprehensive
                                                           Earnings /         Income - Foreign           Total
                                                          (Accumulated      Currency Tranlation      Stockholders'
                                                            Deficit)             Adjusment              Equity
                                                         ------------------------------------------------------------
                                                        
<S>                                                      <C>                          <C>            <C>        
Balance at December 31, 1995                             $ (1,289,882)                $ (1,690)     $  2,424,752
                                                                                                    ------------
Comprehensive income:                                   
  Net income                                                  843,628                        -           843,628
  Foreign currency translation adjustment                           -                  (58,767)          (58,767)
                                                                                                    ------------

     Total comprehensive income                                                                          784,861
Issuances of common stock                                           -                        -           164,187
Stock options exercised                                             -                        -             3,750
                                                          -----------                ---------      ------------
Balance at December 31, 1996                                 (446,254)                 (60,457)        3,377,550
                                                                                                    ------------
Comprehensive income:                                   
                                                        
  Net income                                                2,374,522                        -         2,374,522
  Foreign currency translation adjustment                           -                  (18,342)          (18,342)
                                                                                                    ------------
     Total comprehensive income                                                                        2,356,180
Conversion of preferred stock to                        
   common shares                                                    -                        -                 -
Issuance of common stock in connection                  
   with initial public offering, net of offering        
   costs and underwriter's fees                                     -                        -        15,589,183
Stock options exercised                                             -                        -           116,351
Issuances of common stock in connection                 
   with acquisitions of businesses                                  -                        -           684,280
                                                          -----------                ---------      ------------

Balance at December 31, 1997                                1,928,268                  (78,799)       22,123,544
                                                                                                    ------------
Comprehensive income:                                   
                                                        
  Net income                                                3,324,563                        -         3,324,563
  Foreign currency translation adjustment                           -                  (20,750)          (20,750)
                                                                                                    ------------

     Total comprehensive income                                                                        3,303,813
Stock options exercised                                             -                        -           284,102
Issuances of common stock in connection                 
   with acquisitions of businesses                                  -                        -         1,236,117
                                                          -----------                ---------      ------------
Balance at December 31, 1998                              $ 5,252,831                $ (99,549)     $ 26,947,576
                                                          ===========                =========      ============
</TABLE>

          See accompanying notes to consolidated financial statements

                                      F-4
<PAGE>

                MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Years Ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>
                                                                                  1998               1997               1996
                                                                                  ----               ----               ----

<S>                                                                          <C>                 <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                              $ 3,324,563         $ 2,374,522       $   843,628
                                                                             -----------         -----------       -----------
     Adjustments to reconcile net income to net cash
        provided by operating activities:
     Depreciation and amortization                                             1,688,716             944,330           262,366
     Deferred income taxes                                                      (230,000)           (179,610)          612,313
     Increase in accounts receivable                                            (844,954)         (3,799,942)       (1,669,200)
     Increase in other assets                                                    (47,497)           (211,745)             (578)
     (Increase) decrease in prepaid expenses and other current assets           (261,759)           (507,607)          132,322
     (Decrease) increase in accounts payable and accrued expenses             (1,320,037)            834,210           870,971
     Increase in income taxes payable                                            420,358             695,264            20,249
                                                                             -----------         -----------       -----------
          Total adjustments                                                     (595,173)         (2,225,100)          228,443
                                                                             -----------         -----------       -----------
          Net cash  provided by operating activities                           2,729,390             149,422         1,072,071
                                                                             -----------         -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Cash used in acquisitions                                                (4,614,532)         (4,249,482)         (119,801)
     Additions to property and equipment                                      (1,276,760)           (572,795)         (487,594)
                                                                             -----------         -----------       -----------
          Net cash used in investing activities                               (5,891,292)         (4,822,277)         (607,395)
                                                                             -----------         -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from exercise of employee stock options                            284,102             116,351             3,750
     Proceeds from issuance of common stock - net of offering costs                    -          15,589,183             9,186
     Payments on long term debt                                                 (146,369)           (127,220)          (23,841)
     Repayments of note payable - bank                                                 -                   -           (84,980)
                                                                             -----------         -----------       -----------
          Net cash provided by (used in) financing activities                    137,733          15,578,314           (95,885)
                                                                             -----------         -----------       -----------
          Net (decrease) increase in cash and cash equivalents                (3,024,169)         10,905,459           368,791
Cash and cash equivalents at the beginning of year                            11,580,928             675,469           306,678
                                                                             -----------        ------------       -----------
Cash and cash equivalents at end of year                                     $ 8,556,759        $ 11,580,928       $   675,469
                                                                             ===========        ============       ===========

</TABLE>


          See accompanying notes to consolidated financial statements
                                      F-5

<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   Principal Business Activity and Summary of Significant Accounting Policies:

Principal Business Activity
Medialink Worldwide Incorporated, a Delaware corporation incorporated on
September 24, 1986, and subsidiaries (collectively the "Company"), is a provider
of worldwide video and audio production and distribution services and public
relations research services for businesses and other organizations that seek to
communicate and evaluate their news through television, radio, the Internet and
other media.

Principles of Consolidation
The consolidated financial statements include the accounts of Medialink
Worldwide Incorporated and its wholly owned subsidiaries. Inter-company
transactions and balances have been eliminated in consolidation.

Revenue Recognition
Fees earned from the distribution and monitoring of video news releases and the
distribution of printed news releases are recognized in the period that the
release is distributed. Fees earned for satellite media tours and other live
events and the production of video news releases and still photographs are
recognized in the period that the services are performed. Fees earned from
research services are recognized using the percentage of completion method.

Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates by management. Actual
results could differ from these estimates.

