JUPITER MEDIA METRIX INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
OR

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

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 000-25943
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JUPITER MEDIA METRIX, INC.

(Exact Name of Registrant as Specified in Its Charter)

DELAWARE 11-3374729
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

21 ASTOR PLACE, 6TH FLOOR 10003
NEW YORK, NY (Zip Code)
(Address of principal executive offices)

(212) 780-6060
(Registrant's telephone number, including area code)

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

SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Common Stock, par value $.01 per share

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 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 OTHER INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K. [ ]

As of March 15, 2002, there were 35,880,531 shares of the registrant's
Common Stock, $.01 par value, outstanding, and the aggregate market value of the
voting stock held by non-affiliates of the registrant was $5,646,809 (based on
the last reported sale price on the NASDAQ National Market on that date).

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant's definitive proxy statement for the
2002 annual meeting of stockholders, which will be filed with the Commission
subsequent to the date hereof pursuant to Regulation 14A of the Securities
Exchange Act of 1934, are incorporated by reference into Part III of this
report.
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THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS BASED ON OUR CURRENT
EXPECTATIONS, ASSUMPTIONS, ESTIMATES AND PROJECTIONS ABOUT JUPITER MEDIA METRIX
AND OUR INDUSTRY. THESE FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND
UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED
IN SUCH FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS, AS MORE FULLY
DESCRIBED IN THIS SECTION AND ELSEWHERE IN THIS REPORT. THESE FACTORS INCLUDE
OUR ABILITY TO DISPOSE OF CERTAIN OF OUR ASSETS AND BUSINESSES, THE TIMING OF
THESE DISPOSITIONS AND AMOUNTS TO BE REALIZED. OUR ABILITY TO CONTINUE OPERATING
AS A GOING CONCERN IS DEPENDENT ON THESE EVENTS. JUPITER MEDIA METRIX UNDERTAKES
NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS FOR ANY REASON,
EVEN IF NEW INFORMATION BECOMES AVAILABLE OR OTHER EVENTS OCCUR IN THE FUTURE.

PART I

ITEM 1. BUSINESS

INTRODUCTION

Jupiter Media Metrix is a provider of innovative and comprehensive research
and measurement products and services that analyze the impact of the Internet
and new technologies on commerce and marketing. Our services include Media
Metrix, Jupiter Research, AdRelevance, Jupiter Events and LiveMetrix. Media
Metrix offers clients a broad range of products and services that collect
audience data and measure new media usage on the Internet and other digital
media. Jupiter Research provides clients with strategic analysis and insights,
including industry trends, forecasts and best practices, all backed by
proprietary data. AdRelevance specializes in the automated retrieval and
delivery of online advertising data. Jupiter Events hosts conferences focusing
on the global digital economy. LiveMetrix delivers continuous, in-depth analysis
of traffic on a client's Web site and advertising campaign data.

All of our products and services are designed to assist companies in making
critical business decisions and in utilizing Internet technologies to more
effectively operate their businesses. Clients utilize our research and data
products to define business opportunities and competitive threats; analyze
technology adoption and usage; prioritize new business initiatives; identify
potential partners and alliances; evaluate and manage vendors; buy, sell and
plan advertising; and track audience behaviors. We have a highly diversified and
global client base, including large and small companies in the media,
technology, financial services, advertising, consumer products, retail, travel
and professional services industries. As of December 31, 2001, we had
approximately 1,300 client contracts for our research and measurement products.
We provide our research and measurement products generally through annual
subscriptions, and currently deliver our products primarily over the Internet.

As a result of continuing unfavorable market conditions in our business
segments and our continuing losses, we are in the process of disposing of
certain of our business units. Our success in disposing of these units and
reducing our losses will be dependent on numerous factors beyond our control.
Unless we are able to dispose of certain of our business units and reduce our
losses, our ability to continue as a going concern is in doubt.

Our principal executive offices are located at 21 Astor Place, New York,
New York 10003, and our telephone number is 212-780-6060.

PRODUCTS, SERVICES AND METHODOLOGY

Our measurement and research products and services are designed to enable
companies to make intelligent business decisions about Internet commerce and
consumer and business use of the Internet and related technologies.

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MEDIA METRIX PRODUCTS AND SERVICES

Our principal audience measurement products and services are derived from
data collected from our panels and stored in our core databases, which we use to
produce our syndicated and custom Internet audience measurement reports and
services. The Jupiter Media Metrix panel is a high quality, representative
sample of personal computer users, including at-home and at-work users. We
recruit panelists by random digit dial (RDD) telephone solicitation. We also use
direct mail to reach individuals within the RDD sample frame. The panel
currently consists of over 43,000 individuals under continuous measurement in
the United States and over 38,000 individuals under continuous measurement
beyond U.S. borders. In connection with our panel recruitment process, each
panelist is required to fill out a detailed questionnaire, providing background
demographic information including age, gender, household income, geographic
location, level of education, size of household and job classification.

Our proprietary metering system, or meter, is a software application
installed on a panelist's personal computer. It monitors activity of the
personal computer's operating system and browser. The meter passively records
what users do on their personal computers on a second-by-second basis,
including:

- the start and stop time of each activity;

- the application in use;

- detailed usage activity for proprietary online services; and

- page-by-page viewing on the Internet.

We collect the data we need for our products and services without any
agreement or arrangement with operators of Web sites or operators of proprietary
online services like America Online. Because we measures our panelists' computer
usage and not activity at a particular Web site or proprietary service, no
agreements with the operators of Web sites or online services are necessary.

Our metering software captures additional details of Internet usage to
accurately report audience behavior of emerging media such as streaming audio
and video and provides real time transmission of data on usage. Our meter also
allows us to automatically update the software via the Internet, with no action
required on the part of our panelists. We also collect data via questionnaires
distributed through direct mail and over the Web. We utilize our own software to
collect information on hardware configurations and software installations of our
panelists.

The statistical quality of the information that we collect is a function of
minimizing both sampling error and measurement error. Sampling error is a
function of the size and quality of the sample. Measurement error is a function
of the scope of the universe under measurement and the quality of its meter for
comprehensive data collection. We minimize sampling error by maintaining a large
panel. We minimize measurement error by measuring all Internet usage, including
the Web, proprietary online services, like America Online, and all other
activity on our panelists' personal computers.

Once the meter has collected the data from a panelist's personal computer,
data are transmitted to our offices for processing via automatic transfer over
the Web. Data are then combined with those of all the other panelists. The data
are then used to construct several databases, which we use to provide our
reports. We deliver reports via our proprietary Web-based delivery systems or
e-mail.

Our current syndicated audience measurement product offerings consist of
the following:

- Digital Media Ratings. Our core syndicated audience measurement product
includes an extensive array of syndicated and custom Digital Media usage
reports. The flagship Digital Media Audience ratings provide key measures
such as unique visitors and visitor demographic information on a monthly,
weekly and daily basis for the entire digital media universe -- including
the world-wide-web entities, digital applications and proprietary online
services (e.g. America Online). The Digital Media reports include over 27
categories and 60 subcategories which allows clients to align digital
media entities against their defined competitive set.

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- Technology Measurement. This report provides a detailed view of the
software applications used by all computer users in the our panel. The
report highlights many different types of applications including
Productivity and Utilities, Communications and Multimedia, and Enjoyment
and Education.

- Local Markets. We track national and local market reach, demonstrating
how national and local Web sites perform within each of the 40 top local
markets.

- Consumer. Our Audience Insite Measures Report provides information
linking metered Internet usage behavior to consumer media habits, product
and service usage, lifestyle characteristics and demographics including
banking and credit card activity, Internet shopping behavior, television
viewing habits and hobbies. The Online Shopping Report tracks online
shopping activities across more than 500 Internet sites within 18
categories. Key measures include the number of repeat shoppers and the
number of engaged shoppers, defined as shoppers who spend more than three
minutes on a Web site. Shopper Referral Reports are custom reports on the
sites that are delivering engaged shopper traffic to other sites.

- Ad Sales Networks. We provide detail on reach, frequency and demographic
information across ad sales networks and other ad-supported networks like
DoubleClick and 24/7 Media. The measures reported include the full
network reach and reach of those Web pages where ads have been served.

JUPITER RESEARCH SERVICES

Our research services provide our clients with a wide range of proprietary
research, data and advisory analysis and are structured as continuous analytical
services. We have designed our research services to enable clients to make
intelligent business decisions about Internet commerce and consumer and business
use of the Internet and related technologies. These research products and
services define business and strategic goals, identify revenue opportunities,
evaluate business models, analyze marketing strategies, assess enabling
technologies and provide advice on organizational structures and vendor
selections.

A key component of our research services is access to our research analysts
for discussions and debate related to their research topics. Our clients
typically seek advice or have questions regarding new business or marketing
initiatives, best practices, new opportunities or competitive threats, market
forecasts and/or the value of mergers and strategic partnerships. Clients may
submit issues or questions initially to our dedicated client inquiry staff via
telephone or e-mail. The client inquiry staff, which consists of trained
research professionals who are familiar with our research products and services,
coordinates the responses and actively manages access to the analysts. Based on
their subscription level, clients will receive password-only access to our
current analyst research reports and a full-searchable archive; access to our
research analysts for discussion, debate and additional advice; and the ability
to participate in customized presentations by our leading analysts.

Our research services are generated by a skilled team of research
professionals, including research analysts and an independent data research
group, as well as additional support staff to handle client inquiries. As of
March 8, 2002, we employed a total of 70 research professionals, including 46
analysts. The knowledge and experience of our research professionals,
particularly our analysts, are the crucial elements in our ability to provide
high-quality, timely and original research. Our analysts have extensive industry
experience and varied backgrounds, coming from a number of different industries,
including management consulting and research firms, financial services,
publishing, entertainment and advertising. We believe that the diverse
backgrounds and experiences of our analysts allow us to provide original and
prescriptive research and analysis which frequently challenges the conventional
wisdom and viewpoints promoted by others.

Our research methodology enables us to deliver compelling, data-driven and
timely analysis across all of our research services. We support our research
professionals with in-house primary research tools and proprietary databases.
Our dedicated data research group delivers innovative survey design, sample
building and data weighing and processing. This group provides each of our
reports with rigorously tested hypotheses

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that yield action-oriented analysis. Our data analysis includes a wide set of
data-gathering tools, including the following:

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

- Primary Consumer Research. We conduct our primary research in alliance
with The NPD Group, Inc., a leading provider of market research. By
accessing an NPD panel of approximately 600,000 online households, we
regularly contact consumer households to assess technology trends. In
addition, we regularly commission research surveys and conduct research
surveys throughout the world.

- Customer Valuation Models. Our analysts construct scenario-driven models
for measuring the lifetime value of interactive consumers. These models
provide our analysts with the necessary information to make
recommendations and assist clients in identifying the ultimate value in
acquiring and retaining visitors and customers.

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

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

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

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

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

ADRELEVANCE PRODUCTS

We offer advertising measurement products and services through our
AdRelevance subsidiary. AdRelevance tracks competitive online advertising and
advertiser data for thirteen broadly defined categories including, but not
limited to, automotive, computer hardware, computer software,
telecommunications, financial services, travel, retailing and Web media. We
currently report on over 750,000 unique advertisements and 50,000 advertisers.

The AdRelevance technology systematically and continuously searches
commercial Web sites and captures detailed data about advertising banners,
promotions, sponsorships, text links and rich media. AdRelevance's intelligent
agent technology searches over 5,000,000 URLs daily and continuously evaluates
more than 500,000 unique web pages to provide in-depth advertising tracking
information. Once captured, the data are warehoused, classified and
statistically analyzed.
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By using the AdRelevance technology, our customers can query the
AdRelevance database and generate Web-based reports on demand. This enables
customers to monitor competitors' marketing activities, plan more effective
online advertising campaigns and evaluate campaigns in real time. Customers can
gain access to up-to-date intelligence about their competitors' online marketing
communications programs, enabling them to quickly and easily compare and report
information by a wide range of criteria including advertiser, product, message,
type, industry, location, technology and creative content.

JUPITER EVENTS

We produce conferences which provide coverage of specific issues relating
to Internet commerce. These conferences offer senior executives the opportunity
to hear first-hand the insights of our analysts and the leading decisionmakers
in the Internet and technology industries. Our events provide us an opportunity
to showcase our research and measurement products to current and potential
clients, increase the public profile of our research analysts, generate
favorable press and otherwise promote the Jupiter Media Metrix brand. Our
conferences attract (i) individual attendees,(ii) sponsors, which display their
logo in our conference program and/or host a reception, and (iii) exhibitors,
which receive a booth to promote their companies.

CUSTOMIZED SERVICES, REPORTS AND ANALYSIS

We leverage our vast database of information on Internet usage and
technology usage to provide clients with a broad range of special measurement
services, reports and analyses, including vertical market reports, site
retention analyses, usage reports, site content reports, personal clickstream
reports, traffic referral reports and site interaction reports. Additionally, we
perform customized, client-focused research projects relating to Internet
commerce on a limited basis. These projects allow our clients to take advantage
of the knowledge and experience of our research analysts and to develop
structured, detailed responses to specific issues relevant to their business.
Custom studies often form the basis to explore a new research service and, like
our individual research reports, are an effective way to expose new companies
and executives to our research products and services.

LIVEMETRIX PRODUCTS

Jupiter Media Metrix provides continuous, in-depth analysis of traffic on a
client's Web site and all page impressions on a real time basis. Our LiveMetrix
products accurately reveal user activity to monitor their location, how they
navigate through the site, and when they engage in transactions. These products
are also capable of monitoring multiple sites within a company. This accurate
site measurement data helps executives make informed and credible decisions
regarding marketing campaigns, infrastructure investments, and technology
upgrades.

Additionally, LiveMetrix' Campaign Analysis product, launched in February
2002, tracks, reports, and analyzes in real-time the performance of Web-based
marketing campaigns, regardless of where the Web campaign is seen.

INTERNATIONAL OPERATIONS

Our international research and measurement services are currently focused
primarily on the European market. Our European research and measurement products
and services are designed to provide both domestic and foreign corporations the
region-specific measurement and analysis required to make global strategic
planning decisions.

We have historically offered our audience measurement products in foreign
countries through joint ventures with leading market research and information
services companies. In Europe, in September 1999, we entered into a joint
venture with GfK A.G., which is based in Germany, and IPSOS S.A., which is based
in France, to form MMXI Europe B.V. In connection with our acquisition of MMXI
Nordic, Observer A.B., which is based in Sweden and was formerly known as SIFO
Group A.B., became a shareholder in MMXI Europe. Under the umbrella of MMXI
Europe, we have formed subsidiaries in each of the United Kingdom, France,
Germany, Italy and Spain.
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As described above, we purchased the Internet audience measurement business
operated by Observer A.B. in Sweden. The new company, MMXI Nordic, which we
wholly own, measures Internet audiences in Sweden. As part of this acquisition,
we also acquired the site-centric measurement business operated by Observer,
known as NetCheck. We have granted MMXI Europe an option to purchase MMXI Nordic
from us at a future time.

During the year ended December 31, 2001, we discontinued operations in a
number of international markets and restructured our international operations.
In July 2001, we decided to discontinue our Internet audience measurement
service in Argentina due to adverse economic conditions in that country. In
October and November 2001, we also announced our decision to discontinue
operations in Japan, Brazil, Denmark and Norway, which operations have all
terminated. In October 2001, IPSOS converted its shares of both MMXI Europe and
JMXI Latin America BV into shares of our common stock. As a result, IPSOS is no
longer a shareholder in MMXI Europe, JMXI Latin America is now our wholly-owned
subsidiary and the joint venture obligations with respect to IPSOS under both
ventures have terminated. In December 2001, we entered into a termination
agreement with our Japanese partner, Intage, formerly called Marketing
Intelligence Corporation, to terminate our Japanese venture. In addition in
December 2001, we purchased, through MMXI Holdings, Inc., the shares of Media
Metrix Canada that are owned by ComQuest Research. As a result, Media Metrix
Canada is now our wholly-owned subsidiary.

We have also entered into a joint venture through MMXI Europe with IHA
Institut fur Marketanalysen, an affiliate of GFK, to form MMXI Switzerland GmbH,
a Swiss company, where, Jupiter Media Metrix, through MMXI Europe, has an
option, which expires December 31, 2003, to purchase up to 15% of the
outstanding equity of MMXI Switzerland from IHA.

Additionally, we have granted an exclusive license to AMR Interactive Pty.
Ltd. to operate the Jupiter Media Metrix business in Australia and New Zealand.

As a result of these ongoing restructuring activities, our products and
services are currently focused on providing comprehensive products and services
for clients operating in North America and the major European markets.

CLIENTS

As of December 31, 2001, we had approximately 1,300 client contracts for
our research and measurement products. Our client base is a diverse group of
large and small companies in the Internet, media, telecommunications,
technology, financial services, consumer products, retail, travel and
professional services industries. Clients who subscribe for our measurement
services typically use the data for planning, buying and selling advertising;
developing e-commerce strategies; understanding consumer behavior; gaining
competitive market intelligence; and analyzing investment decisions. The users
of our research products and services at our client companies hold diverse
positions, demonstrating the importance of Internet commerce to a company's
overall strategy and development. In addition to chief executive officers and
presidents, our users include marketing, business development, operations,
strategic planning and information technology executives.

