Complaint seeks unspecified damages as a result of various alleged securities law violations arising from activities purportedly engaged in by the underwriters in connection with our initial public offering. Plaintiffs allege that the underwriter defendants agreed to allocate stock in the Company's initial public offering to certain investors in exchange for excessive and undisclosed commissions and agreements by those investors to make additional purchases of stock in the aftermarket at pre-determined prices. Plaintiffs allege that the prospectus for the Company's initial public offering was false and misleading in violation of the securities laws because it did not disclose these arrangements. The action is being coordinated with approximately three hundred other nearly identical actions filed against other companies before one judge in the U.S. District Court for the Southern District of New York. On October 9, 2002, the Court dismissed the Individual Defendants from the case without prejudice based on Stipulations of Dismissal filed by the plaintiffs and the Individual Defendants. On February 19, 2003, the Court denied the motion to dismiss the complaint against the Company. The Company has approved a Memorandum of Understanding ("MOU") and related agreements which set forth the terms of a settlement between the Company and the plaintiff class. It is anticipated that any potential financial obligation of the Company to plaintiffs due pursuant to the terms of the MOU and related agreements will be covered by existing insurance. Therefore, the Company does not expect that the settlement will involve any payment by the Company. The MOU and related agreements are subject to a number of contingencies including the negotiation of a settlement agreement and approval by the Court. We cannot predict whether or when a settlement will occur or be finalized.

Register.com has been named as a defendant in a purported class action lawsuit filed on May 2, 2002, which alleges that our SafeRenew program violates New York law. This lawsuit was filed by Brian Wornow, on behalf of himself and all others similarly situated, in the Supreme Court of the State of New York. Our SafeRenew program was implemented in January 2001 on an "opt-out basis" to .com, .net and .org registrations registered through the www.register.com website, and was subsequently expanded to cover certain ccTLDs registered through this website. Under the terms of our services agreement, at the time a covered registration comes up for renewal, we attempt to charge a registrant's on-file credit card a one year renewal fee and, if the charge is successful, to renew the registration for that additional one-year period. Register.com believes that the SafeRenew program was properly adopted as an effort to protect our customers' online identities. Plaintiff sought a declaratory judgment that the SafeRenew program violates New York General Obligations Law Section 5-903, and also claimed breach of contract, money had and received, and unjust enrichment. Plaintiff further sought to enjoin Register.com from automatically renewing domain name registrations, an award of compensatory damages, restitution, disgorgement of profits (plus interest), cost and expenses, attorneys' fees, and punitive damages. On September 6, 2002, Register.com filed a motion to dismiss the complaint in its entirety. On April 17, 2003, Register.com's motion was granted as to two counts (declaratory judgment and breach of contract), but denied as to two other counts (unjust enrichment and money had and received). On April 28, 2003, Register.com filed an answer denying the material allegations of the complaint. On May 2, 2003, Plaintiff filed a notice of appeal to the Appellate Division, First Department of the two counts that were dismissed. On May 15, 2003, Plaintiff filed an amended complaint asserting new causes of action against Register.com for (i) deceptive trade practices in violation of New York General Business Law Section 349; (ii) conversion; and (iii) breach of the implied covenant of good faith and fair dealing. On June 9, 2003, Register.com moved to dismiss Plaintiff's newly asserted causes of action. On July 23, 2003 the Court heard oral arguments on Register.com's motion. On February 2, 2004, Plaintiff filed an appeal of the dismissal of the Section 5-903 claims. On February 19, 2004, Register.com's motion to dismiss the first, fourth and a fifth causes of action of Plaintiff's amended complaint was granted. While we intend to continue to defend ourselves vigorously in this lawsuit, in an effort to mitigate a potential worst-case scenario, we entered into an insurance agreement pursuant to which, in accordance with its terms and conditions, to the extent that we have a final judgment in excess of $15 million our insurance carrier would cover up to an additional $30 million.