Reclassifications
For comparability, certain 1997 and 1996 amounts have been reclassified, where
appropriate, to conform to the financial statement presentation used in 1998.

Cash Equivalents
The Company considers all highly liquid investments, including municipal
securities purchased with a maturity of three months or less, and money market
accounts, to be cash equivalents.

Depreciation and Amortization
Depreciation of property and equipment is provided using the straight-line
method over the estimated useful lives of the assets. Amortization of leasehold
improvements is being provided using the straight-line method over the shorter
of the lease term or the estimated useful life of the asset.

Amortization of Goodwill and Other Intangible Assets
Goodwill, which represents the excess of the aggregate purchase price paid by
the Company over the fair market value of the tangible and identifiable
intangible net assets acquired arising from business acquisitions accounted for
under the purchase method, is being amortized on a straight-line basis over
periods ranging from 10 and 20 years. Other intangible assets, including
customer lists and covenants not to compete, are being amortized on a
straight-line basis over periods of 3 to 7 1/2 years.




                                      F-6
<PAGE>


MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Foreign Operations
The financial position and results of operations of the Company's UK
subsidiaries and bureau are measured using local currency as the functional
currency. Assets and liabilities of the entities have been translated at current
exchange rates, and related revenue and expenses have been translated at average
monthly exchange rates. The aggregate effect of translation adjustments is
reflected as a separate component of shareholders' equity until there is a sale
or liquidation of the underlying foreign investment.

Income Taxes
The Company accounts for income taxes under the asset and liability method in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes".

Accounting for Stock-Based Compensation
The Company has elected to measure compensation cost using Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25") as
permitted by SFAS 123, "Accounting for Stock-Based Compensation" and discloses
pro-forma financial information as required by SFAS 123.

Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of
The Company accounts for long-lived assets in accordance with the provisions of
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." This Statement requires that long-lived
assets and certain identifiable intangibles be 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 exceed the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less
costs to sell.

Earnings per Share
The Company calculates earnings per share in accordance with SFAS No. 128,
"Earnings per Share". Basic earnings per common share is computed using net
income applicable to common stock and the weighted average number of shares
outstanding. Diluted earnings per common share is computed using the weighted
average number of shares outstanding adjusted for the incremental shares
attributed to outstanding options to purchase common stock. In addition, shares
of common stock issuable upon the conversion of all shares of Series A, Series B
and Series C Preferred Stock into shares of common stock are included in the
calculations as if they were outstanding for all periods presented. Weighted
average number of shares for the years ended December 31, 1998, 1997 and 1996
are as follows:

Weighed Average Shares Outstanding          1998         1997           1996
----------------------------------          ----         ----           ----

         Basic                            5,238,742     4,769,094       922,357
                                          =========     =========    ==========

         Diluted                          5,745,895     5,389,856     3,439,088
                                          =========     =========     =========





                                      F-7
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


2.       Property and Equipment:

Property and equipment, at cost, consists of:

<TABLE>
<CAPTION>
                                                     December 31,
                                                     ------------            Estimated
                                               1998             1997        Useful Life
                                               ----             ----        -----------
         <S>                                 <C>            <C>             <C>
         Office equipment                    $2,435,237     $1,364,634         5 years
         Furniture and fixtures                 736,544        578,552        10 years
         Leasehold improvements                 771,833        457,470      5 to 10 years
                                             ----------     ----------                   
                                              3,943,614      2,400,656
                                             ----------     ----------                   

         Less accumulated depreciation
              and amortization               (1,489,513)      (950,755)
                                             ----------     ----------                   

         Property and equipment, net         $2,454,101     $1,449,901
                                             ==========     ==========                   

</TABLE>


3.       Acquisitions:

On July 18, 1996 the Company entered into an asset purchase agreement with PR
Data Corporation ("PR Data"), a provider of public relations research services
and distributor of print news releases, and its stockholders. Under the terms of
the agreement the Company acquired all of PR Data's tangible and intangible
assets, and assumed certain liabilities amounting to $372,000, for $120,000 in
cash and the issuance of 24,000 shares of the Company's common stock valued at
$155,000 plus acquisition costs. In connection with this acquisition the Company
entered into non-compete agreements with the principal officers and stockholders
of PR Data. These agreements provide for quarterly payments through June 2001
aggregating $410,000 (see note 4).

On June 16, 1997 the Company acquired certain assets of Corporate TV Group, Inc.
("CTV"), a provider of strategic video communications to corporations, and other
organizations, for internal and external audiences. The initial purchase price
of $4 million plus acquisition costs of approximately $182,000 was paid $3.55
million in cash and by the issuance of 37,037 shares of the Company's common
stock valued at $333,333. Earn-out provisions allow for up to an additional $6.2
million to be paid based upon certain revenue and profitability targets through
2002. Assuming the targets are met, the additional consideration will be paid in
the form of cash and the Company's common stock, as specified in the agreement.
Through December 31, 1998 approximately $1.7 million of additional consideration
has been recorded under the earn-out provision. Additionally, at the closing,
the Company paid $300,000 to the stockholder of CTV for a non-compete agreement.





                                      F-8
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


On August 11, 1997 Medialink acquired all of the outstanding shares of On Line
Broadcasting Limited ("On Line"), a British corporation that provides live radio
and television public relations services. The initial purchase price of
approximately $356,000, including acquisition costs, was paid by the issuance of
21,995 shares of the Company's common stock, valued at $230,948 and
approximately $125,000 in cash. The purchase agreement provides for additional
consideration, based on certain revenue and net income levels and will be paid
by the issuance of the Company's common stock. During 1998 the Company issued
28,576 shares of the Company's common stock, valued at approximately $397,000,
as the final additional consideration for the acquisition.