We typically enter into 12-month or longer subscription contracts with our
clients, some of whom are covered by multi-client master contracts with parent
corporations, to provide standard, syndicated products and services or
customized reports and analyses. No client accounted for more than 2% of our
revenues in 2001.

SALES AND MARKETING

We sell and market our products through a direct sales force, which was
comprised of 60 sales representatives as of March 8, 2002. Our U.S. sales force
operates from our New York, San Francisco and Seattle offices, and we also
maintain local representatives in various locations throughout the United
States. We also have sales representatives in Canada and a number of European
countries where we offer measurement or research products and services. Sales
representatives receive a base salary and are eligible for commissions based on
sales and revenue goals. We support our sales efforts through various types of
marketing

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and brand building activities. We use public relations, user group seminars,
trade shows and speaking engagements to generate publicity for our products and
services.

OPERATIONS AND TECHNOLOGY

We have built our primary data collection, retrieval and processing system
based on systems and software developed by The NPD Group, Inc. Our system has
been designed around industry standard data architectures. Backup procedures are
built into the processing environment in order to reduce downtime in the event
of outages or catastrophic occurrences. Our hardware systems are hosted at our
facility in Melville, New York, our Seattle, Washington facility, and at one
offsite professionally-managed computer center in New York, New York. As of
March 8, 2002, we had 63 employees dedicated to research and development. In
order to remain competitive in the current environment, we anticipate that we
will need to continue to devote significant resources to product development and
the development of delivery technology.

INTELLECTUAL PROPERTY

We regard the protection of our patents, copyrights, service marks,
trademarks and trade secrets as important to each of our business units and
product lines and rely on a combination of patent, copyright, trademark, service
mark and trade secret laws and contractual restrictions to establish and protect
our proprietary rights in the United States and in selected other countries. We
require employees and contractors to enter into confidentiality and invention
assignment agreements and enter into nondisclosure agreements with third parties
with whom we do business in order to limit access to and disclosure of our
proprietary information. We also license proprietary rights such as patents,
trademarks or copyrighted material to strategic partners in the operation of our
international businesses.

We have been issued two patents in the United States with regard to our
meter methodology (U.S. Patent No. 5,675,510 and U.S. Patent No. 6,115,680).
Patents covering the technology covered by U.S. Patent No. 5,675,510 have also
been issued in Australia and Norway. We also have patent applications pending in
the European Patent office and in Brazil, Canada, Japan, Mexico and the United
States. We cannot assure you that we will continue to prosecute these
applications, or, if prosecuted, that such patents will be issued.

We have also applied for a patent in the United States and other foreign
jurisdictions on the methodology for monitoring of remote data access on a
public computer network which comprises the former RelevantKnowledge meter. This
application was rejected by the U.S. Patent and Trademark Office in June 2000.
We are currently challenging this rejection.

In September 2000, we filed a complaint for patent infringement against PC
Data, Inc. The complaint sought money damages from and a permanent injunction
against PC Data. In March 2001, the parties reached a settlement of the
litigation. As part of the settlement, PC Data (1) consented to a finding that
our U.S. Patent No. 6,115,680 is valid and enforceable; (2) consented to a
finding that it has infringed the patent; (3) consented to a permanent
injunction enjoining it from continuing to infringe the patent; and (4)
transferred its rights to the systems and methods used to monitor computer and
online activity, including its @PC Data Tracking Software and related
technologies, to us.

On March 27, 2001, we filed a complaint for patent infringement against
NetRatings, Inc. and NetValue USA, Inc. in Federal district court in the
District of Delaware. The complaint seeks money damages from and a permanent
injunction against NetRatings. Although we originally filed the complaint
against NetValue in addition to NetRatings, we have dismissed NetValue from the
case without prejudice. A trial date has been scheduled by the judge for October
2002.

Our use of the brand name "Media Metrix" in Europe had been challenged by
Mediametrie, S.A., a French company which measures audiences of various media.
Rather than engage in a protracted dispute, we elected to have our European
joint venture conduct business under the name "MMXI Europe." Mediametrie had
also challenged our use of the domain name "mediametrix.com."

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COMPETITION

Each of the markets in which we operate is highly competitive. In the
market for Internet audience measurement products and services, we face
competition from panel-based measurement companies using various recruitment
methodologies, companies that track internet usage through ISP traffic data and
companies that track Internet usage through site-centric and other
consumer-centric measurement systems. Lastly, we may face increased competition
from individual Web sites that develop an independent method of measuring their
own audience and from other companies that develop alternative audience
measurement technologies to those already provided by us or our current
competitors.

In March 1999, NetRatings and Nielsen Media Research introduced a new Web
site ratings service, Nielsen//NetRatings, which competes directly with many
aspects of our audience measurement services. Nielsen Media Research is a
provider of television audience measurement services in the United States and
Canada. In September 1999, NetRatings also entered into the eRatings joint
venture with ACNielsen Corp. to develop and maintain audience measurement panels
and to market Nielsen//NetRatings' products and services in international
markets. ACNielsen is a provider of market research, information and analysis to
consumer products and services industries and is a provider of television
audience measurement services outside the United States and Canada.
Subsequently, VNU B.V., a Dutch media and information company, purchased both
ACNielsen and Nielsen Media Research. We also face competition from NetValue, a
French public company, which provides audience measurement services primarily in
Europe.

In March 2001, DoubleClick Inc. and comScore Networks announced a joint
marketing plan for a new online audience measurement product, NetScore, which
uses data gathered from comScore's large database of traffic information from
its opt-in users. NetScore uses a methodology different than both our
measurement model and the site-centric models. We may face significantly
increased competition from this new service if NetScore is able to take
advantage of the significant financial and marketing resources of DoubleClick or
if NetScore's methodology becomes generally accepted.

ISP traffic measurement services, such as those offered by Compete, Inc.,
measure visits to a specific Web site by monitoring traffic through specific
Internet service providers. Site-centric measurement systems, such as WebTrends
Live, WebSideStory, CoreMetrics and Red Sheriff, measure audience visits at a
specific website by monitoring the Web site's server. Consumer centric systems,
such as Digimine and SPSS's NetGenesis, measure the market either in a manner
similar to us or qualitatively through on-line and telephonic interviews.

In the market for Internet commerce research products and services, our
principal competitor is Forrester Research, Inc. Numerous other companies,
however, compete with us both domestically and internationally in providing
research and analysis related to a specific industry or geographic area. In
addition, we face increased direct and indirect competition from information
technology research firms, business consulting and accounting firms, electronic
and print publishing companies and equity analysts employed by financial
services companies. We also face strong competition in the business of producing
conferences related to Internet commerce. These competitors include publishing
and media companies, research providers, financial services companies and
consulting firms and companies which focus solely on the production of
conferences.

Competition may continue to intensify as a result of industry
consolidation, because of technological advancements in the way to measure
Internet activity or because some of our competitors may be able to provide
additional or complementary services, such as consulting services. Increased
competition may result in reduced operating margins, loss of market share and
diminished value in our services, as well as different pricing, service or
marketing decisions.

Our current and potential competitors include companies that may have
greater financial, information gathering and marketing resources than we have.
This may allow them to devote greater resources than we can to the promotion of
their brand and to the development and sale of their products and services. We
cannot assure you that we will be able to compete successfully against current
and future competitors.

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EMPLOYEES

As of March 8, 2002, we had 397 full-time employees worldwide. None of our
employees are covered by a collective bargaining agreement. We have never
experienced an employment-related work stoppage and consider our employee
relations to be good.

ITEM 2. PROPERTIES

Currently, we lease office space in New York, New York, Melville, New York,
Atlanta, Georgia, San Francisco, California, Seattle, Washington, Toronto,
Canada, London, England, Tokyo, Japan, Stockholm, Sweden and Sydney, Australia.

ITEM 3. LEGAL PROCEEDINGS

On March 27, 2001, we filed a complaint for patent infringement against
NetRatings, Inc. and NetValue USA, Inc. in Federal district court in the
District of Delaware. On January 23, 2002, we dismissed our claims against
NetValue USA without prejudice. The trial has been scheduled by the judge to
commence October 28, 2002 and is expected to last approximately two weeks. Our
complaint seeks money damages from, and a permanent injunction against,
NetRatings.

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

No matters were submitted to a vote of security holders in the fourth
quarter of 2001.

PART II

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

Our common stock has been listed on the NASDAQ National Market since May 7,
1999, the date of our initial public offering. We traded under the symbol "MMXI"
from May 7, 1999 to September 20, 2000, the date of our merger with Jupiter
Communications, Inc. and under the symbol "JMXI" since September 20, 2000. The
following table sets forth the high and low closing sale prices on the NASDAQ
National Market for our common stock for the calendar periods indicated.

As of March 15, 2002, there were 634 holders of record of our common stock.

DIVIDEND POLICY

We have never declared nor paid any cash dividends on our common stock. We
currently anticipate that we will retain any future earnings for the development
and operations of our business. Accordingly, we do not anticipate paying cash
dividends on our capital stock in the foreseeable future.

9

CHANGES IN SECURITIES AND USE OF PROCEEDS

The effective date of our first registration statement, filed on Form S-1
under the Securities Act of 1933 (No. 333-72883) relating to the initial public
offering of our common stock, was May 6, 1999. A total of 3,250,000 shares of
our common stock were sold at a price of $17.00 per share to an underwriting
syndicate led by Donaldson, Lufkin & Jenrette Securities Corporation, BancBoston
Robertson Stephens Inc. and Thomas Weisel Partners LLC. The offering commenced
on May 7, 1999, and closed on May 12, 1999. An additional 200,000 shares of
common stock were sold on behalf of selling stockholders as part of the same
offering. The initial public offering resulted in gross proceeds to us of $55.3
million, $3.9 million of which was applied toward the underwriting discount.
Expenses related to the offering totaled approximately $2.0 million. Net
proceeds to us and the selling stockholders were $49.4 million and $3.2 million,
respectively. From the time of receipt through December 31, 2001, proceeds were
applied as follows:

- $4.8 million towards the redemption of our redeemable preferred stock
from The NPD Group, Inc.;

- $5.7 million for the Internet audience measurement business operated by
Observer AB in Sweden; and

- the remaining $38.9 million was used for working capital purposes.

From October 1, 1999 through December 31, 1999, we issued 697,664 shares of
our common stock to the shareholders of AdRelevance in connection with our
acquisition of AdRelevance in October 1999. On October 8, 2000, we issued an
additional 82,921 shares of common stock and 17,450 options based upon
AdRelevance's achievement of certain post-closing goals in connection with the
acquisition of AdRelevance. No underwriters were engaged in connection with the
issuance of the shares to the AdRelevance shareholders. The issuance of the
shares was made in reliance upon the exemption from registration set forth in
Section 4(2) of the Securities Act of 1933.

In October 1999, we consummated a secondary offering of 3,000,000 shares of
common stock at a price of $50.50 per share. Of the 3,000,000 shares sold,
1,500,000 shares were sold by us and 1,500,000 shares were sold by existing
stockholders. Net proceeds to us were $71,095,000 after deducting the
underwriters' discount and related expenses.

In September 2000, we completed our merger with Jupiter Communications by
issuing 14,921,856 shares of our common stock in exchange for all of the
outstanding common stock of Jupiter Communications. In addition, we assumed all
of the outstanding stock options to purchase common stock of Jupiter
Communications. The total purchase price was $470.1 million, based on the share
price at the time of the announcement of the merger, including merger-related
expenses of approximately $6.9 million.

10

ITEM 6. SELECTED FINANCIAL DATA.

The financial data set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and with the Company's Consolidated Financial Statements and notes
thereto included elsewhere in this Form 10-K. The financial statements for the
year ended December 31, 2000 include the operations of Jupiter Communications,
Inc. from September 20, 2000, the date of our merger.

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

You should read the following discussion of our financial condition and
results of operations with the financial statements and the notes to the
financial statements included elsewhere in this Annual Report on Form 10-K. The
financials for the year ended December 31, 2000 reflect our merger with Jupiter
Communications, Inc. on September 20, 2000. This discussion contains
forward-looking statements, within the meaning of the Private Securities
Litigation Reform Act of 1995, based on our current expectations, assumptions,
estimates and projections. These forward-looking statements involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of certain factors, as more
fully described in the "Risk Factors" section and elsewhere in this Annual
Report on Form 10-K, and in other reports and documents filed from time to time
with the Securities and Exchange Commission. We undertake no obligation to
update publicly any forward-looking statements for any reason, even if new
information becomes available or other events occur in the future.

OVERVIEW

Jupiter Media Metrix is a provider of innovative and comprehensive research
and measurement products and services that analyze the impact of the Internet
and new technologies on commerce and marketing. Our services include Media
Metrix, Jupiter Research, AdRelevance, Jupiter Events and LiveMetrix. Media
Metrix offers clients a broad range of products and services that collect
audience data and measure new media usage on the Internet and other digital
media. Jupiter Research provides clients with strategic analysis and insights,
including industry trends, forecasts and best practices, all backed by
proprietary data. AdRelevance specializes in the automated retrieval and
delivery of online advertising data. Jupiter Events hosts conferences focusing
on the global digital economy. LiveMetrix delivers continuous, in-depth analysis
of traffic on a client's Web site and advertising campaign data.

Our revenues consist of measurement products and services, research
services and events and other revenues. Prior to our merger with Jupiter
Communications, our revenues were derived solely from our measurement products
and services.

Our measurement offerings, which consist of the products and services from
our Media Metrix, AdRelevance and LiveMetrix units, include both syndicated
measurement products and customized measurement products. We sell our syndicated
measurement products on an annual subscription basis. Contracts for our
syndicated measurement products are usually non-cancelable and non-refundable.
During the year ended December 31, 2001, syndicated measurement products
accounted for approximately 98.0% of our measurement revenues, while customized
measurement products and services accounted for approximately 2.0%. For years
ended December 31, 2000 and 1999, syndicated measurement products accounted for
approximately 96.0% and 90.0%, respectively, of our measurement revenues, while
customized measurement products and services accounted for approximately 4.0%
and 10.0%, respectively. We recognize revenues for the syndicated measurement
products and services over the term of the related contract as services are
provided. Revenues

12

for customized measurement products and services are recognized in the period in
which the product or service is delivered.

Our research offerings, which consist of the products and services from our
Jupiter Research unit, are a combination of proprietary written analysis,
supporting data and access to our research analysts. As with our syndicated
measurement products, we have usually sold our Jupiter Research products on an
annual subscription basis. Jupiter Research contracts are generally
non-cancelable and non-refundable. We recognize revenues for our Jupiter
Research products and services over the term of the related contract as services
are provided. For the year ended December 31, 2001, syndicated research products
accounted for 96.5% of our research revenues, while 3.5% was from the sale of
book-length studies and custom research products. For the year ended December
31, 2000, syndicated research products accounted for 92.7% of our research
revenues, while 7.3% was from the sale of book-length studies and custom
research products. Revenues from these services are recognized upon the sale of
the study or completion of the project. We also produce, through our Jupiter
Events unit, conferences and forums which offer senior executives the
opportunity to hear first-hand the insights of our research analysts and the
leading decision makers in the Internet and technology industries. Our Jupiter
Events revenues consist of revenues from (i) individual attendees, (ii)
sponsors, which display their logo in our conference program and/or host a
reception, and (iii) exhibitors, which receive a booth to promote their
companies. Other revenues are derived primarily from the sale of Web
sponsorships, which sponsorships were discontinued during the year ended
December 31, 2001. Revenues attributable to our conferences and other services
are recognized upon the completion of the event and over the term of the Web
sponsorship.

We currently operate internationally primarily in Europe and Canada. During
the year ended December 31 2001, we discontinued operations in a number of
international markets. In July 2001, we decided to discontinue our Internet
audience measurement service in Argentina due to adverse economic conditions in
that country. In October and November 2001, we also announced our decision to
discontinue operations in Japan, Brazil, Denmark and Norway, which operations
have all currently terminated. In addition, we purchased, through MMXI Holdings,
Inc., the shares of Media Metrix Canada that are owned by ComQuest Research. As
a result, Media Metrix Canada is now our wholly-owned subsidiary.

We granted each of our joint venture partners an option, subject to certain
conditions, to exchange such partner's shares in its respective joint venture
entity for shares of our common stock. Currently, only our European joint
venture partners hold such an option. In October 2001, IPSOS converted its
shares of both MMXI Europe and JMXI Latin America into shares of our common
stock. As a result, IPSOS is no longer a shareholder in either MMXI Europe or
JMXI Latin America. If either remaining European partner elects to exercise its
option to convert its shares into shares of our common stock, we will need to
record additional goodwill in an amount equal to the difference between the then
fair market value of our shares of common stock multiplied by the number of
shares issued and the net book value of MMXI Europe attributable to such
partner. The minority interests related to each joint venture, included in our
statement of operations, consist of the loss related to our partners' interests
in our foreign subsidiaries.

Our client base, which totaled approximately 1,300 client contracts at the
end of 2001, is highly diversified and includes companies in the advertising,
financial services, technology and Internet, media, telecommunications, retail,
travel, consumer products and professional service industries.

We have incurred significant losses from operations since our inception. We
incurred losses from operations of $516.4 million (including a $320.0 million
write-down of goodwill) in the fiscal year ended December 31, 2001, $75.5
million in 2000 and $25.9 million in 1999. As of December 31, 2001, we had an
accumulated deficit of $620.6 million.