On or about January 17, 2003, individual stockholders of the Company filed complaints in the Delaware Court of Chancery purporting to commence class action lawsuits against the Company and

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each of the individual members of the Company's Board of Directors. The complaints were styled as Lanza v. Morten, et al (C.A. No. 20123) and Norton v. Morten, et al (C.A. No. 20124). The complaints alleged, among other things, breaches of fiduciary duty by the directors in connection with certain publicly disclosed indications of interest in the acquisition of Company and further alleged that the directors were not fulfilling their fiduciary duties in connection with their review and response to such indications of interest. On January 9, 2004 the complaints were withdrawn by the plaintiff and on January 12, 2004 the court approved the dismissal of the complaints without prejudice.

In February 2001, Register.com was named as a defendant in a purported class action lawsuit pending in the Supreme Court of the State of New York. The complaint alleges that by linking new domain names registered through Register.com to a "Coming Soon" web page that informs visitors the name was recently registered through Register.com, and provides links to services provided by Register.com and its business partners, as well as a banner advertisement for such services, Register.com has (i) breached an implied covenant of good faith and fair dealing; (ii) engaged in deceptive trade practices in violation of New York General Business Law Section 349; and (iii) been unjustly enriched. Prior to the filing of the lawsuit, in addition to disclosing the Coming Soon page by means of such domain names, Register.com also disclosed the existence of the Coming Soon page in the "Help" and "Frequently Asked Questions" portions of its website. In March 2001, Register.com added an additional disclosure concerning the Coming Soon page to Register.com's Services Agreement. In April 2001, Register.com filed a motion to dismiss Plaintiff's claims for failure to state a claim upon which relief may be granted and in August 2001, Register.com's motion was granted. Plaintiff appealed the dismissal to the Appellate Division, First Department, and in April 2003 the Appellate Division affirmed the dismissal of the unjust enrichment cause of action, but reinstated the causes of action for breach of an implied covenant of good faith and fair dealing and deceptive trade practices. Thereafter, Register.com and Plaintiff agreed upon a settlement which, following notice to the proposed settlement class, was approved by the Court on November 3, 2003. In accordance with the settlement, Register.com has provided each member of the putative class with a five dollar discount off of future purchases of Register.com's fees for domain name registrations and renewals and has paid attorney's fees in the amount awarded by the Court to class counsel.

On or about August 7, 2003 and August 8, 2003, purported stockholders of the Company filed two separate complaints in the Court of Chancery of Delaware against the Company and certain current and past individual members of the Company's Board of Directors. The first complaint was styled as McBride v. Register.com, Inc., et al (C.A. No. 20470) and the second complaint was styled as DeMatte v. Register.com, Inc., et al (C.A. No. 20474). On November 3, 2003, the two cases were consolidated (C.A. No. 20470) and on November 5, 2003, an amended complaint was filed. The complaint alleges, among other things, that the named defendants breached their fiduciary duties in connection with the self tender that the Company commenced in August 2003 and completed in September 2003, and that the self tender is an attempt by the individual defendants to entrench their positions in the Company. The complaint seeks, among other things, the court's certification as a class action lawsuit, unspecified damages and rescission of the self tender. On December 5, 2003 Register.com filed a motion to dismiss for failure to state a claim upon which relief can be granted and failure to comply with the requirements of Rule 23.1 and on February 26, 2004 Register.com filed a brief in support of such motion.

There are various other claims, lawsuits and pending actions against the Company incidental to the operations of its business. It is the opinion of management, after consultation with counsel, that the ultimate resolution of such claims, lawsuits and pending actions will not have a material adverse effect on the Company's financial position, results of operations or liquidity.

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

No matter was submitted to a vote of security holders during the fourth quarter of 2003.

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PART II

Item 5.    Market for Registrant's Common Equity and Related Stockholder Matters.