In June 1998 the Company acquired certain assets of Eye Catchers Press ("Eye
Catchers"), a public relations still photography agency in the United Kingdom.
The initial purchase price of (pounds)900,000 (approximately $1.50 million) plus
estimated acquisition costs of $90,000 was paid in cash. Earn-out provisions
allow for additional payments of up to an additional (pounds)100,000 per annum,
in a combination of cash and the Company's common stock, based on certain
profitability targets over the next three years.

In July 1998 the Company acquired all of the outstanding common shares of
Tempest T.V. Limited, d/b/a The London Bureau ("The London Bureau"), a producer
of corporate video for use by British broadcasters. The initial purchase price
of (pounds)1.00 million (approximately $1.65 million) was paid in the form of
(pounds)655,000 (approximately $1.07 million) in cash and the issuance of 31,206
shares of the Company's common stock valued at approximately (pounds)380,000
(approximately $628,000). Earn-out provisions allow for additional payments of
purchase price of up to approximately (pounds)2.80 million (approximately $4.61
million), based on reaching certain revenue and profitability levels of the
International Division of Medialink, to be paid in the form of cash and the
Company's common stock, as specified in the agreement, over a period of three
years. In connection with this acquisition two of the shareholders of The London
Bureau entered into deeds of covenant not to compete with the Company with terms
of three and four years, respectively. In consideration for the deeds of
covenant not to compete, the two shareholders received payments aggregating
(pounds)295,000 (approximately $485,000).

These acquisitions have been accounted for as purchases for accounting purposes,
and the results of operations of the acquisitions have been included in the
consolidated statements of operations from the dates of acquisition. The
estimated purchase price in excess of the estimated fair value of the net
tangible assets acquired aggregates $10.36 million for all of the acquisitions,
of which $4 million and $6.36 million have been allocated to customer lists and
goodwill, respectively.






                                      F-9
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


The following unaudited pro forma summary presents the Company's results of
operations as if the acquisitions of CTV and The London Bureau had occurred as
of the beginning of fiscal 1997, after giving effect to certain adjustments,
including the amortization of values assigned to customer lists, goodwill and
non-compete agreements. This pro forma information has been prepared for
comparative purposes only and does not purport to be indicative of what would
have occurred had the acquisitions been made as of that date or of the results
which may occur in the future:

                                             For the years ended December 31,
                                             --------------------------------
                                                 1998               1997
                                                 ----               ----

         Revenues                              $40,575,000       $32,811,000
                                                ==========        ==========

         Net income                            $ 3,264,000       $ 2,908,000
                                                ==========        ==========

         Basic earnings per share              $       .62       $       .61
                                                ==========        ==========
         Diluted earnings per share            $       .57       $       .54
                                                ==========        ==========


4.       Long-term Debt:

The following table summarizes the Company's long-term debt:

                                                         At December 31,
                                                         ---------------
                                                        1998         1997
                                                      --------     --------

         Note payable                      (a)        $242,927     $283,457
         Covenant not to compete           (b)         183,247      261,753
         Capital lease obligations                       -           27,333
                                                       -------      -------
                                                       426,174      572,543
         Less: current portion                         126,331      122,651
                                                       -------      -------
                                                      $299,843     $449,892
                                                       =======      =======

(a)      Subsequent to the acquisition of PR Data (see note 3), the Company
         converted certain of the liabilities assumed, which were payable to a
         former stockholder of PR Data, into a note payable in the amount of
         $330,000. The note is payable in quarterly installments of $15,507,
         which includes principal and interest, at the rate of 8% per annum,
         through July 2003.

(b)      In connection with the acquisition of PR Data (see note 3) the Company
         entered into non-compete agreements with the principal officers and
         stockholders of PR Data. The agreements provide for quarterly payments
         through June 2001 aggregating $410,000. At the date of acquisition the
         present value of these payments, imputed at 9.5% per annum, was
         approximately $317,000 and was recorded as an intangible asset and
         related liability.






                                      F-10
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Aggregate maturities of long-term debt are as follows:

         For the year ending December 31,
         --------------------------------

                           1999                          $126,331
                           2000                           128,518
                           2001                            71,160
                           2002                            55,639
                           2003                            44,526
                                                         --------
                                                         $426,174
                                                         ========
5.       Stockholders' Equity:

In July 1996, the Company effected a 1.2 for one stock split. In addition the
Company restated its Certificate of Incorporation to increase its authorized
capitalization from 5,000,000 shares of common stock to 15,000,000. These
changes resulted in an increase in common stock and corresponding decrease in
additional paid-in capital. All per share data and references to numbers of
shares have been restated for all periods presented to reflect these changes.

On January 29, 1997 the Company completed a public offering of 2,000,000 shares
of its common stock, at a public offering price of $9 per share (the
"Offering"). The net proceeds to the Company approximated $15,600,000.

Annual dividends on the Series A, 10% cumulative convertible preferred stock,
Series B, 10% cumulative convertible preferred stock and Series C, 10%
cumulative convertible preferred stock were cumulative, commencing July 1, 1989
for Series A and Series B and October 31, 1989 for Series C, until declared and
paid at the discretion of the Board of Directors of the Company. At December 31,
1996, dividends in arrears on the Series A, Series B and Series C cumulative
convertible preferred stock amounted to $737,312, $481,150 and $1,190,011,
respectively. Each share of preferred stock was convertible at the option of the
stockholder into 1.2 shares of common stock. Simultaneously with the Offering
all of the issued and outstanding preferred shares were converted into 2,111,669
shares of common stock.