As a result of continuing unfavorable market conditions in our business
segments and our continuing losses, we are in the process of disposing of
certain of our business units. Our success in disposing of these units and
reducing our losses will be dependent on numerous factors beyond our control.
Unless we are able to dispose of certain of our business units and reduce our
losses, our ability to continue as a going concern is in doubt.

13

CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements and related public financial
information are based on the application accounting principles generally
accepted in the United States ("GAAP"). The preparation of financial statements
under GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities as of the date of the financial statements, and the reported
amounts of revenue and expenses during the periods. We believe our use of
estimates and underlying accounting assumptions adhere to GAAP and are
consistently and conservatively applied. Estimates have been made by management
in several areas, including, but not limited to, accounts receivable allowances,
valuation of long-lived and intangible assets and restructuring reserves. We
have based our estimates on historical experience and on various other
assumptions that we believe to be reasonable under the circumstances and review
valuations based on estimates for reasonableness and conservatism on a
consistent basis. Actual results may differ materially from these estimates
under different assumptions or conditions.

We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements:

Allowances for doubtful accounts. Allowances for doubtful accounts
are estimated based on estimates of losses related to customer receivable
balances. Estimates are developed by using standard quantitative measures
based on historical losses, adjusting for current economic conditions and,
in some cases, evaluating specific customer accounts for risk of loss. The
establishment of reserves requires the use of judgment and assumptions
regarding the potential for losses on receivable balances. Though we
consider these balances adequate and proper, changes in economic conditions
in specific markets in which we operate could have a material effect on
reserve balances required.

Goodwill and Intangible Assets. We have significant goodwill and
intangible assets recorded on our balance sheet that include goodwill and
other intangibles related to acquisitions. The valuation and classification
of these assets and the assignment of useful amortization lives involves
significant judgments and the use of estimates. The testing of these
intangibles under established accounting guidelines for impairment also
requires significant use of judgment and assumptions. Our assets are tested
and reviewed for impairment on an ongoing basis under the established
accounting guidelines. During 2001, we performed an assessment of the
goodwill related to our merger with Jupiter Communications, pursuant to
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." After using an undiscounted cash flow
model of the future cash flows forecasted to be generated from Jupiter
Communications and determining there was an impairment, we used a
discounted cash flow model to determine the size of the impairment. As a
result, we recorded a charge of approximately $320.0 million during the
third quarter of 2001 to reduce goodwill associated with the merger with
Jupiter Communications. The charge was based on the amount by which the
carrying amount of these assets exceeded their fair value.

In June 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 141, "Business
Combinations" ("SFAS 141"), and No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 142"), effective for fiscal years beginning after December
15, 2001. We adopted FASB Statements 141 and 142 effective as of the first
quarter of fiscal 2002 and will apply the new rules on accounting for
goodwill and other intangible assets beginning with the first quarter of
2002. We will perform the first of the required impairment tests of
goodwill and indefinite lived intangible assets as of January 1, 2002 and
expect to recognize an additional impairment loss on goodwill resulting
from the cumulative effect of the change in accounting principles during
the first quarter of 2002. The extent of the additional impairment expected
to be recognized under the new tests has not yet been determined.

Restructuring. During the year ended December 31, 2001, we
established restructuring reserves at a number of operations. These
reserves, for both severance and exit costs, required the use of estimates.
Although we believe that these estimates accurately reflect the costs of
these plans, actual results may be different.

14

RESULTS OF OPERATIONS

The following table sets forth our results of operations expressed as a
percentage of revenues:

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

Revenues. Revenues increased 14.6% to $89.2 million for the year ended
December 31, 2001 from $77.8 million for the year ended December 31, 2000. Sales
of syndicated measurement products and services accounted for approximately
98.0% of measurement revenues for the year ended December 31, 2001 as compared
to 96.0% for the year ended December 31, 2000. Sales of customized measurement
products and services accounted for the remaining measurement revenues in the
years ended December 31, 2001 and 2000. Sales of syndicated research products
and services accounted for approximately 96.5% of research revenues for the year
ended December 31, 2001 as compared to 92.7% for the year ended December 31,
2000. Sales of customized research products and services accounted for the
remaining research revenues in the years ended December 31, 2001 and 2000. The
remaining revenues can be attributed to our events business unit and other
revenues, primarily consisting of Web sponsorships. The increase in total
revenues, which is directly attributable to our merger with Jupiter
Communications, was offset primarily by a decrease in the number of customers
and a decline in the amount of, and price for, our products and services
purchased by our customers.

Cost of Revenues. Cost of revenues consists primarily of costs associated
with the recruitment and maintenance of our panels, data collection, costs
associated with our research analysts, event costs and production costs. Panel
and data collection costs include costs associated with mailing and printing,
incentives,

15

help desk and associated personnel. Production costs include printing, report
distribution costs and personnel costs. Gross profit was $47.6 million for the
year ended December 31, 2001, or 53.4% of revenues. Gross profit was $45.0
million for the year ended December 31, 2000, or 57.9% of revenues. The decrease
in gross profit as a percentage of revenues for the year ended December 31, 2001
over the prior period was due to the inclusion of the Jupiter Communications'
businesses and the costs of our international operations and a decrease in
measurement revenues without a commensurate (or proportionate) decrease in cost
of revenues due to fixed costs.

Research and Development. Research and development costs consist primarily
of personnel and other related costs attributable to the development of new
products and services and associated depreciation. All research and development
costs have been expensed as incurred. Research and development costs were $24.6
million for the year ended December 31, 2001, or 27.6% of revenues. Research and
development costs were $16.1 million for the year ended December 31, 2000, or
20.7% of revenues. The increase in research and development costs in absolute
dollars and as a percentage of revenues for the year ended December 31, 2001 was
due primarily to the inclusion of the research and development costs of the
Jupiter Communications' businesses and increases in research and development
personnel and consulting costs and depreciation.

Sales and Marketing. Sales and marketing costs consist of salaries,
bonuses, commissions, travel and expenses, promotional costs, and other costs
incurred in marketing and selling our products and services. Sales and marketing
costs were $32.0 million for the year ended December 31, 2001, or 35.9% of
revenues. Sales and marketing costs were $29.4 million for the year ended
December 31, 2000, or 37.8% of revenues. The increase in absolute dollars was
due primarily to the additional sales and marketing expense from the addition of
the Jupiter Communications businesses and an increase in training costs in
connection with the integration of our sales personnel following our merger with
Jupiter Communications, offset by reductions of sales and marketing expenses
resulting from the implementation of our restructuring plans. The decrease in
sales and marketing costs as a percentage of revenues was due primarily to
revenues decreasing at a slower rate than our sales and marketing expenditures.

General and Administrative. General and administrative costs consist
primarily of personnel, lease payments for our facilities, telephone and
utilities and professional services fees. General and administrative costs were
$39.0 million for the year ended December 31, 2001, or 43.7% of revenues.
General and administrative costs were $25.9 million for the year ended December
31, 2000, or 33.3% of revenues. The increase in absolute dollars and as a
percentage of revenues was due to the expenses associated with the additional
personnel, lease payments and other costs as a result of our merger with Jupiter
Communications, in addition to the expenses associated with our international
operations and the relocation of our operations center to Melville, New York.

Amortization of Deferred Compensation and Other Stock-based
Compensation. Amortization of deferred compensation and other stock-based
compensation of $5.8 million for the year ended December 31, 2001 represents a
non-cash compensation expense recorded in connection with stock options granted
in 2001, 2000 and 1999, and the acceleration of the vesting provisions of
certain stock options resulting in a new measurement date. Amortization of
deferred compensation and other stock-based compensation of $2.5 million for the
year ended December 31, 2000 includes $1.6 million related to the amortization
of deferred compensation recorded in connection with our merger with Jupiter
Communications. The remaining $900,000 for the year ended December 31, 2000
represents a non-cash compensation expense recorded in connection with stock
options granted in 2001, 2000 and 1999, and the acceleration of the vesting
provisions of certain stock options resulting in a new measurement date.

Amortization and Write-down of Intangibles. Amortization and write-down of
intangibles of $411.3 million for the year ended December 31, 2001 represent the
write-down of intangibles acquired in our merger with Jupiter Communications of
approximately $320.0 million and the amortization of intangibles acquired in our
mergers with Jupiter Communications of $68.5 million and RelevantKnowledge of
$1.4 million, our acquisitions of AdRelevance of $18.6 million and MMXI Nordic
of $2.5 million and our technology license relating to our LiveMetrix service or
$364,000. Amortization charges of $46.6 million for the year ended December 31,
2000 represent the amortization of intangibles acquired in our mergers with
Jupiter

16

Communications of $24.2 million and RelevantKnowledge of $1.8 million, and our
acquisitions of AdRelevance of $18.2 million and MMXI Nordic of $2.4 million.

Restructuring and Other Charges. During the year ended December 31, 2001,
we incurred $51.3 million in restructuring and other charges in connection with
our corporate restructurings and reduction in workforce during the period. Such
restructuring charges include $7.8 million of costs and liabilities associated
with employee terminations, $37.3 million related to lease cancellations and
commitments, including a write-down of leasehold improvements associated
therewith, $3.4 million in cancellation charges in connection with our
cancellation of scheduled events, $1.9 million related to the write-down of
abandoned equipment and $868,000 related to the discontinuation of certain
international operations.

Loss from Operations. Loss from operations was $516.4 million for the year
ended December 31, 2001, or 579.1% of revenues. Our loss from operations was
$75.5 million for the year ended December 31, 2000, or 97.1% of revenues. Loss
from operations in terms of absolute dollars and as a percentage of revenues was
higher in the year ended December 31, 2001 due to primarily to the amortization
and write-down of intangibles, costs associated with the implementation of our
restructuring plans, losses incurred by the businesses acquired in our merger
with Jupiter Communications and the costs of maintaining panels in foreign
countries.

Minority Interests. Minority interests decreased to $1.2 million for the
year ended December 31, 2001 from $6.0 million for the year ended December 31,
2000 principally due to the withdrawal of IPSOS S.A., a partner in our European
and Latin American ventures, the decision of certain of our joint venture
partners to discontinue making capital contributions to our joint venture
subsidiaries, our acquisition of the minority interests of ComQuest Research
Inc. in Media Metrix Canada Co. and the disposition of our majority interest in
Media Metrix Pty Limited to Brian Fine Holdings 2 Pty Limited, an affiliate of
AMR Interactive Pty. Ltd., the holder of the remaining interest in Media Metrix
Pty. Limited. Minority interests consist of the loss related to our partners'
interests in our foreign subsidiaries.

Loss on Sale of Subsidiary. During the year ended December 31, 2001, we
recorded a loss of $664,000 in connection with the disposition of our interests
in Jupiter Communications Australia Pty Limited and our majority interest in
Media Metrix Pty Limited to Brian Fine Holdings 2 Pty Limited.

Loss on Write-Off of Investments. During the year ended December 31, 2001,
we recorded a loss of $5.5 million in connection with the write-off of two
investments of Jupiter Communications. Such write-offs include a loss of $2.0
million on Jupiter Communications' investment in Powerful Media, Inc. and a loss
of $3.5 million on Jupiter Communications' investment in Strategic Intelligence
Pte. Limited, a Singapore corporation.

Interest Income, net. Interest and other income, net of interest expense,
was $2.1 million, or 2.4% of revenues, for the year ended December 31, 2001 as
compared to $6.2 million, or 8.0% of revenues, for the year ended December 31,
2000. The decrease in interest income was due to a decrease in our overall cash
and cash equivalents and a decrease in the interest rates for investments.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

Revenues. Revenues increased 279.4% to $77.8 million for the year ended
December 31, 2000 from $20.5 million for the year ended December 31, 1999. Of
that increase, $25.9 million relates to revenues from Jupiter Communications for
the period following the closing of the merger on September 20, 2000. Of the
$25.9 million, $17.2 million can be attributed to Jupiter research services and
the balance of $8.7 million to events and other revenues. Sales of syndicated
measurement products and services accounted for approximately 96% of measurement
revenues for the year ended December 31, 2000 as compared to 90% for the year
ended December 31, 1999. Sales of customized measurement products and services
accounted for the remaining measurement revenues in the year ended December 31,
2000. Sales of syndicated research products and services accounted for
approximately 92.7% of research revenues for the year ended December 31, 2000.
Sales from our events and customized research products and services accounted
for the remaining research revenues in the year ended December 31, 2000. In
addition to revenues attributable to Jupiter Communica-

17

tions, the increase in revenues was due primarily to a substantial increase in
the number of customers, including new customers as a result of international
growth, and an increase in the amount of products and services sold to our
customers.

Cost of Revenues. Gross profit was $45.0 million for the year ended
December 31, 2000, or 57.9% of revenues. Gross profit was $10.2 million for the
year ended December 31, 1999, or 49.8% of revenues. The increase in gross profit
as a percentage of revenues for the year ended December 31, 2000 over the prior
period was due to an increase in revenues partially offset by costs related to
recruiting panels and other start-up costs in connection with our international
operations. Jupiter Communications contributed $14.1 million in gross profit for
the period following the closing of the merger.

Research and Development. Research and development costs were $16.1
million for the year ended December 31, 2000, or 20.7% of revenues. Research and
development costs were $5.0 million for the year ended December 31, 1999, or
24.6% of revenues. The increase in research and development costs in absolute
dollars for the year ended December 31, 2000 was due primarily to increases in
research and development personnel and consulting costs, including certain costs
relating to our new meter and client interface systems which were introduced in
the second quarter of 2000.

Sales and Marketing. Sales and marketing costs were $29.4 million for the
year ended December 31, 2000, or 37.8% of revenues. Sales and marketing costs
were $9.1 million for the year ended December 31, 1999, or 44.5% of revenues.
The increase in absolute dollars was due primarily to the increase in sales and
marketing personnel, both in the United States and abroad, as well as additional
marketing costs. The inclusion of Jupiter Communications for the period
following the merger resulted in an additional $7.3 million in sales and
marketing costs.

General and Administrative. General and administrative costs were $25.9
million for the year ended December 31, 2000, or 33.3% of revenues. General and
administrative costs were $6.8 million for the year ended December 31, 1999, or
33.0% of revenues. The increase in absolute dollars was due to the expenses
associated with our international expansion and increased personnel and
expansion of our office facilities. The inclusion of Jupiter Communications for
the period following the merger resulted in an additional $9.3 million in
general and administrative costs.

Amortization of Deferred Compensation and Other Stock-based
Compensation. Amortization of deferred compensation and other stock-based
compensation of $2.5 million for the year ended December 31, 2000 includes $1.6
million related to the amortization of deferred compensation recorded in
connection with our merger with Jupiter Communications. The remaining $900,000
for the year ended December 31, 2000 and $1.1 million for the year ended
December 31, 1999 represents a non-cash compensation expense recorded in
connection with stock options granted in 2000, 1999 and 1998, and the
acceleration of the vesting provisions of certain stock options resulting in a
new measurement date.

Amortization of Intangibles. Amortization charges of $46.6 million for the
year ended December 31, 2000 represent the amortization of intangibles acquired
in our mergers with Jupiter Communications of $24.2 million and
RelevantKnowledge of $1.8 million, and our acquisitions of AdRelevance of $18.2
million and MMXI Nordic of $2.4 million. Amortization charges of $7.3 million
for the year ended December 31, 1999 represent the amortization of
RelevantKnowledge's panel and amortization of other intangibles acquired in our
merger with RelevantKnowledge, as well as amortization of intangibles acquired
in our acquisition of AdRelevance.

Acquired In-Process Research and Development. In connection with the
acquisition of AdRelevance, we expensed $6.8 million of acquired in-process
research and development for the year ended December 31, 1999. Acquired
in-process research and development represents the value attributed to the
technologies in development at the time of the acquisition.

Loss from Operations. Loss from operations was $75.5 million for the year
ended December 31, 2000, or 97.1% of revenues. Our loss from operations was
$25.9 million for the year ended December 31, 1999, or 126.2% of revenues. Loss
from operations in terms of absolute dollars was higher in the year ended
December 31, 2000 due to the continued expansion of our business in the United
States and internationally
18

and the amortization of intangibles. The increase in loss from operations as a
percentage of revenues was due to an increase in amortization of intangibles
from the AdRelevance and MMXI Nordic acquisitions and our merger with Jupiter
Communications, offset by an increase in revenues relative to increases in costs
of revenue and operating costs. We expect these losses to continue as our
business continues to expand both in the United States and internationally.

Minority Interests. Minority interests increased from $1.7 million for the
year ended December 31, 1999 to $6.0 million for the year ended December 31,
2000 because of expansion of international operations in which we have partners
with minority interests. Minority interests consist of the loss related to our
partners' interests in our foreign subsidiaries.

Interest Income, net. Interest income, net of interest expense, was $6.2
million, or 8.0% of revenues, for the year ended December 31, 2000 as compared
to $2.3 million, or 11.1% of revenues, for the year ended December 31, 1999. The
increase in interest income was due to the investment of the proceeds of our
initial and secondary public offerings, as well as cash and cash equivalents
acquired in the Jupiter Communications merger.

QUARTERLY RESULTS OF OPERATIONS

Our revenues increased in each period through the quarter ended December
31, 2000 as a result of the expansion of our customer base, the sale of
additional products and services to our existing customers, the release of new
products and services during such periods and our acquisition of Jupiter
Communications. Our revenues have declined in each period since the quarter
ended December 31, 2000 as a result of a decrease in the number of customers and
a decline in the amount of, and price for, our products and services purchased
by our customers. The quarterly results also reflect our merger with Jupiter
Communications in September 2000 and, therefore, are not comparable to prior
periods. Our results of operations may fluctuate significantly in the future as
a result of a variety of factors, many of which are beyond our control.

The following is a summary of our unaudited quarterly results of operations
for the years ended December 31, 2001 and 2000. You should read these quarterly
data in conjunction with our audited financial statements. You should not view
the results of operations for any period as an indication of the results of
operations for any future period.

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

* Includes $320.0 million write-down of goodwill related to our merger with
Jupiter Communications.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have financed our operations primarily through an
initial investment and loan by NPD, the private placement of equity securities,
Jupiter Communications' and RelevantKnowledge's cash on hand at the time of the
respective mergers, cash from operations and the proceeds of public offerings.
On May 12, 1999, we completed the initial public offering of 3,250,000 shares of
our common stock for gross proceeds of $55.3 million, and net proceeds of $49.4
million. On October 29, 1999, we completed a secondary offering of 3,000,000
shares of our common stock. Of the shares offered, Jupiter Media Metrix sold
1,500,000 shares and 1,500,000 shares were sold by existing stockholders. Gross
proceeds to Jupiter Media Metrix were $75.8 million, and net proceeds to Jupiter
Media Metrix were $71.1 million.

Net cash used in operating activities was $61.8 million for the year ended
December 31, 2001, $30.8 million for the year ended December 31, 2000 and $6.0
million for the year ended December 31, 1999. For the years ended December 31,
2001, 2000 and 1999, net cash used in operating activities was substantially
impacted by our investment in international expansion. The increase for 2001
compared to 2000 was primarily due to a higher net loss for the year, due to
increased costs for domestic operations and international expansion, including
losses attributable to the businesses acquired in connection with our merger
with Jupiter Communications.

Net cash provided by (used in) investing activities was $(628,000) for the
year ended December 31, 2001, $2.3 million for the year ended December 31, 2000
and $(19.4) million for the year ended December 31, 1999. For the year ended
December 31, 2001, cash used in investing activities principally relates to
additions of property, plant and equipment of $11.1 million, the payment of an
acquisition earn-out obligation of $4.9 million, the purchase of an exclusive
technology license of $1.0 million and security deposits and restricted cash of
$700,000, offset by the sale of marketable securities of $17.1 million. Cash
used for security deposits and restricted cash for the years ended December 31,
2001, 2000 and 1999 were $(701,000), $(1.8) million and $(191,000),
respectively. For the year ended December 31, 2000, cash provided by investing
activities primarily relates to cash received from the merger with Jupiter
Communications, net of merger related expenses, and cash paid for the MMXI
Nordic acquisition of $27.2 million. This was offset by the purchase of
property, plant and equipment of $20.0 million and purchases of marketable
securities of $3.1 million and $1.8 million for security deposits and restricted
cash. For the year ended December 31, 1999, cash used in investing activities
was primarily attributed to the purchase of investment securities with the
proceeds from our public offerings of common stock pending the use of these
proceeds for working capital purposes along with the purchase of property, plant
and equipment.

Net cash provided by financing activities was $3.4 million for the year
ended December 31, 2001, $5.3 million for the year ended December 31, 2000 and
$114.8 million for the year ended December 31, 1999. Cash provided by financing
activities for the year ended December 31, 2001 was due to contributions
received from minority interests of $3.7 million and to the proceeds received
from the exercise of stock options of

20

$407,000, offset by the repayment of long-term debt of $711,000. Cash provided
by financing activities for the year ended December 31, 2000 was due to
contributions from minority interests of $5.1 million and proceeds received from
the exercise of stock options of $873,000, offset by repayment of long-term debt
of $657,000. Financing activities for the year ended December 31, 1999 resulted
from the receipt of $120.5 million from proceeds of our public offerings, plus
$1.3 million in proceeds received from the exercise of warrants and stock
options, offset by the redemption of our redeemable preferred stock for $4.8
million and repayment of long-term debt of $2.3 million.

During the year ended December 31, 2001, Jupiter Media Metrix recorded
restructuring and other charges of $51.3 million. Of the total restructuring and
other charges recorded, $9.9 million was paid, and $12.9 million of property,
plant and equipment and other current assets were written-off, leaving an
accrual of $28.5 million at December 31, 2001, of which $20.3 million is related
to severance and lease payments due after one year and is included in long-term
liabilities. Of the $28.5 million accrual remaining at December 31, 2001, $8.1
million is expected to be paid out in 2002, $2.2 million in 2003, $1.4 million
in 2004, $1.5 million in 2005, $1.4 million in 2006 and the remaining $13.9
million from 2007 to 2015.

We lease office space in the United States and other countries. At December
31, 2001, our future minimum lease payments under non-cancelable operating
leases with initial or remaining lease terms in excess of one year are $9.7
million for 2002, $9.8 million for 2003, $9.3 million for 2004, $9.0 million for
2005, $6.5 million for 2006 and $57.0 million thereafter. Future minimum lease
payments have not been reduced by future minimum sublease rentals of $12.3
million under operating leases. Rent expense approximated $7,000,000, $3,000,000
and $861,000 for the years ended December 31, 2001, 2000 and 1999, respectively.

As of December 31, 2001, we had $14.9 million of cash and cash equivalents
and $1.0 million of marketable securities. As of February 28, 2002, we had $7.5
million of cash and cash equivalents and $1.4 million of marketable securities.
In addition, at December 31, 2001 and at February 28, 2002, we held
approximately $6.8 million of cash in accounts collateralizing letters of credit
issued in lieu of security deposits under our real estate leases. We currently
anticipate that operating expenses will continue to be a material use of our
cash resources.

We have incurred net losses of $519.2 million, $63.3 million and $21.9
million for the years ended December 31, 2001, 2000 and 1999, respectively. In
addition, we also had a working capital deficiency of $7.9 million at December
31, 2001. These factors raise substantial doubt about our ability to continue as
a going concern. We anticipate that our existing cash and cash equivalents and
short-term investments will be sufficient to meet our anticipated cash needs for
working capital and capital expenditures only through the middle of the second
quarter of 2002, although there can be no assurance in this regard. In response
to these losses, working capital deficiency and the termination of our proposed
merger with NetRatings, Inc., we have retained a financial advisor to explore
strategic alternatives for us, which include the sale of one or more business
units, a debt or equity financing or the sale of the entire company. If we fail
to sell certain business units, or otherwise obtain additional debt or equity
financing (which may not be available on acceptable terms, or at all), we will
not have sufficient capital to meet our future needs through 2002. If adequate
funds are not available when required or on acceptable terms, we may be forced
to cease our operations, and even if we are able to continue our operations, our
business and financial results may suffer. The accompanying financial statements
do not reflect any adjustments that might result if we were unable to continue
as a going concern.

RISK FACTORS

OUR AUDITORS HAVE ISSUED A "GOING CONCERN" AUDIT OPINION.

The auditor's report on our consolidated financial statements for the
fiscal year ended December 31, 2001 states that because of operating losses and
a working capital deficiency, there is substantial doubt about our ability to
continue as a going concern. A "going concern" opinion indicates that the
financial statements have been prepared assuming we will continue as a going
concern and do not include any adjustments to reflect the possible future
effects on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the outcome of this
uncertainty.

21

OUR AVAILABLE CASH MAY NOT BE SUFFICIENT TO MEET ANTICIPATED CASH NEEDS FOR
WORKING CAPITAL AND CAPITAL EXPENDITURES.

We anticipate that our existing cash and cash equivalents and short-term
investments will be sufficient to meet our anticipated cash needs for working
capital and capital expenditures only through the middle of the second quarter
of 2002, although there can be no assurance in this regard. In response to these
losses, working capital deficiency and the termination of our proposed merger
with NetRatings, Inc., we have retained a financial advisor to explore strategic
alternatives for us, which include the sale of one or more business units, a
debt or equity financing or the sale of the entire company. If we fail to sell
certain business units, or otherwise obtain additional debt or equity financing
(which may not be available on acceptable terms, or at all), we will not have
sufficient capital to meet our future needs through 2002. If adequate funds are
not available when required or on acceptable terms, we may be forced to cease
our operations, and even if we are able to continue our operations, our business
and financial results may suffer. The accompanying financial statements do not
reflect any adjustments that might result if we were unable to continue as a
going concern. In addition, potential investors in our securities should
consider the risk that, even if we are successful in completing one or more
strategic transactions, our common stock may continue to decline in value.

OUR COMMON STOCK WILL LIKELY BE DELISTED.

Since the announcement of the termination of our merger agreement with
NetRatings, our common stock price has declined significantly and has remained
below $1.00. On March 28, 2002, we received a notice from Nasdaq that our common
stock has failed to maintain the required minimum bid price of $1.00 over a
period of 30 consecutive trading days. Pursuant to Nasdaq Marketplace Rule
4450(e)(2), we will be provided 90 calendar days, or until June 26, 2002, to
regain compliance with the minimum bid price requirement, or Nasdaq may provide
written notification that our common stock is subject to a delisting. Under
Nasdaq rules, we have the right to appeal any staff delisting determination to
the Nasdaq Listing Qualifications Panel. We believe it is unlikely that we will
be able to regain compliance with this requirement during this time period and
that, by the end of this time period, our securities will be delisted from
trading by Nasdaq. In that event, trading in shares of our common stock will
decrease substantially or may cease altogether, and the market price of our
common stock is likely to decline further.

AS A RESULT OF QUESTIONS CONCERNING OUR STATUS AS A GOING CONCERN, OUR
CUSTOMERS MAY DECIDE NOT TO DO BUSINESS WITH US.

Our business and financial results are dependent on our ability to attract
and retain subscribers to our measurement and research products. Our
subscription renewal rates for our online measurement and research products have
declined significantly in the last year. Due to concerns regarding our ability
to continue operations, our subscription renewal rates may continue to decline
as our customers may decide not to conduct business with us, or may conduct
business with us on terms that are less favorable than those customarily
extended by them. In that event, our net sales would further decrease, and our
business will suffer significantly.

WE MAY NOT BE ABLE TO RETAIN EXISTING PERSONNEL.

During 2001, we initiated a series of staff reduction programs as part of
an extensive cost containment initiative. Our workforce reductions, the
volatility in our stock price and our recent announcement of the termination of
our proposed merger with NetRatings may create anxiety and uncertainty, which
may adversely affect employee morale and cause us to lose employees whom we
would prefer to retain. To the extent that we are unable to retain our existing
personnel, our business and financial results may suffer.

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

We incurred net losses of approximately $519.2 million in the fiscal year
ended December 31, 2001, which includes amortization and write-down of
intangibles of $411.3 million. Jupiter Media Metrix also incurred net losses of
approximately $63.3 million and $21.9 million in the fiscal years ended December
31,

22

2000 and 1999, respectively, which include amortization of intangibles of $46.6
million and $7.3 million, respectively.

We will need to achieve significant revenue increases in order for us to
achieve and maintain profitability. Our revenues have declined significantly in
the past year, and we may not be able to continue to effectively operate our
business unless we increase our revenues. In the year ended December 31, 2001,
our client contract base has diminished from approximately 2,300 to 1,300. The
number of clients or the number of products and services for which our clients
subscribe may continue to decrease in the future.

OUR OPERATING RESULTS MAY FLUCTUATE FROM QUARTER TO QUARTER.

Our revenues, expenses and operating results have varied from quarter to
quarter. Our operating results may continue to vary as a result of a variety of
factors, many of which are beyond our control. These factors include, among
others:

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

- the announcement or introduction of new products and services by us or
our competitors;

- price competition;

- changes in the market environment of Internet companies;

- the amount and timing of costs relating to changes in the size or
composition of our panels;

- the amount and timing of operating costs and capital expenditures
relating to our business; and

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

Due to all the foregoing factors and the other risks described in this
section, you should not rely on quarter-to-quarter comparisons of our results of
operations as an indication of future performance.

OUR EXISTING AND POTENTIAL CUSTOMERS HAVE, AND MAY CONTINUE TO EXPERIENCE
ADVERSE BUSINESS CONDITIONS THAT HAVE ADVERSELY IMPACTED OUR AND THEIR
BUSINESSES.

General economic conditions, and conditions in the Internet sector in
particular, have caused many of our existing customers to experience difficulty
in supporting their current operations and implementing their business plans.
Existing customers may reduce their spending on our products and services, or
may not be able to discharge their payment and other obligations to us.
Potential customers may be more reluctant to subscribe to our products and
services. The non-payment of amounts due to us from a significant number of
customers would negatively impact our financial condition.

The overall market for Internet advertising has been characterized in
recent quarters by reduced demand, the reduction or cancellation of contracts,
an increased risk of uncollectible receivables from advertisers, and the
reduction of Internet advertising budgets, especially by technology-related
companies. Our customers that are technology-related companies may experience
difficulty raising capital, or may be anticipating such difficulties, and
therefore may elect to scale back the resources they devote to advertising or
research, diminishing the need for our products and services. Our focus on
Internet audience measurement, analysis, intelligence and events may cause us to
be disproportionately affected by the slowdown in this sector of the economy.
Other companies in the Internet industry have depleted their available capital,
and could cease operations or file for bankruptcy protection. If the current
environment for Internet advertising does not improve, our business, results of
operations and financial condition would be materially adversely affected.

WE DEPEND ON INCREASED SALES OF, AND HIGH RENEWAL RATES FOR, OUR
SUBSCRIPTION-BASED PRODUCTS AND SERVICES.

Our business and financial results are dependent on our ability to attract
and retain subscribers to our online measurement and research products. In
addition, our business model assumes that we will be able to increase the level
of sales over time to our existing clients. In the past, we experienced high
renewal rates for our online measurement and research products but these rates
have declined significantly in recent months.

23

Our subscription renewal rates have declined significantly in the past year as a
result of a consolidation in our customer base, a decrease in discretionary
spending by our customers or a significant number of our customers ceasing
operations. Our sales to new or existing customers could also decline as a
result of our inability to continue to deliver high-quality and timely research
analysis to our clients, our failure to anticipate and understand market trends
or our inability to develop and update products and services to meet the
changing technological demands of our clients. If our renewal rate percentage
continues to decline or if sales decline, our business, results of operations
and financial condition could be materially adversely affected.

THE INTERNET AUDIENCE MEASUREMENT INDUSTRY IS SUBJECT TO RAPID CHANGE AND
EVOLVING INDUSTRY STANDARDS.

To date, no Internet audience measurement service has been adopted as the
universally accepted standard. As a result, some of our existing and potential
customers may challenge or refuse to accept our audience measurement reports.
Our customers may also be dissatisfied with our methodology for measuring
Internet audiences or may feel that our panels are not representative of
Internet users. Furthermore, it is possible that another Internet audience
measurement service could be adopted as the industry standard. Our products and
services may ultimately not comply with recommended industry guidelines if we
determine that compliance would not be economically feasible or otherwise not
consistent with our business strategy. To the extent that our measurement
approach diverges from the industry standard, our business, results of
operations and financial condition could be materially and adversely affected.

In addition to the lack of a universally accepted standard, the audience
measurement business is characterized by rapidly changing technology, numerous
competitive products and services and shifting customer demands and needs. As a
result, our future success in this field depends on our ability to adapt to
rapidly changing technologies, including the tracking of Internet usage through
new technologies, and to improve the features, reliability and timeliness of our
product and service offerings in response to competitive product and service
offerings. In addition, the widespread adoption of new Internet networking
technologies could require us to expend substantial amounts of capital to change
our services or technology infrastructure, thereby increasing the costs of
operating our business. We cannot assure you that we will be able to continue to
offer Internet audience measurement services that satisfy all the information
needs of our existing and potential clients.

OUR RESEARCH AND EVENTS BUSINESSES MAY SUFFER IF WE ARE UNABLE TO ANTICIPATE
MARKET TRENDS OR IF WE FAIL TO PROVIDE INFORMATION THAT IS USEFUL TO OUR
CLIENTS.

The success of our research and events businesses depends in large part on
our ability to anticipate, research and analyze rapidly changing technologies
and industries, as well as our ability to provide this information in a timely
and cost-effective manner. Internet commerce is relatively new and is undergoing
frequent and dramatic changes, including the introduction of new products and
the obsolescence of others, shifting business strategies and revenue models,
consolidation of businesses and the entry of new companies. Because of these
rapid and continuous changes in the Internet commerce markets, we face
significant challenges in providing timely analysis and advice. Many of the
industries and areas on which we focus are relatively new, and it is very
difficult to provide predictions and projections as to the future marketplace,
revenue models and competitive factors. If our predictions or projections prove
to be wrong, or if we are unable to continually update our information, our
reputation may suffer and demand for our research products and services may
decline. In addition, many companies have not embraced the use of the Internet
as a medium for commerce and are unclear as to how to allocate corporate
resources effectively. As a result, some companies may conclude that our
research products are not useful to their businesses. If we are unable to
continue to provide credible and reliable information that is useful to
companies engaged in Internet commerce, or to provide this information in a
timely manner, our business and financial results will suffer.

OUR BUSINESS MAY SUFFER IF ONLINE ADVERTISING DOES NOT GROW.