6.       Stock Option Plans:

The Company maintains a stock option plan (the "Stock Option Plan") covering all
employees and eligible participants, as defined. The plan provides for the
granting of incentive stock options to employees and non-qualified stock options
to eligible participants to purchase shares of the Company's common stock. The
option price for all incentive stock options is the fair market value of the
Company's common stock on the date of grant, except for employees owning more
than 10% of the outstanding common stock of the Company. The option price for
employees owning more than 10% of the outstanding common stock of the Company
may be no less than 110% of the fair market value of the shares on the date of
the option grant. The stock options vest over a period of four years and have a
term of ten years. During 1997 the Company increased the number of shares
reserved for the exercise of these 


                                      F-11
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

options by 500,000 to 1,170,808. As of December 31, 1998 the Company had 348,774
shares available for grant.

Activity in the Stock Option Plan is as follows:

                                           Shares Under        Weighted Average
                                              Option            Exercise Price
                                              ------            --------------

         Outstanding at January 1, 1996        251,100               $1.56
            Granted                            411,494               $3.71
            Exercised                           (3,000)              $1.25
            Canceled                           (90,000)              $1.25
                                              --------                    
         Outstanding at December 31, 1996      569,594               $3.16
                                               =======                    
         Exercisable at December 31, 1996      189,639               $2.48
                                               =======                    

         Outstanding at January 1, 1997        569,594               $3.16
            Granted                            117,150               $9.19
            Exercised                          (66,650)              $1.75
            Canceled                            (3,600)              $3.12
                                              --------                    
         Outstanding at December 31, 1997      616,494               $4.46
                                               =======                    
         Exercisable at December 31, 1997
            through 2007                       300,228               $3.70
                                               =======                    

         Outstanding at January 1, 1998        616,494               $4.46
            Granted                            137,050              $16.15
            Exercised                          (73,625)              $3.86
            Canceled                           (36,320)              $9.84
                                             ---------                    
         Outstanding at December 31, 1998      643,599               $6.74
                                               =======                    
         Exercisable at December 31, 1998
            through 2008                       333,571               $4.94
                                               =======                    

At December 31, 1998 the range of exercise prices and the weighted-average
remaining contractual lives of outstanding options was $1.25 - 19.50 and 7.5
years, respectively.

In February 1996, the Company established a stock option plan for its directors
(the "Director Plan"). The Director Plan provides for the granting of options to
non-employee members of the Company's Board of Directors to purchase shares of
the Company's common stock. The Company has reserved 180,000 shares for the
exercise of these options. The option price under the Director Plan shall not be
less than the fair market value of such share of common stock on the date of
grant. Under the Director Plan, options issued vest over a three year period and
are exercisable at such times as determined by the Company but no later than 15
years after the date of the grant.

Under the Director Plan options to purchase 25,000 shares at exercise prices of
$13.25 and $19.38, 25,000 shares at exercise prices of $9.38 and $10.13 and
62,400 shares at the exercise price of $3.54 were issued during 1998, 1997 and
1996, respectively. These options expire 10 years from the date of grant;
however, upon termination of board membership of any director, the options will
expire 90 days after the termination date, but no later than the expiration
date. Non-employee directors are also eligible for additional grants of 3,000
shares per year provided they continue to serve the Company in that


                                      F-12
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

capacity. Such future grants would become exercisable over a three-year period.
Under this plan, at December 31, 1998, 49,946 shares were exercisable at prices
ranging from of $3.54 to $19.38 per share.

If the Company had elected to recognize compensation cost at the grant date,
based on the fair value of the options granted, in 1998, 1997 and 1996, as
prescribed by SFAS 123, the Company's net income and earnings per share for the
years ended December 31, 1998, 1997 and 1996 would approximate the pro forma
amounts as indicated below:

                                          For the year ended December 31,
                                          -------------------------------
                                    1998              1997               1996
                                    ----              ----               ----

Net income - as reported          $3,324,563        $2,374,522         $843,628
Net income applicable to
   common stock - as reported      3,324,563         2,347,868          508,155


Net income - pro forma             2,322,438         1,905,420          832,046
Net income applicable to
   common stock - pro forma        2,322,438         1,878,766          496,573


Basic EPS - as reported                  .63               .49              .55
Basic EPS - pro forma                    .44               .40              .54


Diluted EPS - as reported                .58               .44              .25
Diluted EPS - pro forma                  .40               .35              .24



The fair value of each grant is estimated using the Black-Scholes Options
Pricing Model with the following assumptions: dividend yield of 0% for all
grants, expected volatility ranging from 57% for 1998 grants, 0% to 140% for
1997 grants and 0% for 1996 grants, risk free interest rates of 6.00% for 1998
and 6.00% for 1997 grants and 5.29% and 6.55% for 1996 grants and expected lives
of 9 years for 1998 grants, 9 years for 1997 grants and 6 years for 1996 grants.


                                      F-13
<PAGE>


MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)




7.       Commitments:

The Company is obligated under various non-cancelable operating leases for
office space expiring at various dates through 2007. Rent expense charged to
operations under these operating leases amounted to approximately $1,336,000,
$890,000 and $638,000 for the years ended December 31, 1998, 1997 and 1996,
respectively. Minimum future rental payments are as follows:

          For the year ending December 31,
          --------------------------------

                 1999                                  $1,049,000
                 2000                                     950,000
                 2001                                     918,000
                 2002                                     846,000
                 2003                                     684,000
                 Thereafter                             1,018,000
                                                        ---------
                                                       $5,465,000
                                                       ==========

The Company is obligated under an agreement with a vendor for communications
services. The agreement currently provides for guaranteed minimum annual
payments of approximately $504,000 through November 1999. Charges included in
direct costs on the accompanying consolidated statements of operations under
this agreement amounted to approximately $510,000, $524,000 and $512,000 for the
years ended December 31, 1998, 1997 and 1996, respectively.