Our AdRelevance unit specializes in the automated retrieval and delivery of
online advertising data. In addition, many of our research and measurement
products and events are focused on the growth and effectiveness of online
advertising. As a result, our future success will depend in part on an increase
in the use
24

of the Internet as an advertising medium. The Internet advertising market,
however, is relatively new and rapidly evolving, and there is significant
uncertainty about the demand and market acceptance for Internet advertising.
Many of our current or potential customers have little or no experience using
the Internet for advertising purposes. The adoption of Internet advertising,
particularly by entities that have historically relied on traditional media for
advertising, requires the acceptance of a new way of conducting business. These
companies may find Internet advertising to be less effective for promoting their
products and services as compared to traditional advertising. In addition, most
current and potential Web publisher customers have little or no experience in
generating revenues from the sale of advertising space on their Web sites. In
recent quarters, the overall market for Internet advertising has been
characterized by increasing softness of demand, the reduction or cancellation of
contracts and the reduction of Internet advertising budgets. We cannot assure
you that the market for Internet advertising will grow. If the market for
Internet advertising does not grow or grows more slowly than we expect, then our
business, results of operations and financial condition could be materially and
adversely affected.

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

Our future success depends on the continued global growth of the Internet
as a viable commercial medium. However, the continued growth of the Internet as
a widely-used medium for commerce and communication is uncertain, and this
growth may be inhibited for a number of reasons, including:

- inadequate network infrastructure;

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

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

- unwillingness of companies to invest in the Internet or other evolving
technologies;

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

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

- lack of availability of cost-effective, high-speed service.

THE MARKETS IN WHICH WE OPERATE ARE HIGHLY COMPETITIVE.

Each of the markets in which we operate is highly competitive. In the
market for Internet audience measurement products and services, we face
competition from companies that track Internet usage through panel-based
measurement using various recruitment methodologies, companies that track
internet usage through ISP traffic data and companies that track Internet usage
through site-centric and other consumer-centric measurement systems. Lastly, we
may face increased competition from individual Web sites that develop an
independent method of measuring their own audience and from other companies that
develop alternative audience measurement technologies to those already provided
by us or our current competitors.

In March 1999, NetRatings and Nielsen Media Research introduced a new Web
site ratings service, Nielsen//NetRatings, which competes directly with many
aspects of our audience measurement services. Nielsen Media Research is a
provider of television audience measurement services in the United States and
Canada. In September 1999, NetRatings also entered into the eRatings joint
venture with ACNielsen Corp. to develop and maintain audience measurement panels
and to market Nielsen//NetRatings' products and services in international
markets. ACNielsen is a provider of market research, information and analysis to
consumer products and services industries and is a provider of television
audience measurement services outside the United States and Canada.
Subsequently, VNU B.V., a Dutch media and information company, purchased both
ACNielsen and Nielsen Media Research. We also face competition from NetValue, a
French public company, which provides audience measurement services primarily in
Europe.
25

In March 2001, DoubleClick Inc. and comScore Networks announced a joint
marketing plan for a new online audience measurement product, NetScore, which
uses data gathered from comScore's large database of traffic information from
its opt-in users. NetScore uses a methodology different than both our
measurement model and the site-centric models. We may face significantly
increased competition from this new service if NetScore is able to take
advantage of the significant financial and marketing resources of DoubleClick or
if NetScore's methodology becomes generally accepted.

ISP traffic measurement services, such as those offered by Compete, Inc.,
measure visits to a specific Web site by monitoring traffic through specific
Internet service providers. Site-centric measurement systems, such as WebTrends
Live, WebSideStory, CoreMetrics and Red Sheriff, measure audience visits at a
specific website by monitoring the Web site's server. Consumer centric systems,
such as Digimine and SPSS's NetGenesis, measure the market either in a manner
similar to us or qualitatively through on-line and telephonic interviews.

In the market for Internet commerce-related research products and services,
our principal competitor is Forrester Research, Inc. Numerous other companies
compete with us both domestically and internationally in providing research and
analysis related to a specific industry or geographic area. In addition, we face
increased direct and indirect competition from information technology research
firms, business consulting and accounting firms, electronic and print publishing
companies and equity analysts employed by financial services companies. We also
face strong competition in the business of producing conferences related to
Internet commerce. These competitors include publishing and media companies,
research providers, financial services companies and consulting firms and
companies which focus solely on the production of conferences.

Competition may continue to intensify as a result of industry
consolidation, because of technological advancements in the way to measure
Internet activity or because some of our competitors may be able to provide
additional or complementary services, such as consulting services. Increased
competition may result in reduced operating margins, loss of market share and
diminished value in our services, as well as different pricing, service or
marketing decisions.

Our current and potential competitors include companies that may have
greater financial, information gathering and marketing resources than we have.
This may allow them to devote greater resources than we can to the promotion of
their brand and to the development and sale of their products and services. We
cannot assure you that we will be able to compete successfully against current
and future competitors.

OUR BUSINESS MAY SUFFER IF WE DO NOT EXPERIENCE INCREASED DEMAND FOR OUR
MEASUREMENT SERVICES AND RESEARCH PRODUCTS IN INTERNATIONAL MARKETS.

We currently sell our international measurement services and research
products primarily in Europe and Canada. Our success in international markets,
however, is dependent on a variety of factors including, but not limited to, the
overall demand for Internet measurement and research products in specific
countries and inherent risks in operating in foreign jurisdictions.

The international markets for audience measurement services have
historically been extremely localized and difficult to penetrate. As a result,
the costs of establishing and maintaining panels in foreign countries have been
and will continue to be substantial. We cannot assure you that we will be able
to develop new products and services based on data obtained in those markets or
that there will be sufficient client demand for these measurement products. In
addition, we cannot assure you that there will be sufficient demand for our
research products in some of the international markets in which we promote such
products. If the costs of operating a panel in a foreign country prove to be
uneconomical, or if we experience insufficient demand for our products in a
specific country, we may decide to discontinue a panel or to close down our
operations in a specific country. In July 2001, we decided to discontinue our
Internet audience measurement service in Argentina due to adverse economic
conditions in that country. In October and November 2001, we decided to
discontinue our Internet audience measurement services in Brazil, Denmark and
Norway, and to discontinue our research and measurement operations in Japan.

26

In addition, our international operations are subject to a number of
inherent risks, including:

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

- changes in regulatory requirements;

- reduced protection for intellectual property rights in some countries;

- potentially adverse tax consequences;

- economic and political instability; and

- fluctuations in currency exchange rates.

These risks may have a material adverse effect on our business, results of
operations or financial condition.

WE MAY NOT BE ABLE TO PROTECT AND ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS.

We regard the protection of our patents, copyrights, service marks,
trademarks and trade secrets as important to our future success. We rely on a
combination of patent, copyright, trademark, service mark and trade secret laws
and contractual restrictions to establish and protect our proprietary rights. We
cannot assure you, however, that the steps we have taken will be sufficient to
protect our intellectual property from infringement or misappropriation.
Moreover, effective intellectual property protections may not be available in
every country in which we offer our products and services to the extent these
protections are available in the United States.

We seek to obtain the issuance of patents for our technology, and the
registration of our material trademarks and service marks, in the United States
and in selected other countries. We cannot assure you, however, that all of our
pending or future patent or trademark applications and registrations will be
issued or granted, or that our patents and trademarks will be upheld as valid if
they are subjected to a challenge. On March 27, 2001, we filed a complaint for
patent infringement against NetRatings, Inc. and NetValue USA, Inc. in federal
district court in the District of Delaware. Our complaint seeks money damages
from and a permanent injunction against NetRatings. Although the complaint was
originally also filed against NetValue, NetValue has been dismissed from the
case without prejudice, by us, and the trial has been scheduled by the judge for
October 2002. We cannot assure you, however, that we will prevail in this
litigation or that the trial will not be postponed beyond October 2002.

Other parties may assert claims against us that we have misappropriated a
trade secret or infringed a patent, copyright, trademark or other proprietary
right belonging to them. Our use of the brand name "Media Metrix" in Europe had
been challenged by Mediametrie, S.A., a French company which measures audiences
of various media. Rather than engage in a protracted dispute, we elected to have
our European joint venture conduct business under the name "MMXI Europe".
Mediametrie had also challenged our use of the domain name "mediametrix.com".

Any infringement or related claims, even if not meritorious, could be
costly and time consuming to litigate, may distract management from other tasks
of operating the business and may result in the loss of significant rights or
the ability to operate parts of our business.

WE MAY NOT BE SUCCESSFUL IN EFFECTIVELY PROMOTING OUR BRAND NAMES.

We believe that maintaining and strengthening our brands is an important
aspect of our business. Our brand names, including "Jupiter Media Metrix",
"Media Metrix", "Jupiter" and "AdRelevance", are critical in our efforts to
attract clients and attendees to our conferences. We believe that the importance
of brand recognition will increase due to the increasing number of competitors
entering the market for Internet

27

audience measurement and research services. Our ability to promote and position
our brands depends largely on:

- the success of our marketing efforts;

- our ability to provide our customers with high quality products; and

- our ability to secure rights to our brand names in the major markets in
which we will be active.

As described above, our use of the brand name "Media Metrix" in Europe had
been challenged by Mediametrie, S.A., a French company that measures audiences
of various media. We cannot assure you that we will not have any future disputes
with Mediametrie, or any other companies, with respect to the use of any of our
brand names.

If we fail to promote and maintain our brands, or incur excessive expenses
attempting to promote and maintain our brand, our business, results of
operations and financial condition will be materially adversely affected.

DISRUPTION OF OUR WEBSITES OR SERVICES DUE TO SECURITY BREACHES AND SYSTEM
FAILURES COULD HARM OUR BUSINESS AND RESULT IN CLIENT CANCELLATIONS.

The success of each of our businesses depends on the efficient and
uninterrupted operation of our computer and communications systems. Our
measurement services depend on systems that accurately track and monitor
Internet usage and activity and the unimpeded processing of large quantities of
data. In addition, many research services clients pay us so that their employees
can read our research solely on our Web sites and many of our research products
are being increasingly delivered via the Web. Furthermore, the operation of our
business is heavily dependent on systems and networks that connect offices
spread around the world. Our infrastructure and the infrastructure of our
service providers, however, are vulnerable to security breaches, computer
viruses or similar disruptive problems. These systems are also subject to
telecommunications failures, power loss and various other system failures. Any
failure of our current or future systems or networks, whether intentional or
accidental, could impede the processing of data, the delivery of our products
and services, the operation of our Web sites and the day-to-day management of
our business. As a result, these failures could cause some of our clients to
discontinue purchasing some of our products and services, prevent clients from
purchasing our products and services or attending our events and harm our
business reputation.

In addition, as we continue to grow and offer additional products and
services around the world, we will need to expand our systems to accommodate
increased data and service additional employees. This could lead to systems
failure or to a corruption of our data and could have a material adverse effect
on our business, results of operations and financial condition.

WE RELY ON TECHNOLOGY LICENSED FROM OTHERS.

We rely on technologies that we license from third parties. We cannot
assure you that these licenses will not infringe on the proprietary rights of
others. Moreover, these third-party technology licenses may not continue to be
available to us on commercially reasonable terms, if at all. As a result, we may
need to substitute technology of lower quality or performance standards or at
greater cost.

WE MAY BE EXPOSED TO POSSIBLE LIABILITY FOR INFORMATION THAT WE PUBLISH OR
DISSEMINATE, AS WELL AS FOR SUPPLYING INACCURATE INFORMATION TO OUR CLIENTS.

As a publisher and distributor of original research, market projections and
measurement reports, we face potential liability based on a variety of theories,
including defamation, negligence, copyright or trademark infringement, and other
legal theories based on the publication or distribution of this information.
Claims of this kind, whether brought in the United States or abroad, would
likely divert management time and attention and could result in significant cost
to investigate and defend, regardless of the merit of any of these claims. The
filing of any such claims may also damage our reputation as a high-quality
provider of unbiased, timely analysis and result in client cancellations or
overall decreased demand for our products and services. In

28

addition, if we become subject to these types of claims and are not successful
in our defense, we may be forced to pay substantial damages. Our insurance may
not adequately protect us against these claims.

We may also face liability for information that we supply to customers if
the information is inaccurate. The information in our databases, like that in
any database, may contain inaccuracies that our customers may not accept. Any
dissatisfaction by our customers with our measurement or research methodologies
or databases could have a material adverse effect on our ability to attract new
customers and retain existing customers. Any liabilities that we may incur
because of irregularities or inaccuracies in the data we supply to our customers
could materially adversely affect our business, results of operations and
financial condition.

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

Our conference business depends on our ability to attract attendees,
sponsors and exhibitors to our events. We cannot assure you that we will be able
to select topics for our conferences that potential attendees, sponsors and
exhibitors will find timely and interesting. We also cannot assure you that our
competitors will not produce conferences on similar topics or that we will
continue to be able to attract prominent industry leaders to participate in our
conferences. If we are unable to produce compelling events, our conference
business will be harmed. In the year ended December 31, 2001, we have had to
cancel a number of scheduled conferences and the interest in our conferences may
continue to diminish as companies continue to decrease spending that they deem
discretionary.

WE FACE RISKS RELATED TO THE STORAGE OF PERSONAL INFORMATION ABOUT OUR
PANELISTS.

We do not attempt to capture information regarding our panelists' banking,
credit card or password data. This information, however, may come into our
possession. Our panel data are released only in an aggregated format or in a
form not identifiable on an individual basis. However, if someone penetrates our
network security or otherwise misappropriates sensitive data about our
panelists, we could be subject to liability. These liabilities could include
claims for unauthorized purchases with credit card information, impersonation or
other similar fraud claims. They could also include claims for other misuses of
personal information, such as unauthorized marketing purposes. These claims
could result in litigation and could have a material adverse effect on our
business, results of operations and financial condition.

WE FACE RISKS ASSOCIATED WITH POTENTIAL GOVERNMENTAL REGULATION.

Laws and regulations regarding Internet usage and commerce in the United
States and abroad could decrease the acceptance of the Internet as a commercial
medium and result in decreased demand for our products and services. However,
due to the increasing popularity of the Internet, governmental bodies both in
the United States and abroad are becoming more focused on adopting and proposing
legislation specifically related to the Internet, covering issues such as user
privacy, content restrictions, taxation, advertising, intellectual property
matters and information security. The nature and effect of any recently adopted
or proposed legislation or regulation cannot be fully determined. Any new
legislation or regulation could have a material adverse effect on our business,
results of operations and financial condition.

Several states have proposed legislation that would limit the uses of
personal user information gathered using the Internet. These regulations have
required proprietary on-line service and Web site owners to establish privacy
policies. The Federal Trade Commission has also settled a proceeding with one
on-line service regarding the manner in which personal information is collected
from users and provided to third parties. The European Union and Canada have
enacted their own privacy regulations that result in limits on the collection
and use of user information. Our compliance with these privacy laws and their
various regulatory requirements could materially affect our operations. Changes
to existing laws or the passage of new laws could, among other things:

- create uncertainty in the marketplace that could reduce demand for our
products and services;

- limit our ability to collect and to use data from our panels;

- increase the cost of doing business as a result of litigation costs or
increased service delivery costs;
29

- decrease the efficacy of Internet advertising or impede AdRelevance from
gathering data for our advertising tracking services; or

- in some other manner have a material adverse effect on our business,
results of operations and financial condition.

OUR EXECUTIVE OFFICERS AND DIRECTORS HAVE SUBSTANTIAL CONTROL OVER OUR
AFFAIRS.

Our officers and directors and entities affiliated with them in the
aggregate, beneficially owned approximately 22.4% of our common stock as of
March 15, 2002. In particular, Tod Johnson, our Chairman, together with The NPD
Group, Inc., which is controlled by Mr. Johnson, owned approximately 14.7% of
our outstanding common stock as of March 15, 2002.

These stockholders acting together have the ability to exert substantial
influence over all matters requiring approval by our stockholders. These matters
include the election and removal of directors and any merger, consolidation or
sale of all or substantially all of our assets. This concentration of ownership
could have the effect of delaying, deferring or preventing a change in control,
or impeding a merger or consolidation, takeover or other business combination.

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

Our common stock, which is quoted on the Nasdaq National Market, has
experienced significant price and volume fluctuations. These fluctuations are
highly likely to continue in the future. The market prices of the securities of
Internet-related companies have been especially volatile. Some companies that
have had volatile market prices for their securities have been subject to
securities class action suits filed against them. If a suit were to be filed
against us, regardless of the outcome, it could result in substantial costs and
a diversion of our management's attention and resources. This could have a
material adverse effect on our business, results of operations and financial
condition.

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

Provisions of our certificate of incorporation, our bylaws and Delaware law
could make us more difficult for a third party to acquire us, even if doing so
might be beneficial to our stockholders. In addition, we recently adopted a
stockholder rights plan and declared a dividend distribution of one right for
each outstanding share of common stock to stockholders of record as of June 1,
2001. Each right entitles the holder to purchase one one-thousandth of a share
of our Series A Preferred Stock at an exercise price of $13.00, subject to
adjustment. Under certain circumstances, if a person or group acquires 15% or
more of the outstanding common stock (or 20% in the case of acquisitions by Tod
Johnson or The NPD Group, Inc.), holders of the rights (other than the person or
group triggering their exercises) will be able to purchase, in exchange for the
$13.00 exercise price, shares of our common stock or of any company into which
we are merged having a value of $26.00. Because the rights may substantially
dilute the stock ownership of a person or group attempting to take us over
without the approval of our board of directors, our stockholder rights plan
could make it difficult for a third party to acquire us, or a significant
portion of our outstanding stock, without first negotiating with our board of
directors regarding such acquisition.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The carrying values of financial instruments including cash and cash
equivalents, accounts receivable, accounts payable and notes payable,
approximate fair value because of the short maturity of these instruments. The
fair value of the long-term restructuring payments was approximately $4.2
million less than the recorded value at December 31, 2001.

We have historically had very low exposure to changes in foreign currency
exchange rates, therefore we have not used derivative financial instruments to
manage foreign currency fluctuation risk. We conduct business internationally
through our international subsidiaries. To the extent we continue to operate
globally, the risk of foreign currency exchange rate fluctuation may increase.
Therefore, in the future, we may consider

30

utilizing derivative instruments to mitigate such risks. Currently, we manage
our level of exposure by denominating international sales and payment of related
expense in the foreign subsidiaries' local currency.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The information required by this item is incorporated by reference to the
consolidated financial statements listed in Item 14(a) of Part IV of this Form
10-K.

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

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information regarding directors and executive officers required by Item
10 is incorporated by reference from our definitive proxy statement to be filed
in connection with our 2002 annual stockholders' meeting.

ITEM 11. EXECUTIVE COMPENSATION.

The information required by Item 11 is incorporated by reference from our
definitive proxy statement to be filed in connection with our 2002 annual
stockholders' meeting.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information required by Item 12 is incorporated by reference from our
definitive proxy statement to be filed in connection with our 2002 annual
stockholders' meeting.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information required by Item 13 is incorporated by reference from our
definitive proxy statement to be filed in connection with our 2002 annual
stockholders' meeting.

PART IV

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

(A) LIST OF DOCUMENTS FILED AS A PART OF THIS ANNUAL REPORT

(1) INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Auditors.............................. F-1
Consolidated Balance Sheets at December 31, 2001 and 2000... F-2
Consolidated Statements of Operations for the years ended
December 31, 2001, 2000 and 1999.......................... F-3
Consolidated Statements of Stockholders' Equity for the
years ended December 31, 2001, 2000 and 1999.............. F-4
Consolidated Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999.......................... F-6
Notes to Consolidated Financial Statements.................. F-7

(2) INDEX TO FINANCIAL STATEMENT SCHEDULES
Schedule II -- Valuation and Qualifying Accounts............ S-1

31

All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and therefore have
been omitted.

(B) REPORTS ON FORM 8-K

During the three months ended December 31, 2001, the registrant filed two
Current Reports on Form 8-K, on October 30, 2001 relating to the proposed merger
with NetRatings, Inc., and on December 10, 2001 relating to the Federal Trade
Commission's request for additional information in connection with its review of
the proposed merger with NetRatings.

On January 22, 2002, the registrant filed a Current Report on Form 8-K
relating to an amendment to the merger agreement executed in connection with the
proposed merger with NetRatings to permit the continued prosecution of the
registrant's patent litigation against NetRatings.

On February 20, 2002, the registrant filed two Current Reports on Form 8-K
relating to the termination of the proposed merger with NetRatings and the
retention by the registrant of a financial advisor to explore strategic and
financing alternatives.

(C) EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K

The Exhibits required to be filed as part of this Annual Report on Form
10-K are listed on the Exhibit Index beginning on page 33. Exhibits 10.22,
10.23, 10.24, 10.25, 10.26, 10.27 and 10.28 are the management contracts and
compensatory plans or arrangements required to be filed as part of this Annual
Report on Form 10-K.

32

LIST OF EXHIBITS

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

35

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.

JUPITER MEDIA METRIX, INC.

By: /s/ ROBERT BECKER
-----------------------------------
Name: Robert Becker
Title:Chief Executive Officer

Date: March 29, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, the
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 29, 2002.

/s/ TOD JOHNSON Chairman
- --------------------------------------------------------
Tod Johnson

/s/ GENE DEROSE Vice Chairman
- --------------------------------------------------------
Gene DeRose

/s/ ROBERT BECKER Director and Chief Executive Officer
- -------------------------------------------------------- (Principal Executive Officer)
Robert Becker

/s/ KURT ABRAHAMSON Director and President, Jupiter Research
- --------------------------------------------------------
Kurt Abrahamson

/s/ JEAN ROBINSON Chief Financial Officer
- -------------------------------------------------------- (Principal Financial and Accounting
Jean Robinson Officer)

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

/s/ STIG KRY Director
- --------------------------------------------------------
Stig Kry

/s/ JAMES MORTENSEN Director
- --------------------------------------------------------
James Mortensen

/s/ ANDREW PARSONS Director
- --------------------------------------------------------
Andrew Parsons

/s/ RANDY PAUSCH Director
- --------------------------------------------------------
Randy Pausch

36

REPORT OF INDEPENDENT AUDITORS

Stockholders and Board of Directors
Jupiter Media Metrix, Inc.

We have audited the accompanying consolidated balance sheets of Jupiter
Media Metrix, Inc. and subsidiaries as of December 31, 2001 and 2000, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 2001. Our
audits also included the financial statement schedule listed in the Index at
Item 14(a). These financial statements and schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Jupiter Media Metrix, Inc. and subsidiaries at December 31, 2001 and 2000, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, the
Company's recurring losses from operations and working capital deficiency raise
substantial doubt about its ability to continue as a going concern. Management's
plans as to these matters are also described in Note 1. The 2001 consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

/s/ ERNST & YOUNG LLP
Ernst & Young LLP

New York, New York
February 20, 2002

F-1

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

See accompanying notes.

F-2

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

See accompanying notes.

F-3

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

F-4

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY -- (CONTINUED)

See accompanying notes.

F-5

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

See accompanying notes.

F-6

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

Jupiter Media Metrix is a provider of innovative and comprehensive research
and measurement products and services that analyze the impact of the Internet
and new technologies on commerce and marketing. Its services include Media
Metrix, Jupiter Research, AdRelevance, Jupiter Events and LiveMetrix. Media
Metrix offers clients a broad range of products and services that collect
audience data and measure new media usage on the Internet and other digital
media. Jupiter Research provides clients with strategic analysis and insights,
including industry trends, forecasts and best practices, all backed by
proprietary data. AdRelevance specializes in the automated retrieval and
delivery of online advertising data. Jupiter Events hosts conferences focusing
on the global digital economy. LiveMetrix delivers continuous, in-depth analysis
of traffic on a client's Web site and advertising campaign data.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
Jupiter Media Metrix, Inc., its wholly owned subsidiaries Jupiter
Communications, Inc., AdRelevance, Inc., MMXI Holdings, Inc., Media Metrix
Leasing LLC, Media Metrix Canada Co., RelevantKnowledge Stockholm A.B., MMXI
Nordic A.B., JMXI Latin America B.V. and Media Metrix Brasil Ltda., its 72%
owned subsidiary Jupiter Media Metrix Japan KK, and its 72.1% owned subsidiary
MMXI Europe, B.V. Jupiter Communications, in turn, is consolidated with its
wholly owned subsidiaries, IRG Acquisition Corp., Net Market Makers and Jupiter
Communications Scandinavia A.B. MMXI Europe, B.V., in turn, is consolidated with
its wholly owned subsidiaries, MMXI UK Limited, MMXI France E.U.R.L., MMXI
(Deutschland) GmbH, MMXI Italia SRL and MMXI Espana. MMXI Nordic A.B. is, in
turn, consolidated with its wholly owned subsidiaries, RelevantKnowledge Sweden
A.B. and NetCheck A.B. All significant intercompany accounts and transactions
have been eliminated.

GOING CONCERN ADJUSTMENTS

Jupiter Media Metrix has incurred net losses of $519.2 million, $63.3
million and $21.9 million for the years ended December 31, 2001, 2000 and 1999,
respectively. In addition, Jupiter Media Metrix also has a working capital
deficiency of $7.9 million at December 31, 2001. These factors raise substantial
doubt about its ability to continue as a going concern. Jupiter Media Metrix
anticipates that its existing cash and cash equivalents and short-term
investments will be sufficient to meet its anticipated cash needs for working
capital and capital expenditures only through the middle of the second quarter
of 2002, although there can be no assurance in this regard. In response to these
losses, working capital deficiency and the termination of its proposed merger
with NetRatings, Inc. (see Note 18), Jupiter Media Metrix has retained a
financial advisor to explore strategic alternatives, which include the sale of
one or more business units, a debt or equity financing or the sale of the entire
company. If Jupiter Media Metrix fails to sell certain business units, or
otherwise obtain additional debt or equity financing (which may not be available
on acceptable terms, or at all), Jupiter Media Metrix will not have sufficient
capital to meet its future needs through 2002. If adequate funds are not
available when required or on acceptable terms, Jupiter Media Metrix may be
forced to cease its operations, and even if it is able to continue its
operations, Jupiter Media Metrix' business and financial results may suffer. The
accompanying consolidated financial statements do not reflect any adjustments
that might result if Jupiter Media Metrix was unable to continue as a going
concern.

ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the consolidated financial

F-7

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

statements and accompanying notes. Actual results could differ from those
estimates. Significant estimates made by management relate to the allowance for
doubtful accounts and impairment of long-lived assets.

REVENUE RECOGNITION

Revenues from measurement services primarily include syndicated (recurring)
products and services, customized (non-recurring) products and services and site
centric measurement products and services. Syndicated products and services are
sold on a subscription basis. Revenues for such products and services are
recognized over the term of the related contract as products or services are
provided. Buyers of syndicated products and services generally are billed in
advance for up to the next twelve months. Revenues for customized products and
services are recognized in the period in which the products or services are
provided. Site centric products and services are generally sold in banks of page
impressions at agreed upon prices per thousand page impressions. Revenues for
such site centric products and services are recognized as the bank is depleted
during the period. Billings rendered in advance of products or services being
provided are recorded as "advance billings to clients" in the accompanying
consolidated balance sheet.

Revenues from research services are deferred and then recognized
proportionally in operations over the term of the service period, which is
generally up to one year. Unearned amounts are recorded as "advance billings to
clients" in the accompanying consolidated balance sheet.

Events and other revenues are reflected in operations in the period in
which the event occurs or the other services are provided.

COSTS OF REVENUES

Costs of revenues consist primarily of panel costs, research analyst costs,
including payroll and travel related to research services, license and
technology support fees and direct costs incurred for the conferences. Costs of
establishing and maintaining a panel (a group of consumers who furnish marketing
data) are expensed in the year incurred.

COMMISSION EXPENSE

Commissions with the right of charge back are deferred upon the signing of
the contract and amortized to commission expense over the contract period in
which the related revenues are earned and amortized to income. Commission
expense is included within sales and marketing expenses in the accompanying
consolidated statements of operations.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs primarily consist of costs attributable to
the development of new products and are expensed as incurred.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of highly liquid investments with a maturity date
of three months or less when purchased. Substantially all cash and cash
equivalents are held with four financial institutions at December 31, 2001 and
2000. Jupiter Media Metrix' cash is exposed to risk to the extent the balance of
the cash accounts exceeds federally insured limits.

At December 31, 2001 and 2000, Jupiter Media Metrix had approximately $6.6
million and $5.7 million, respectively, of restricted cash which is classified
as a long-term asset. The restricted cash represents amounts collateralizing
letters of credit issued in lieu of cash security deposits.

F-8

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MARKETABLE SECURITIES

Jupiter Media Metrix accounts for its investments in accordance with
Statement of Financial Accounting Standard No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." All investments have been classified
as available-for-sale securities as of December 31, 2001 and 2000.
Available-for-sale securities are stated at fair value, with the unrealized
gains and losses reported in accumulated other comprehensive income (loss).
Realized gains and losses and declines other-than-temporary on
available-for-sale securities are included in interest and other income. The
cost of securities sold is based on the specific identification method. Interest
and dividends on securities classified as available-for-sale are included in
interest and other income.

CONCENTRATIONS OF CREDIT RISK

Jupiter Media Metrix' policy is to review a customer's financial condition
prior to extending credit and, generally, collateral is not required. Credit
losses are provided for in the financial statements and have been within
management's expectations. No customer accounted for greater than 10% of our
revenues in 2001, 2000 or 1999.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and depreciated or amortized
using the straight-line method over their estimated useful lives which range
from three to five years. Leasehold improvements are amortized over the shorter
of their estimated useful lives or the remaining term of the related lease.

Jupiter Media Metrix capitalizes internal-use software costs in accordance
with Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use." These costs are amortized using the
straight-line method over the estimated useful lives, which is generally three
years and are classified as property and equipment (see Note 5). At December 31,
2001 and 2000, internal-use software costs were approximately $13,160,000 and
$9,991,000, respectively. Amortization of capitalized internal-use software
costs totaled approximately $3,702,000 and $956,000 for the years ended December
31, 2001 and 2000, respectively. There was no amortization of capitalized
internal-use software costs recorded for the year ended December 31, 1999.

INTANGIBLE ASSETS

Jupiter Media Metrix amortizes intangibles, primarily consisting of
goodwill resulting from acquisitions, using the straight-line method over one to
ten years from the date of acquisition (see Notes 1, Recent Accounting
Pronouncements, and 3).

LONG-LIVED ASSETS

Jupiter Media Metrix' method under current accounting rules for measuring
goodwill impairment is an undiscounted cash flow basis. Jupiter Media Metrix
periodically reviews the carrying values of intangibles and other long-lived
assets for recoverability or whenever events or changes in circumstances
indicate that such amounts have been impaired. Impairment indicators include
among other conditions, cash flow deficits, an historic or anticipated decline
in revenue or operating profit and a material decrease in the fair value of some
or all of the assets. If such an impairment exists, the carrying value of the
asset is reduced to its estimated fair value based on discounted cash flows.

During the year ended December 31, 2001, based on the presence of certain
impairment indicators, including a continuing historic and anticipated decline
in revenues associated with the assets acquired in Jupiter Media Metrix' merger
with Jupiter Communications and a material decrease in the fair value of such
assets, Jupiter Media Metrix wrote off approximately $320.0 million of goodwill
acquired in connection with

F-9

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

merger with Jupiter Communications by reducing the carrying value of such assets
to their estimated fair value based on expected discounted cash flows.

INCOME TAXES

Jupiter Media Metrix accounts for income taxes under the provisions of
Statement of Financial Accounting Standard No. 109 ("SFAS 109"), "Accounting for
Income Taxes." In accordance with SFAS 109, deferred tax assets and liabilities
are recognized for future tax consequences attributable to differences between
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash and cash equivalents, accounts receivable,
accounts payable, accrued expenses and advanced billings to clients approximate
fair value because of the relatively short maturity of these instruments. The
fair value of the long-term restructuring payments was approximately $4.2
million less than the recorded value at December 31, 2001.

STOCK-BASED COMPENSATION

Jupiter Media Metrix accounts for its stock-based employee compensation
agreements in accordance with the provisions of Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" and complies with the
disclosure provisions of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock Based Compensation" ("SFAS 123").

FOREIGN CURRENCY TRANSLATION

Local currencies are generally considered to be the functional currency for
operations outside the United States. The translation from the applicable
foreign currencies to U.S. dollars is performed for balance sheet accounts using
current exchange rates in effect at the balance sheet date and for revenue and
expenses accounts using a weighted average exchange rate during the year. The
resulting translation adjustments are reported in accumulated other
comprehensive income (loss). Gains or losses resulting from foreign currency
transactions, which have not been material, are included in other income.

COMPREHENSIVE INCOME (LOSS)

Jupiter Media Metrix computes comprehensive income (loss) in accordance
with the provisions Statement of Financial Accounting Standards No. 130 ("SFAS
130"), "Reporting Comprehensive Income. "As required by SFAS 130, Jupiter Media
Metrix displays the accumulated balance of other comprehensive income or loss
separately in the equity section of the consolidated balance sheets. Total
comprehensive loss, which is comprised of net loss and accumulated other
comprehensive income (loss), amounted to approximately $(518,966,000) for the
year ended December 31, 2001, approximately $(63,333,000) for the year ended
December 31, 2000 and approximately $(21,990,000) for the year ended December
31, 1999. As of December 31, 2001, accumulated other comprehensive loss
consisted of approximately a $9,000 loss and a $141,000 gain for the change in
unrealized loss on securities and foreign currency translations, respectively.
As of December 31, 2000, accumulated other comprehensive loss consisted of
approximately a $13,000 gain and a $108,000 loss for the change in unrealized
gain on securities and foreign currency translations, respectively.

F-10

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, "Business Combinations" ("SFAS 141"),
and No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), effective for
fiscal years beginning after December 15, 2001. Under the new rules, goodwill
and intangible assets deemed to have indefinite lives will no longer be
amortized but will be subject to annual impairment tests in accordance with the
Statements. Other intangible assets will continue to be amortized over their
useful lives.

Jupiter Media Metrix has adopted FASB Statements 141 and 142 effective as
of January 1, 2002. Jupiter Media Metrix will perform the first of the required
impairment tests of goodwill and indefinite lived intangible assets as of
January 1, 2002 and expects to recognize an additional impairment loss on
goodwill resulting from the cumulative effect of the change in accounting
principles during the first quarter of 2002. The extent of the additional
impairment expected to be recognized under the new tests has not yet been
determined.

In October 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal for Long-Lived Assets" ("SFAS 144"). This statement supersedes
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
SFAS 144 provides a single accounting model for long-lived assets to be disposed
of. Companies are required to adopt SFAS 144 in the first fiscal year beginning
after December 15, 2001. Adoption of SFAS 144 is not currently expected to have
a material impact on our results of operations.