The Company has entered into employment contracts with three of its executives
expiring through June 2002. Future minimum payments, including base salary and
minimum bonuses, related to these agreements, are as follows:

      For the year ending December 31,
      --------------------------------

                 1999                                        $805,000
                 2000                                         805,000
                 2001                                         595,000
                 2002                                         192,500
                                                           ----------
                                                           $2,397,500
                                                           ==========


                                      F-14

<PAGE>


MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8.       Accrued Expenses and Other Current Liabilities:

The following are included in accrued expenses and other current liabilities:

                                                        As of December 31,
                                                        ------------------
                                                        1998           1997
                                                        ----           ----

Production costs                                   $   283,541    $   525,385
Deferred Revenue                                       273,308        320,250
Earn-out provisions on acquisition (Note 3)             50,200      1,124,730
Other                                                  764,094        913,540
                                                    ----------     ----------
                                                    $1,371,143     $2,883,905
                                                    ==========     ==========

9.       Income Taxes:

The provision for income taxes consists of the following components:

                                        For the Year Ended December 31, 
                                   ----------------------------------------
                                   1998             1997               1996
                                   ----             ----               ----

    Current:
       Federal                  $1,834,000        $1,092,529          $11,660
       State and local             636,000           464,295           20,760
                                ----------        ----------         --------
                                 2,470,000         1,556,824           32,420
                                 ---------         ---------         --------
    Deferred:
       Federal                    (171,000)         (131,420)         463,090
       State and local             (59,000)          (48,190)         149,223
                                ----------         ---------         --------
                                  (230,000)         (179,610)         612,313
                                ----------         ---------          -------
                                $2,240,000        $1,377,214         $644,733
                                 =========         =========          =======

Income tax expense differs from the amount computed by multiplying the statutory
rate of 34% to income before income taxes due to the following:

<TABLE>
<CAPTION>
                                                                       For the Year Ended December 31,
                                                                       -------------------------------
                                                                    1998            1997           1996
                                                                    ----            ----           ----
<S>                                                              <C>              <C>             <C>

         Income tax expense at statutory rate                    $1,891,951       $1,275,590      $506,043
         Increase (decrease) in income taxes resulting
            from:
             Investment income not subject to Federal
                income tax                                         (119,000)        (165,000)            -
             State and local income taxes, net of Federal
                income tax benefit                                  379,267          234,307       112,189
             Non-deductible expenses                                 76,522           33,620        21,553
             Other                                                   11,260           (1,303)        4,948
                                                                  ---------        ---------       -------
                                                                 $2,240,000       $1,377,214      $644,733
                                                                  =========        =========       =======
</TABLE>

                                      F-15

<PAGE>


MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets are as follows:

                                                       As of December 31,
                                                       ------------------
                                                   1998                 1997
                                                 ---------            --------

         Allowance for doubtful accounts           $86,000             $78,000
         Accrued compensation                            -              41,000
         Depreciation and amortization of
            property and equipment                  50,000              82,000
         Amortization of intangibles               413,000             118,000
                                                   -------             -------
                                                  $549,000            $319,000
                                                   =======             =======


10.      Segment Information :

Management considers all of the Company's products and services to be included
as a single operating segment, therefore, the disclosure requirements of SFAS
131 consist only of segment information by geographic location:

A summary of United States and UK operations approximated for the years ended
December 31,


<TABLE>
<CAPTION>
                                      1998                             1997                         1996
                                      ----                             ----                         ----
                               US              UK                US             UK             US           UK
                               --              --                --             --             --           --
<S>                        <C>             <C>               <C>            <C>           <C>            <C>
Revenues:
  External clients         $34,342,000     $5,166,000        $23,665,000    $3,112,000    $13,452,000    $2,379,000
  Inter-segment                270,000        550,000            167,000       685,000        149,000       351,000
                            ----------      ---------         ----------    ----------     ----------    ----------
    Total revenues         $34,612,000     $5,716,000        $23,832,000    $3,797,000    $13,601,000    $2,730,000
                            ==========      =========         ==========     =========     ==========     =========

Operating income           $ 5,131,000      $ 239,000        $ 3,141,000     $ 267,000    $ 1,320,000     $  57,000
                            ==========       ========         ==========      ========     ==========      ========

Total assets               $26,160,000     $5,716,000        $24,871,000    $3,797,000
                            ==========      =========         ==========     =========
</TABLE>


Major Customers 

Revenues from one customer amounted to approximately 16% and 11% of total
revenues in 1998 and 1997, respectively.


                                       F-16

<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


11.      Supplemental Cash Flow Information:

Cash paid for interest and income taxes during the years ended December 31,
1998, 1997 and 1996 was as follows:

                                  1998         1997          1996
                                  ----         ----          ----

         Interest             $   44,000    $  48,000      $13,000
                              ==========     ========       ======

         Income Taxes         $2,050,000     $808,000      $29,000
                               =========      =======       ======

Non-cash investing and financing activities for the years ended December 31,
1998, 1997 and 1996 were as follows:


<TABLE>
<CAPTION>
                                                               1998           1997           1996
                                                               ----           ----           ----
<S>                                                        <C>             <C>             <C>

         Common stock issued in connection with
            acquisitions                                   $1,236,117      $   684,280      $155,000
                                                            =========       ==========       =======

         Accrued amounts related to acquisition            $       -       $1,124,730       $      -
                                                            =========       =========        =======
 
         Deferred offering costs                           $       -       $  (908,767)     $908,767
                                                            =========       ==========       =======
</TABLE>

12.      401(k) Plan:

The Company maintains a qualified 401(k) plan (the "Plan") covering all eligible
employees. Eligible employees may make elective salary reduction contributions
to the Plan of up to 15% of their annual compensation, subject to a dollar limit
established by law. In addition, the Company may provide, in its discretion, a
matching contribution equal to a percentage of the employee's contribution.
Participants are fully vested at all times in the amounts they contribute to the
Plan. Only participants who have completed a year of service during the Plan
year and are actively employed on the last day of such year are vested in the
Company's matching contributions for such year. The Company's matching
contributions amounted to approximately $77,000, $64,000 and $39,000 in 1998,
1997 and 1996, respectively.