2. BASIC AND DILUTED NET LOSS PER SHARE

Jupiter Media Metrix computes net loss per share in accordance with the
provisions of Statement of Financial Accounting Standards No. 128, "Earnings per
Share" ("SFAS 128") and SEC Staff Accounting Bulletin No. 98 ("SAB 98"). Under
the provisions of SFAS 128 and SAB 98, basic and diluted net loss per share is
computed by dividing the net loss available to common stockholders for the
period by the weighted average number of common shares outstanding for the
period. The calculation of diluted net loss per share excludes shares of common
stock issuable upon exercise of employee stock options and warrants (see Note
11), as the effect of such exercises would be antidilutive.

The following sets forth the computation of basic and diluted net loss per
share:

3. ACQUISITIONS

Effective January 1, 2000, Jupiter Media Metrix acquired the internet
audience measurement business operated by SIFO Group A.B., now known as Observer
A.B. ("Observer"), in Sweden. The new company,

F-11

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MMXI Nordic, is a wholly owned subsidiary of Jupiter Media Metrix. Jupiter Media
Metrix acquired all of the outstanding shares of MMXI Nordic in exchange for
$5,692,000 and 52,000 shares of Jupiter Media Metrix' common stock. In
connection with this acquisition, Observer purchased 8.0% of MMXI Europe,
reducing Jupiter Media Metrix' ownership to 50.1% as of the effective date of
the transaction. The 1999 operations of the business acquired from Observer were
not significant.

On September 20, 2000, the Company completed a merger (the "Merger") with
Jupiter Communications, Inc. ("Jupiter Communications") by issuing 14,921,856
shares of Jupiter Media Metrix' common stock in exchange for all of the
outstanding common stock of Jupiter Communications. In addition, Jupiter Media
Metrix assumed all the outstanding stock options to purchase common stock of
Jupiter Communications. The total purchase price of $470.1 million, including
merger related costs and expenses of $6.9 million, was tentatively allocated to
the net assets acquired of $77.9 million, including cash of $44.2 million
(including $4.8 million of restricted cash), and goodwill and other intangibles
of $392.2 million (see Note 6). In addition, deferred compensation of $14.6
million, which represents the intrinsic value of unvested Jupiter Communications
options, was recorded. In connection with the closing of the Merger, the company
changed its name from Media Metrix, Inc. to Jupiter Media Metrix, Inc.

In connection with Jupiter Communications' acquisition of Net Market
Makers, Inc. in April 2000, additional consideration was payable based on the
achievement of certain post-closing goals. Jupiter Media Metrix recorded
additional goodwill of approximately $4.9 million ($4.0 million at December 31,
2000) related to Net Market Makers having achieved these post-closing goals.

On October 8, 1999, Jupiter Media Metrix acquired all the outstanding
shares of preferred and common stock of AdRelevance and outstanding options and
warrants to purchase shares of AdRelevance common stock in exchange for 697,664
shares of Jupiter Media Metrix common stock and 222,164 options and warrants to
purchase shares of Jupiter Media Metrix common stock valued at approximately
$59.4 million. The purchase price was allocated as follows: (i) net operating
assets acquired of $1,434,000, including cash of $1,320,000, (ii) acquired
in-process research and development of $6,800,000, (iii) debt of $2,339,000, and
intangibles of $54,324,000, including related costs and expenses of
approximately $819,000. Acquired in-process research and development represents
the value attributed to eight technologies in development using the discounted
value (using a 32% discount rate) of the expected cash flow streams attributed
to those items. Adjustments were made to the expected cash flow streams to
incorporate obsolescence of the technologies, the risk of similar technologies
emerging in the marketplace, and other factors that may reduce the value
realized from the in-process technologies. The technologies relate to tracking
non-banner advertising (valued at $4,911,000), reporting advertising in certain
sections of advertising (valued at $555,000), reporting and comparing
advertising activity among different industries (valued at $551,000), reporting
details of advertising activities of Web media networks (valued at $443,000) and
four other technologies to help enhance tracking, recognition, analysis and/or
reporting of advertising (valued at $340,000). As of the acquisition date, the
aforementioned technologies were 20% to 64% complete and were completed in 2000.

On October 8, 2000, Jupiter Media Metrix issued an additional 82,921 shares
of common stock and 17,450 options to purchase shares of Jupiter Media Metrix
common stock valued at approximately $995,000 based upon AdRelevance's
achievement of certain post-closing goals in connection with the acquisition of
AdRelevance. This amount has been recorded as additional goodwill.

The estimates used by Jupiter Media Metrix in valuing in-process research
and development were based on assumptions management believes to be reasonable
but which are inherently uncertain and unpredictable. Jupiter Media Metrix'
assumptions may be incomplete or inaccurate, and no assurance can be given that
unanticipated events and circumstances will not occur. Accordingly, actual
results may vary from projected results.

F-12

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The above referenced mergers and acquisitions were accounted for using the
purchase method of accounting and the operations of Jupiter Communications, MMXI
Nordic and AdRelevance have been included in the accompanying consolidated
financial statements from the respective dates of the mergers or acquisitions.

The following table reflects unaudited pro forma results of operations of
Jupiter Media Metrix and Jupiter Communications on the basis that the merger had
taken place on January 1, 1999 and January 1, 2000, and AdRelevance on the basis
that the acquisition had taken place on January 1, 1999:

In management's opinion, the unaudited pro forma results of operations are
not indicative of the actual results that would have occurred had the
AdRelevance acquisition been consummated on January 1, 1999, and the merger with
Jupiter Communications on January 1, 1999 or on January 1, 2000, or of future
operations of the combined companies under the management of Jupiter Media
Metrix.

4. MARKETABLE SECURITIES

Marketable securities consist of the following:

There were no material realized gains or losses from sales of securities
during the years ended December 31, 2001 and 2000.

F-13

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

6. INTANGIBLES

Intangibles consist of the following:

In July 2001, Jupiter Media Metrix purchased an exclusive, perpetual
technology license for $3.0 million in cash, of which $1.0 million has been paid
as of December 31, 2001. In addition, in connection with the purchase of the
license, Jupiter Media Metrix issued 1,750,000 options to purchase shares of
common stock at an exercise price of $5.00 per share. The options have been
valued at $1,365,000 using the Black-Scholes option pricing model. The value of
the license has been recorded as an intangible asset, and the useful life of the
license was determined to be three years. The options were issued in two
tranches; 875,000 options which vest over three years beginning July 13, 2002
and the remaining 875,000 options which vest over three years beginning July 13,
2003. The options expire on July 13, 2008.

During the year ended December 31, 2001, based on the presence of certain
impairment indicators, including a continuing historic and anticipated decline
in revenues associated with the assets acquired in Jupiter Media Metrix' merger
with Jupiter Communications and a material decrease in the fair value of such
assets, Jupiter Media Metrix wrote off approximately $320.0 million of goodwill
acquired in connection with the merger with Jupiter Communications by reducing
the carrying value of such assets to their estimated fair value based on
expected discounted cash flows.

F-14

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following:

8. RELATED PARTY TRANSACTIONS

Effective April 1, 1996 and as amended on September 30, 1998 and October
25, 2001, The NPD Group, Inc. ("NPD"), the company which founded Jupiter Media
Metrix and a major stockholder, and Jupiter Media Metrix entered into a
management services agreement whereby NPD provides, among other services,
Jupiter Media Metrix with computer processing capacity and certain
administrative functions. In October 2001, the parties deleted the
non-competition provision of the agreement and entered into separate non-
competition agreements with NPD and Mr. Tod Johnson, its Chairman and the
Chairman and Chief Executive Officer of NPD. During the term of the agreement,
Jupiter Media Metrix has also agreed to provide NPD with a reciprocal license
relating to data and documentation which it generates during the performance of
the services relating to Jupiter Media Metrix' business. As compensation for the
services, Jupiter Media Metrix pays NPD, on a monthly basis, an amount equal to
(a) all expenses reasonably incurred by NPD in performance of its duties under
this agreement and (b) 105% of NPD's overhead allocable to Media Metrix, as
defined. The agreement may be terminated by either party upon 90 days notice,
provided NPD may not terminate prior to March 31, 2002. Such charges pursuant to
this agreement during the years ended December 31, 2001, 2000, and 1999 amounted
to approximately $2,178,000, $5,401,000, and $2,703,000, respectively. At
December 31, 2001, 2000, and 1999, Jupiter Media Metrix owed approximately
$185,000, $579,000 and $444,000, respectively, to NPD for such services. Such
amounts are non-interest bearing.

Jupiter Media Metrix has entered into a Services Agreement with NPD as of
September 30, 1998, as amended as of October 25, 2001, and has granted NPD
access to its databases for any business purpose of NPD that is not in direct
competition with that of Jupiter Media Metrix. Jupiter Media Metrix also has
granted NPD a non-exclusive license to use certain computer software owned by
it. Under the terms of the Services Agreement, Jupiter Media Metrix receives a
monthly fee of $2,500 plus expenses. The Services Agreement is terminable by
either party with 120 days notice.

Jupiter Media Metrix has entered into a license agreement with NPD dated as
of November 5, 1998. NPD has granted to Jupiter Media Metrix an exclusive,
non-transferable worldwide license to use certain NPD software. The fee is
$11,000 per month, payable quarterly.

AMR Interactive Pty. Ltd. ("AMR"), a minority owner of Media Metrix Pty.
Limited Australia ("Australia"), provides panel recruitment, enumeration and
operation services, and sales and administration services to Australia. Such
charges were approximately $111,000 and $972,000 for the years ended

F-15

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

December 31, 2001 and 2000, respectively. As of December 31, 2000, Jupiter Media
Metrix owed AMR approximately $248,000 related to such services. Effective March
30, 2001, Jupiter Media Metrix sold its majority interests in Australia to Brian
Fine Holdings 2 Pty. Limited, an affiliate of AMR, the holder of the remaining
interests in Australia, resulting in a loss of $664,000. Resulting from certain
terms of this transaction, Jupiter Media Metrix owed AMR approximately $163,000
as of December 31, 2001.

Intage, formerly known as Market Intelligence Corporation, a minority owner
of Jupiter Media Metrix Japan KK ("Japan"), provided panel recruitment,
enumeration and operation services to Japan during the years ended December 31,
2001 and 2000. Such charges were approximately $1,250,000 and $2,375,000,
respectively. No amounts were owed as of December 31, 2001 related to such
services. As of December 31, 2000, Jupiter Media Metrix owed Intage
approximately $610,000 related to such services. In November 2001, Jupiter Media
Metrix and Intage entered into a Termination Agreement with respect to the
termination of operations of Japan and the termination of the venture
agreements. Japan ceased operations as of December 31, 2001 and is currently
being liquidated.

IPSOS S.A. ("IPSOS") and GfK A.G. ("GfK"), each a minority owner of MMXI
Europe B.V., provide panel recruitment, enumeration and operation services to
MMXI Europe. Such charges were approximately $2,490,000 and $818,000,
respectively, for each of IPSOS and GfK for the year ended December 31, 2001 and
$3,044,000 and $975,000, respectively, for the year ended December 31, 2000. In
October 2001, IPSOS exercised its right under a stock option agreement entered
into at the commencement of the venture to exchange its shares of MMXI Europe
for shares of Jupiter Media Metrix and ceased to be a shareholder. As of
December 31, 2001, Jupiter Media Metrix owed each of IPSOS and GfK approximately
$594,000 and $283,000, respectively, related to such services, and, as of
December 31, 2000, approximately $1,877,000 and $296,000, respectively, was
owed.

On July 30, 2001, Jupiter Media Metrix entered into a commitment letter
with Tod Johnson, Chairman of Jupiter Media Metrix, to provide to Jupiter Media
Metrix a one-year, $25.0 million letter of credit. In August 2001, Mr. Johnson
arranged to have such letter of credit issued by The Chase Manhattan Bank. The
commitment letter obligated Jupiter Media Metrix, on a quarterly basis in
arrears, to either (i) pay to Mr. Johnson an amount in cash equal to 0.25% of
the amount of the letter of credit or (ii) issue warrants to Mr. Johnson to
purchase 125,000 shares of Jupiter Media Metrix Common Stock. In October 2001,
Jupiter Media Metrix issued warrants to purchase 125,000 shares in connection
with the commitment letter. The value of the warrants was $62,500 and was
charged to interest expense in the accompanying consolidated statement of
operations. The commitment letter was subsequently terminated as of October 25,
2001 in connection with the proposed merger with NetRatings, Inc. (see Note 18).
In addition, Jupiter Media Metrix caused the letter of credit to be terminated
by The Chase Manhattan Bank.

9. LONG-TERM DEBT

During 2000 and 2001, Jupiter Media Metrix financed the premium due on
their directors and officers liability insurance at a rate of 6% per annum. Such
debt was payable in monthly principal and interest payments of $40,385, and
matured in November 2001.

In connection with the merger with Jupiter Communications, Jupiter Media
Metrix assumed a convertible promissory note that matured on January 7, 2001.
The promissory note was repaid in January 2001.

F-16

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. INCOME TAXES

Significant components of Jupiter Media Metrix' deferred income taxes are
as follows:

At December 31, 2001, Jupiter Media Metrix has available net operating loss
carryforwards ("NOLs") of approximately $126,014,000 for Federal income tax
purposes that expire in 2012 through 2021. Included in such amounts are
AdRelevance and RelevantKnowledge pre-acquisition NOLs of approximately
$3,550,000 and $11,000, respectively, which expire through 2013. As a result of
the RelevantKnowledge acquisition in 1998, under Section 382 of the Internal
Revenue Code, utilization of such NOLs will be limited to approximately $600,000
per year through 2013. Future benefits, if any, from the acquired NOLs would
first reduce the intangibles acquired and then income tax expense.

As of the respective acquisition dates, RelevantKnowledge and AdRelevance
had net deferred tax assets of $4,329,000 and $800,000, respectively, with equal
valuation allowances.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the period in
which the NOL can be utilized and the temporary differences become deductible.
Since Jupiter Media Metrix has incurred losses since inception, Jupiter Media
Metrix has established full valuation allowances for deferred tax assets. The
change in the valuation allowance for the years ended December 31, 2001, 2000
and 1999, excluding acquired valuation allowances, was $41,084,000, $3,452,000
and 4,053,000, respectively.

11. STOCK OPTIONS

Jupiter Media Metrix adopted the 1998 Equity Incentive Plan (the "1998
Plan") in November 1998 and, in May 2000, it adopted the 2000 Equity Incentive
Plan which was subsequently amended and restated (the "2000 Plan"). Under the
1998 Plan, Jupiter Media Metrix may award incentive and other non-statutory
stock options, stock appreciation rights, restricted stock and performance stock
units and other stock units which are valued by reference to the value of the
common stock. Jupiter Media Metrix also maintains the Jupiter Media Metrix Stock
Option Plan ("Jupiter Media Metrix Plan"), which provides for the award of up to
519,222 shares of common stock in the form of incentive stock options and
non-statutory stock options. In February 1999, the Board of Directors adopted,
and the shareholders subsequently approved in April 1999, an

F-17

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

amendment to increase the number of shares under the 1998 Plan from 732,400 to
1,318,320. Jupiter Media Metrix is authorized to issue awards of up to 4,000,000
shares of common stock, subject to an automatic adjustment each year as
described in the 2000 Plan.

In October 1998, Jupiter Media Metrix changed the provisions of all its
outstanding stock options granted prior to such time by removing the requirement
of the occurrence of an initial public offering before such options became
exercisable. This change resulted in a new measurement date. Accordingly,
Jupiter Media Metrix established, as a separate component of stockholders'
equity, deferred compensation (approximately $724,000) equal to the number of
options granted times the difference in their exercise price and $2.30, the
estimated fair value of the common stock at the time of the new measurement
date, and recorded compensation expense in 1998 of approximately $348,000
representing the portion of the deferred compensation which vested through
December 31, 1998. During 2001, 2000 and 1999, $94,000, $90,000 and $123,000 of
the deferred compensation was amortized, respectively.

On December 3, 1998, Jupiter Media Metrix issued stock options to employees
to purchase 153,072 shares of common stock at $2.39 per share, which was
considered to be the fair value of the common stock at that time. Soon
thereafter, Jupiter Media Metrix issued shares at $10.29 per share (see Note
13); accordingly, for accounting purposes, Jupiter Media Metrix used such per
share value to record an additional deferred compensation charge of $1,209,000
of which approximately $304,000, $304,000 and $361,000 was amortized in 2001,
2000 and 1999, respectively. In addition, during 1999 Jupiter Media Metrix
recorded an additional $325,000 of deferred compensation related to stock
options of which $82,000, $82,000 and $61,000 of the deferred compensation was
amortized in 2001, 2000 and 1999, respectively.

On July 5, 2000, Jupiter Media Metrix issued stock options to employees to
purchase 712,800 shares of common stock at $23.16 per share, below fair market
value, and recorded deferred compensation of $2,866,000, of which deferred
compensation of $716,000 and $358,000 was amortized in 2001 and 2000,
respectively. In addition, deferred compensation of $14,560,000, which
represents the intrinsic value of unvested Jupiter Communications options, was
recorded on September 20, 2000 in connection with the merger with Jupiter
Communications, of which deferred compensation $4,640,000 and $1,604,000 was
amortized in 2001 and 2000, respectively.

Jupiter Media Metrix also recorded non-cash compensation charges amounting
to approximately $26,000, $115,000 and $515,000 relating to the acceleration of
the vesting provisions of certain stock options during the years ended December
31, 2001, 2000 and 1999, respectively.