                                       F-17
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


13.       Quarterly Results of Operations (Unaudited):
                                   
               (In thousands of dollars, except per share data)

<TABLE>
<CAPTION>

                                                                       For the Quarter Ended
                                                                       ---------------------
                                                       March 31,       June 30,         September 30,    December 31,
                                                         1998            1998               1998             1998
                                                         ----            ----               ----             ----
         <S>                                            <C>              <C>               <C>               <C>    
         Revenues                                       $8,911           $11,455           $9,374            $9,768
         Gross profit                                    5,276             6,655            5,898             6,829
         Operating income                                  802             1,708            1,168             1,495
         Net income                                        558             1,087              739               941
         Basic earnings per share                         0.11              0.21             0.14              0.17
         Diluted earnings per share                       0.10              0.19             0.13              0.16

</TABLE>



<TABLE>
<CAPTION>

                                                                         For the Quarter Ended
                                                                         ---------------------
                                                       March 31,       June 30,         September 30,    December 31,
                                                         1997            1997               1997             1997
                                                         ----            ----               ----             ----
         <S>                                            <C>               <C>              <C>               <C> 
         Revenues                                       $4,423            $6,640           $7,186            $8,528
         Gross profit                                    2,734             4,110            4,405             5,329
         Operating income                                  447             1,045              685             1,137
         Net income                                        329               729              480               837
         Basic earnings per share                         0.08              0.14             0.09              0.18
         Diluted earnings per share                       0.07              0.13             0.09              0.15
</TABLE>

14.      Subsequent Event:

         On March 12, 1999, through a wholly owned subsidiary, the Company
         acquired 100% of the outstanding shares of The Delahaye Group, Inc.
         ("Delahaye"). The acquisition, which will be accounted for as a pooling
         of interests, was completed through the issuance of 185,666 shares of
         Medialink common stock valued at approximately $2,800,000.


                                       F-18
<PAGE>

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


         The following unaudited pro forma results of operations of the Company
         give effect to the acquisition of Delahaye as though the transaction
         had occurred at the beginning of the periods presented. The unaudited
         pro forma financial information presented is not necessarily indicative
         of either the results of operations that would have occurred had the
         acquisition taken place at the beginning of the periods presented or
         the future results of operations of the combined companies.


                                                For the year ended December 31,
                                                    1998         1997
                                                    ----         ----

         Revenues                               $43,511,000   $30,779,000
                                                 ==========    ==========

         Net income                             $ 2,651,000   $ 2,443,000
                                                 ==========    ==========

         Basic earnings per share               $       .49   $       .49
                                                 ==========    ==========
         Diluted earnings per share             $       .45   $       .44
                                                 ===========  ===========

         Net income for the year ended December 31, 1998 included a
         non-recurring non-cash charge on the financial statements of Delahaye
         of approximately $450,000 ($266,000, net of applicable income taxes)
         which represented a compensation charge related to certain employee 
         stock options issued by Delahaye.



                                       F-19

<PAGE>

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

          None.

                                    PART III
                                    --------

          The information contained in Part III is incorporated by
          reference from the Company's definitive proxy statement for
          its annual meeting of Shareholders to be held on June 2, 1999.

                                     PART IV
                                     -------

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, 
          AND REPORTS ON FORM 8-K.
 (a)      1.       FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
CONSOLIDATED FINANCIAL STATEMENTS OF MEDIALINK
WORLDWIDE INCORPORATED AND SUBSIDIARIES
                                                                                    Page Number

<S>                                                                                     <C> 
Independent Auditors' Report                                                            F-1

Consolidated Balance Sheets as of December 31, 1998 and
December 31, 1997                                                                       F-2

Consolidated Statements of Operations for the Fiscal Years Ended December 31,
1998, December 31, 1997 and December 31, 1996                                           F-3

Consolidated Statements of Stockholders' Equity for the Fiscal Years Ended
December 31, 1998, December 31, 1997 and December 31, 1996                              F-4

Consolidated Statements of Cash Flows for the Fiscal Years Ended December 31,
1998, December 31, 1997 and December 31, 1996                                           F-5

Notes to Consolidated Financial Statements for the Fiscal Years Ended
December 31, 1998, December 31, 1997 and December 31, 1996                              F-6

         2. All schedules have been omitted because they are not applicable or
the required information is included in the financial statements or notes
thereto.

(b) No reports on Form 8-K have been filed during the last quarter of the period
covering this report.

</TABLE>


                                       26

<PAGE>

(c)      EXHIBITS
         --------

<TABLE>
<CAPTION>
   Exhibit                                                                                   Foot
   Number                           Description                                              notes
   ------                           -----------                                              -----
<S>             <C>                                                                           <C>
3.1             Amended and Restated Certificate of Incorporation of
                Medialink Worldwide Incorporated                                              (1)

3.2             Amended and Restated By-Laws of the Medialink
                Worldwide Incorporated                                                        (2)

10.1            Employment Agreement, dated as of November 18, 1996, by and
                between Medialink Worldwide Incorporated and Laurence Moskowitz               (3)
 
10.2            Employment Agreement, dated as of November 18, 1996, by and                   (4)
                between Medialink Worldwide Incorporated and J. Graeme McWhirter 

10.3            Employment Agreement, dated as of January 1, 1999, by and
                between Medialink Worldwide Incorporated and David Davis                      

10.4            Employment Agreement, dated as of November 18, 1996, by and
                between Medialink Worldwide Incorporated and Nicholas F. Peters               (5)

10.5            Employment Agreement, dated as of June 16, 1997, by and between
                Medialink Worldwide Incorporated and Richard Frisch                           (6)


10.6            Non-Compete Agreement, dated as of June 16, 1997, by and
                between Medialink Worldwide Incorporated, Corporate TV Group,
                Inc. and Richard Frisch                                                       (7)
                                                                                             
10.7            Indenture of Lease                                                            (8)

10.8            Asset Purchase Agreement, dated as of June 16, 1997, by and
                among Medialink Worldwide Incorporated, Corporate TV Group, Inc.
                and Richard Frisch                                                            (9)

10.9            Registration Rights Agreement, made as of June 16, 1997, by and
                between Medialink Worldwide Incorporated and Richard Frisch                  (10)

10.10           Lease, dated July 18, 1996, between Oakwood Avenue Partners and 
                Medialink PR Data Corporation                                                (11)
                                                                              
10.11           First Lease dated September 21, 1994, between Clemons Properties
                Partners and Video Broadcasting Corporation                                  (12)

10.12           First Lease Modification Agreement, dated March 4, 1996, between
                Clemons Properties Partners and Video Broadcasting Corporation               (13)

10.13           Second Lease Modification Agreement, dated March 4, 1996, 
                between Clemons Properties artners and Video Broadcasting
                Corporation                                                                  (14)

10.14           Third Lease Modification Agreement, dated May, 1996, between
                Clemons Properties Partners and Video Broadcasting Corporation               (15)

10.15           Lease, dated October 1, 1990, between 1401 New York Avenue,
                Inc. and Video Broadcasting Corporation                                      (16)
</TABLE>


                                       27
<PAGE>


<TABLE>
<S>             <C>                                                                         <C>
10.16           First Amendment of Lease, dated March 25, 1996, betwee0n 1401
                New York Avenue, Inc. and Video Broadcasting Corporation                     (17)

10.17           Office Lease, dated June 7, 1989, between Teachers' Retirement
                System of the State of Illinois and Video Broadcasting
                Corporation                                                                  (18)

10.18           First Amendment to Lease, dated June 1, 1994, between Teachers' 
                Retirement System of the State of Illinois and Video
                Broadcasting Corporation                                                     (19)

                10.19 Second Amendment to Lease, made as of the 19th day of
                November, 1996, by and between Teachers' Retirement System of
                the State of Illinois and the Company                                        (20)

10.20           Lease Agreement, dated November 14, 1994, between City & 
                Corporate Counsel Limited and Video Broadcasting Corporation 
                Inc.                                                                         (21)

10.21           Underlease, dated February 9, 1995, between City & Corporate
                Counsel Limited and Video Broadcasting Corporation Inc.                      (22)

10.22           Amended and Restated AP Express Agreement, dated November 1,
                1992, between Press Association, Inc. and Video Broadcasting 
                Corporation. Portions of Exhibit 10.33 have been omitted and 
                filed separately with the Commission                                         (23)

10.23           Addendum, dated February 21, 1996, to the AP Express Agreement,
                between Press Association, Inc. and Video Broadcasting
                Corporation. Portions of Exhibit 10.34 have been omitted and
                filed separately with the Commission                                         (24)

10.24           Amendment, dated November 18, 1996, to the Amended and
                Restated AP Express Agreement                                                (25)

10.25           Medialink Worldwide Incorporated 401(k) Tax Deferred Savings
                Plan                                                                         (26)

10.26           Amended and Restated Stock Option Plan and form of Stock
                Option Agreement                                                             (27)

10.27           Medialink Worldwide Incorporated 1996 Directors Stock Option Plan
                and form of 1996 Directors Stock Option Agreement                            (28)

10.28           Form of Indemnification Agreement                                            (29) 

10.29           Share Purchase Agreement by and among Medialink Worldwide 
                Incorporated and the Shareholders of Tempest T.V. Limited                    (30) 

10.30           Deed of Covenant by and between Medialink Worldwide Incorporated 
                and Stuart Maister                                                           (31) 

10.31           Deed of Covenant by and between Medialink Worldwide Incorporated 
                and Alan M. Greenberg                                                        (32) 

10.32           Executive Service Agreement by and between Medialink Worldwide 
                Incorporated and Stuart Maister                                              (33) 

10.33           Deed of Tax Covenant by and between Medialink Worldwide Incorporated 
                and the Shareholders of Tempest T.V. Limited                                 (34) 

21.             Subsidiaries of Medialink Worldwide Incorporated

23.             Consent of KPMG LLP

27.             Financial Data Schedule

</TABLE>


                                       28


<PAGE>

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

(1)    Filed as Exhibit 3.2 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 andss
       incorporated herein by reference.

(2)    Filed as Exhibit 10.2 to Medialink Worldwide Incorporated Pre-Effective
       Amendment No. 2 to the Registration Statement on Form S-1 (Registration
       No. 333-14119) dated November 20, 1996 and incorporated herein by
       reference.

(3)    Filed as Exhibit 2.5 to Form 8-A for Registration of Certain Classes of
       Securities Pursuant to Section 12(b) or (g) of the Securities Exchange
       Act of 1934 of Medialink Worldwide Incorporated (Registration No.
       000-21989) and incorporated herein by reference.