F-18

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following tables summarize information about stock options outstanding
at December 31, 2001:

FAIR VALUE DISCLOSURES

Pro forma information regarding net loss and net loss per share is required
by SFAS 123, which also requires that the information be determined as if
Jupiter Media Metrix has accounted for its stock options under the fair value
method of that statement. The fair value for those options granted prior to
Jupiter Media Metrix' public offering was estimated using the minimum value
method with the following assumptions: no dividend yield, weighted-average
expected life of the option of five years, and risk-free interest rates of 4.7%,
6.1% and 6.2% for the years ended December 31, 2001, 2000 and 1999,
respectively.

For those options granted after Jupiter Media Metrix became a public entity
an expected volatility factor of 377%, 98% and 97% was used for the
Black-Scholes option pricing model for the years ended December 31, 2001, 2000
and 1999, respectively. The Black-Scholes option valuation model was developed
for use in estimating the fair value of traded options that have no vesting
restrictions and are fully transferable. In addition, the option valuation model
requires the input of highly subjective assumptions included the expected stock
price volatility. Because Jupiter Media Metrix' stock options have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the
fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its stock
options.

F-19

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. Jupiter Media
Metrix' pro forma financial information is as follows:

12. LEASE COMMITMENTS

Jupiter Media Metrix leases office space in the United States and other
countries. At December 31, 2001, the future minimum lease payments under
non-cancelable operating leases with initial or remaining lease terms in excess
of one year are as follows:

Future minimum lease payments have not been reduced by future minimum
sublease rentals of $12,337,000 under operating leases. Rent expense
approximated $7,000,000, $3,000,000 and $861,000 for the years ended December
31, 2001, 2000 and 1999, respectively.

13. STOCKHOLDERS' EQUITY

As disclosed in Note 3, Jupiter Media Metrix issued 14,921,856 and 134,921
shares of common stock in connection with the merger with Jupiter Communications
and acquisitions of MMXI Nordic and AdRelevance in 2000, and 697,664 shares of
common stock in connection with its acquisition of AdRelevance in 1999.

On January 4, 1999, Jupiter Media Metrix issued to a foreign investor
194,380 shares of common stock at a purchase price per share of $10.29, for an
aggregate purchase price of approximately $2,000,000, pursuant to a stock
purchase agreement. Jupiter Media Metrix had received the proceeds from this
transaction on December 31, 1998 and had recorded "common stock issuable" in its
1998 consolidated balance sheet.

In May 1999, Jupiter Media Metrix consummated an initial public offering
(the "IPO") of 3,000,000 shares of common stock at a price of $17 per share. The
underwriters in connection with the IPO exercised their over-allotment option to
purchase an additional 250,000 shares from Jupiter Media Metrix and 200,000
shares from existing shareholders at a price of $17 per share. The total net
proceeds to Jupiter Media

F-20

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Metrix amounted to approximately $49,383,000 after deducting the underwriters'
discount and related expenses of $5,867,000.

In October 1999, Jupiter Media Metrix consummated a secondary offering of
3,000,000 shares of common stock at a price of $50.50 per share. Of the
3,000,000 shares sold, 1,500,000 shares were sold by Jupiter Media Metrix and
1,500,000 shares were sold by existing stockholders. The net proceeds to Jupiter
Media Metrix were $71,095,000 after deducting the underwriters' discount and
related expenses.

In July 2001, Jupiter Media Metrix purchased an exclusive, perpetual
technology license for $3.0 million in cash and issued of 1,750,000 options to
purchase shares of common stock in connection therewith at an exercise price of
$5.00 per share. The options have been valued at $1,365,000 using the
Black-Scholes option pricing model. The options were granted in two tranches,
vest over a three-year period and expire on July 13, 2008. (see Note 6).

On October 19, 2001, Jupiter Media Metrix issued warrants to purchase
125,000 shares of common stock to Tod Johnson in connection with a commitment
letter dated July 30, 2001 by and between Mr. Johnson and Jupiter Media Metrix
to provide to Jupiter Media Metrix a one-year, $25.0 million letter of credit.
In August 2001, Mr. Johnson arranged to have such letter of credit issued by The
Chase Manhattan Bank. The warrants have an exercise price of $0.01 per share and
a term of 5 years from the date of issuance. The commitment letter obligated
Jupiter Media Metrix, on a quarterly basis in arrears, to either (i) pay to Mr.
Johnson an amount in cash equal to 0.25% of the amount of the letter of credit
or (ii) issue warrants to Mr. Johnson to purchase 125,000 shares of Jupiter
Media Metrix Common Stock. The commitment letter and the letter of credit were
terminated as of October 25, 2001.

Jupiter Media Metrix has reserved 10,082,117 shares of common stock for
issuance upon the exercise of all outstanding options and warrants at December
31, 2001.

14. INTERNATIONAL OPERATIONS

In September 1999, Jupiter Media Metrix entered into a venture with GfK AG
and IPSOS SA to form MMXI Europe B.V. In March 2000, in connection with Jupiter
Media Metrix' acquisition of MMXI Nordic, SIFO, now known as Observer A.B.,
became a shareholder of MMXI Europe. In October 2001, IPSOS exercised its right
under a stock option agreement entered into at the commencement of the venture
to exchange its shares of MMXI Europe, representing 22.0% ownership, for shares
of Jupiter Media Metrix. In connection with IPSOS' exercise of its options to
exchange shares of MMXI Europe, Jupiter Media Metrix recorded additional
goodwill of $44,000 during the year ended December 31, 2001. In addition, in
connection with such exchange, the venture documents were terminated solely with
respect to IPSOS. Jupiter Media Metrix owns 72.1%, GfK owns 19.9%, and Observer
owns 8.0% of MMXI Europe.

In December 1999, Jupiter Media Metrix formed Media Metrix Japan KK, now
known as Jupiter Media Metrix Japan KK, as a wholly owned subsidiary. Effective
January 1, 2000, Jupiter Media Metrix entered into a venture with Marketing
Intelligence Corporation, now known as Intage, to own and operate Jupiter Media
Metrix K.K. in Japan, of which Jupiter Media Metrix owns 72% and Intage owns
28%. In November 2001, Jupiter Media Metrix and Intage entered into a
Termination Agreement with respect to the termination of operations of Japan and
the termination of the venture agreements. Japan ceased operations as of
December 31, 2001 and is currently being liquidated.

In January 2000, Jupiter Media Metrix, through its wholly owned subsidiary
MMXI Holdings, Inc., entered into a venture with ComQuest Research Inc.
("ComQuest") to form Media Metrix Canada Co. In December 2001, MMXI Holdings
purchased all shares of Media Metrix Canada Co. held by ComQuest and terminated
all of the venture documents.

F-21

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Effective January 1, 2000, Jupiter Media Metrix acquired the Internet
audience measurement business operated by Observer in Sweden (see Note 3).

Effective January 1, 2000, Jupiter Media Metrix entered into a venture with
IPSOS to form JMXI Latin America B.V. ("JMXILA"), a Netherlands company pursuant
to which Jupiter Media Metrix owned 51% and IPSOS owned 49% of JMXILA. In
October 2001, IPSOS exercised its right under a stock option agreement entered
into at the commencement of the venture to exchange its shares of JMXILA for
shares of Jupiter Media Metrix. In connection with IPSOS' exercise of its
options to exchange shares of JMXILA, Jupiter Media Metrix recorded additional
goodwill of $26,000 during the year ended December 31, 2001. In addition, in
connection with such exchange, the venture documents were terminated. As of
December 31, 2001, JMXILA and Media Metrix Brasil Ltda., of which JMXILA owns
99% and MMXI Holdings, Inc. owns 1%, ceased operations and are being liquidated.

In March 2000, Jupiter Media Metrix entered into a venture with AMR to form
Media Metrix Pty. Limited Australia. Jupiter Media Metrix owned 51% and AMR
owned 49% of the company. Effective March 30, 2001, Jupiter Media Metrix sold
its majority interests in Australia to Brian Fine Holdings 2 Pty. Limited, an
affiliate of AMR.

In September 2000, MMXI Europe entered into a venture with IHA Institut fur
Marketanalysen ("IHA"), an affiliate of GfK to form MMXI Switzerland GmbH, a
Swiss company. MMXI Europe owns 19.9% and IHA owns 80.1% of the company.

In connection with the formation of each of the international ventures,
Jupiter Media Metrix granted each of its venture partners an option, subject to
certain conditions, to exchange such partners shares in the respective ventures
for shares of Jupiter Media Metrix common stock. If any partner elects to
exercise its option to convert its shares into shares of Jupiter Media Metrix
common stock, Jupiter Media Metrix will need to record additional goodwill in an
amount equal to the difference between the then fair market value of the shares
of Jupiter Media Metrix' common stock, multiplied by the number of shares issued
and the net book value of the joint venture of which such partner is a
shareholder attributable to such partner.

15. SEGMENT INFORMATION

Prior to the Merger with Jupiter Communications on September 20, 2000,
Jupiter Media Metrix operated in one business segment, providing Internet and
digital measurement products and services.

Currently, Jupiter Media Metrix operates in three business segments. Its
business units include Measurement (which includes the Media Metrix, AdRelevance
and LiveMetrix business units), which offer clients a broad range of products
and services that measure audience, advertising commerce and new media usage on
the Internet and other digital media, as well as real-time website traffic data;
Jupiter Research, which provides clients with strategic analysis and insights,
including industry trends, forecasts and best practices, all backed by
proprietary data; and Events, a provider of conferences focusing on the global
digital economy.

F-22

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following tables present information about Jupiter Media Metrix'
operating segments:

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

* Includes information for LiveMetrix since its launch in October 2001.

** All research personnel compensation is charged to Jupiter Research. No
allocation is made for research personnel involved in Jupiter Events.

The following table presents revenue information about Jupiter Media Metrix
by geographic area:

There were no material international revenues for the year ended December
31, 1999. There are no significant long-lived assets outside the United States.
In addition, Jupiter Media Metrix has not allocated its assets to the reportable
segments.

16. RESTRUCTURING AND OTHER CHARGES

In January 2001, Jupiter Media Metrix announced and began to implement a
restructuring plan. Jupiter Media Metrix' goal was to significantly reduce
operating expenses by realigning resources around its core product initiatives,
and the reductions of sales and marketing, product development, administrative
and technology expenses. As part of this restructuring plan, Jupiter Media
Metrix implemented a workforce reduction of approximately 8%, consolidated or
closed excess and duplicate facilities in the United States, abandoned certain
property, equipment and improvements (principally leasehold improvements
associated with such facility closures) and cancelled 12 conferences scheduled
during 2001.

F-23

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In May 2001, Jupiter Media Metrix continued its restructuring and announced
and began to implement a second restructuring plan. Jupiter Media Metrix desired
to expand on the reduction in operating expenses achieved in the restructuring
announced in January and accelerate the reductions seen in sales and marketing,
product development and administrative and technology expenses. As part of the
second restructuring plan, Jupiter Media Metrix implemented an additional
workforce reduction of approximately 18%, consolidated or closed additional
facilities in the United States, abandoned certain property, equipment and
improvements (principally leasehold improvements associated with such facility
closures)and cancelled 3 additional conferences scheduled during 2001.

In September 2001, Jupiter Media Metrix further continued its restructuring
and announced and began to implement a third restructuring plan. Jupiter Media
Metrix reorganized its management structure and desired to achieve a greater
reduction in operating expenses, as well as a further acceleration of the
reductions seen in sales and marketing, product development, administrative and
technology expenses in the previously announced restructuring plans. As part of
the third restructuring plan, Jupiter Media Metrix implemented a further
workforce reduction of approximately 28%, abandoned additional property,
equipment and improvements (principally leasehold improvements associated with
facility closures) and cancelled two additional conferences scheduled during
2001 and one conference scheduled during 2002 and decided to discontinue certain
operations. The January, May and September 2001 restructuring plans resulted in
a charge of approximately $51.3 million recorded during the year ended December
31, 2001.

During the year ended December 31, 2001, the restructuring charge included
$8.2 million related to severance and other employee costs associated with the
elimination of approximately 480 positions across a number of business
functions, job categories and regions. Costs associated with the employee
terminations included severance pay, accrued bonus payments, medical and other
benefits. The restructuring charge also included $37.7 million for facilities
that were consolidated or closed, including offices in New York, Atlanta, Los
Altos, Berkeley, San Francisco and London. This amount includes a portion of the
remaining contractual obligations under facility leases from the date of closure
to the end of the lease term, as well as a write-down of leasehold improvements
in connection with the closure or consolidation of such facilities. Jupiter
Media Metrix continued to record monthly rent expense on these facilities as an
operating expense until the facilities were closed. In addition, Jupiter Media
Metrix recorded approximately $869,000 of restructuring charges related to the
discontinuation of certain international operations, panel shutdown costs and
cancellation of a note receivable.

During the year ended December 31, 2001, Jupiter Media Metrix also recorded
approximately $2.7 million in other charges related to the cancellation of
scheduled conferences by its Events business unit, primarily consisting of
cancellation fees charged by facility providers and other vendors, and wrote
down approximately $1.9 million of abandoned equipment.

F-24

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth the restructuring activity and other charges
during the year ended December 31, 2001:

Of the total restructuring and other charges recorded of $51.3 million
during the year ended December 31, 2001, $9.9 million was paid, and $12.9
million of property, plant and equipment and other current assets were
written-off, leaving an accrual of $28.5 million at December 31, 2001, of which
$20.3 million is related to severance and lease payments due after one year and
is included in long-term liabilities. Of the $28.5 million accrual remaining at
December 31, 2001, $8.1 million is expected to be paid out in 2002, $2.2 million
in 2003, $1.4 million in 2004, $1.5 million in 2005, $1.4 million in 2006 and
the remaining $13.9 million from 2007 to 2015.

17. WRITE-OFF OF INVESTMENTS

During the year ended December 31, 2001, Jupiter Media Metrix recorded a
loss of approximately $5.5 million in connection with the write-off of two
investments of Jupiter Communications. Such write-offs include a loss of $2.0
million on Jupiter Communications' investment in Powerful Media, Inc. and a loss
of $3.5 million on Jupiter Communications' investment in Strategic Intelligence
Pte. Limited, a Singapore corporation.

18. PROPOSED MERGER WITH NETRATINGS

On October 25, 2001, Jupiter Media Metrix announced that it had entered
into an Agreement and Plan of Merger, dated as of October 25, 2001, (the "Merger
Agreement"), with NetRatings, Inc. ("NetRatings"), and its acquisition
subsidiary, Sonoma Acquisition Corp., LLC ("Merger Sub"). Pursuant to the Merger
Agreement, Merger Sub was to be merged with and into Jupiter Media Metrix (the
"Proposed Merger"), with Jupiter Media Metrix continuing as the surviving
corporation. In connection with the Merger Agreement, Jupiter Media Metrix and
NetRatings had also entered into Loan and Security Agreement dated as of October
25, 2001 (the "Loan and Security Agreement") under which NetRatings agreed to
lend Jupiter Media Metrix up to $25.0 million in $5.0 million increments,
subject to specified conditions.

On October 25 , 2001, Jupiter Media Metrix terminated the standby letter of
credit arrangement entered into on July 30, 2001 with Mr. Tod Johnson which had
been replaced by the Loan and Security Agreement and amended its stockholders'
rights plan to provide, among other things, that no person or entity would be
considered to be an "acquiring person" under the stockholders' rights plan by
reason of any transaction contemplated by the Merger Agreement.

On December 7, 2001, Jupiter Media Metrix and NetRatings received a request
for additional information from the Federal Trade Commission in connection with
it antitrust review of the Proposed

F-25

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Merger. Effective January 18, 2002, Jupiter Media Metrix and NetRatings amended
the Merger Agreement to permit, among other matters, the continued prosecution
of the its patent litigation against NetRatings during the pendency of the
antitrust review by the Federal Trade Commission.

On February 18, 2002, after the Federal Trade Commission had expressed its
intention to seek an injunction against the Proposed Merger and any loans under
the Loan and Security Agreement, Jupiter Media Metrix and NetRatings mutually
terminated the Merger Agreement.

19. EMPLOYEE BENEFIT PLANS

Jupiter Media Metrix sponsors a defined contribution plan for eligible
employees under Section 401(k) of the Internal Revenue Code. Eligible employees
are allowed to have made on their behalf, through salary reduction, a deferred
salary contribution up to 15% of their earnings, subject to Internal Revenue
Service limitations. Jupiter Media Metrix makes matching employer contribution
to the plan on a discretionary basis on employee deferrals up to 5.5% of
compensation. Matching contributions under such plan approximated $640,000 and
$534,000 for the years ended December 31, 2001 and 2000, respectively.

During 2000, Jupiter Media Metrix adopted the Jupiter Media Metrix 2000
Employee Stock Purchase Plan ("ESPP"). The purpose of the ESPP was to provide
eligible employees of Jupiter Media Metrix with a means to acquire shares of its
common stock at a discount through payroll deductions. The ESPP is intended to
qualify as an "employee stock purchase plan" under Section 426 of the Internal
Revenue Code. During the year ended December 31, 2001, Jupiter Media Metrix
issued 50,572 shares of common stock in accordance with the ESPP. As of December
31, 2001, Jupiter Media Metrix terminated participation in the ESPP following
its final plan period of the year.

F-26

SCHEDULE II

JUPITER MEDIA METRIX, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

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

(a) Reserves acquired in connection with mergers and acquisitions.

(b) Write-offs of amounts against allowance provided.

S-1