(4)    Filed as Exhibit 10.3 to Medialink Worldwide Incorporated Pre-Effective
       Amendment No. 2 to the Registration Statement on Form S-1 (Registration
       No. 333-14119) dated November 20, 1996 and incorporated herein by
       reference.

(5)    Filed as Exhibit 10.5 to Medialink Worldwide Incorporated Pre-Effective
       Amendment No. 2 to the Registration Statement on Form S-1 (Registration
       No. 333-14119) dated November 20, 1996 and incorporated herein by
       reference.

(6)    Filed as Exhibit 28.1 to Medialink Worldwide Incorporated Current Report 
       on Form 8-K dated July 1, 1997 and incorporated herein by reference.

(7)    Filed as Exhibit 28.2 to Medialink Worldwide Incorporated Current Report
       on Form 8-K dated July 1, 1997 and incorporated herein by reference.

(8)    Filed as Exhibit 28.3 to Medialink Worldwide Incorporated Current
       Report on Form 8-K dated July 1, 1997 and incorporated herein by
       reference.

(9)    Filed as Exhibit 2.1 to Medialink Worldwide Incorporated Current Report 
       on Form 8-K dated July 1, 1997 and incorporated herein by reference.

(10)   Filed as Exhibit 28.4 to Medialink Worldwide Incorporated Current Report
       on Form 8-K dated July 1, 1997 and incorporated herein by reference.

(11)   Filed as Exhibit 10.10 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(12)   Filed as Exhibit 10.11 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(13)   Filed as Exhibit 10.12 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(14)   Filed as Exhibit 10.13 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(15)   Filed as Exhibit 10.14 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(16)   Filed as Exhibit 10.16 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(17)   Filed as Exhibit 10.17 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(18)   Filed as Exhibit 10.19 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(19)   Filed as Exhibit 10.20 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.



                                       29


<PAGE>


(20)   Filed as Exhibit 10.39 to Medialink Worldwide Incorporated Pre-Effective
       Amendment No. 3 to the Registration Statement on Form S-1 (No. 333-14119)
       dated January 7, 1997, and incorporated herein by reference.

(21)   Filed as Exhibit 10.23 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(22)   Filed as Exhibit 10.24 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(23)   Filed as Exhibit 10.28 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(24)   Filed as Exhibit 10.29 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(25)   Filed as Exhibit 10.29 to Medialink Worldwide Incorporated Pre-Effective
       Amendment No. 2 to the Registration Statement on Form S-1 (No. 333-14119)
       dated November 20, 1996 and incorporated herein by reference.

(26)   Filed as Exhibit 10.33 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(27)   Filed as Exhibit 10.34 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(28)   Filed as Exhibit 10.35 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(29)   Filed as Exhibit 10.36 to Medialink Worldwide Incorporated Registration
       Statement on Form S-1 (No. 333-14119) dated October 15, 1996 and
       incorporated herein by reference.

(30)   Filed as Exhibit 2.1 to Medialink Worldwide Incorporated Current Report
       on Form 8-K dated July 8, 1998 and incorporated herein by reference.

(31)   Filed as Exhibit 28.1 to Medialink Worldwide Incorporated Current Report
       on Form 8-K dated July 8, 1998 and incorporated herein by reference.

(32)   Filed as Exhibit 28.2 to Medialink Worldwide Incorporated Current
       Report on Form 8-K dated July 8, 1998 and incorporated herein by
       reference.

(33)   Filed as Exhibit 28.3 to Medialink Worldwide Incorporated Current Report
       on Form 8-K dated July 8, 1998 and incorporated herein by reference.

(34)   Filed as Exhibit 28.4 to Medialink Worldwide Incorporated Current
       Report on Form 8-K dated July 8, 1998 and incorporated herein by
       reference.



                                       30

<PAGE>
       SIGNATURES
       ----------


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

MEDIALINK WORLDWIDE INCORPORATED
--------------------------------


By:     /s/ Laurence Moskowitz
---------------------------------
Laurence Moskowitz,
Chairman of the Board, Chief Executive Officer and President


By:    /s/ Graeme McWhirter
-----------------------------------
Chairman of the Board, Chief Executive Officer and President

By:     /s/ J. Graeme McWhirter
----------------------------------
J. Graeme McWhirter
Executive Vice President, Assistant Secretary and Chief Financial Officer
Dated:  March 29, 1999


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


/s/ Laurence Moskowitz                         ...............March 29, 1999
-----------------------------------------------
Laurence Moskowitz, Chairman
 of the Board, Chief Executive Officer and President
 /s/ David Davis                         .....................March 29, 1999
-----------------------------------------
 David Davis, Director
 President, Medialink International
 /s/ Harold Finelt                         ...................March 29, 1999
-------------------------------------------
 Harold Finelt, Director
 /s/ Donald Kimelman                  ........................March 29, 1999
--------------------------------------
 Donald Kimelman, Director
 /s/ James J. O'Neill                    .....................March 29, 1999
-----------------------------------------
 James J. O'Neill, Director
 /s/ Theodore Wm. Tashlik            .........................March 29, 1999
-------------------------------------
 Theodore Wm. Tashlik, Director
 /s/ Paul Sagan                        .......................March 29, 1999
---------------------------------------
 Paul Sagan, Director
 /s/ J. Graeme McWhirter               .......................March 29, 1999
-----------------------------------------------------
 J. Graeme McWhirter, Director
 Executive Vice President, Assistant Secretary and Chief Financial Officer
 /s/ Fred Meyer                        .......................March 29, 1999
---------------------------------------
 Fred Meyer, Director