Our common stock has been quoted on the Nasdaq National Market under the symbol RCOM since our initial public offering on March 3, 2000. Prior to that date, there was no public market for our common stock. The following table sets forth, for the periods indicated, the high and low sales prices per share of the common stock as reported on the Nasdaq National Market.

				High				Low
Year Ending December 31, 2003:
Fourth Quarter				$	5.85			$	4.49
Third Quarter					6.50				4.50
Second Quarter					6.45				5.20
First Quarter					5.82				4.44
Year Ending December 31, 2002:
Fourth Quarter				$	5.25			$	2.93
Third Quarter					7.66				2.52
Second Quarter					9.07				6.95
First Quarter					11.60				7.35

On March 8, 2004, the last sale price of our common stock reported by the Nasdaq National Market was $5.30 per share. As of March 8, 2004, we had approximately 73 holders of record of our common stock.

Dividend Policy

We have never declared nor paid any cash dividends on our common stock; however, we may consider the payment of a dividend in the future. In addition, in September 2003 we used $120 million of our cash, short-term investments and marketable securities to complete a self-tender offer in which we purchased 17,910,347 shares of our common stock and warrants to purchase 987,283 shares of our common stock (based on the conversion of warrants on a cashless basis at the $6.35 per share offer price).

Equity Compensation Plan Information

The following table provides information as of December 31, 2003 with respect to shares of our common stock that may be issued under our existing equity compensation plans:

Plan Category				Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights				Weighted Average Exercise Price of Outstanding Options, Warrants and Rights				Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
				(a)				(b)				(c)
Equity Compensation Plans Approved by Security Holders(1)					5,619,539	(2)		$	9.41				3,021,854	(3)
Equity Compensation Plans Not Approved by Security Holders(4)					11,343			$	1.02				—
Total					5,630,882			$	9.39				3,021,854

(1)	Includes options to purchase shares under our Amended and Restated 2000 Stock Incentive Plan and our Employee Stock Purchase Plan (ESPP).

(2)	Excludes purchase rights accruing under the ESPP, which has a shareholder approved reserve of 698,070 shares of

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Common Stock (698,070 shares of Common Stock as of January 1, 2004). Under the ESPP, each eligible employee may purchase shares of Common Stock through payroll deductions of up to 10% of their eligible compensation. The price paid by the employee is 85% of the fair market value on the offering date or the last day of the purchase period. There are two 6-month purchase periods per year commencing May 1 and November 1.

(3)	Consists of shares available for future issuance under the 2000 Plan and the ESPP.

(4)

Consists of the following warrants to purchase shares of Common Stock issued prior to the Company's initial public offering, pursuant to compensation arrangements with advisors: 843 shares at an exercise price of $0.43 per share, which expires September 21, 2008; 5,250 shares at an exercise price of $0.57 per share, which expires March 17, 2009; and 5,250 shares at an exercise price of $1.57 per share, which expires June 10, 2009.

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Item 6.    Selected Financial Data.

The following table sets forth certain selected consolidated financial data of the Company for the years ended December 31, 2003, 2002, 2001, 2000 and 1999. The selected consolidated data is derived from our consolidated financial statements. You should read the following selected consolidated financial data together with our consolidated financial statements and their notes as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations."

				Year Ended December 31,
				2003				2002				2001				2000				1999
				(in thousands, except per share amounts)
Statement of Operations Data:
Net revenues				$	104,319			$	106,288			$	116,281			$	86,110			$	9,645
Cost of revenues					32,694				35,299				34,790				23,869				3,083
Gross profit					71,625				70,989				81,491				62,241				6,562
Operating expenses:
Sales and marketing					26,169				31,222				33,532				47,311				7,150
Research and development					18,615				13,357				7,741				5,580				1,767
General and administrative (including non-cash compensation of $1,048, $1,937, $1,771, $2,173, and $4,929, respectively)					26,865				26,312				14,769				13,434				7,309
Amortization and writedown of goodwill and other intangibles					551				17,290				45,299				5,582				—
Total operating expenses					72,200				88,181				101,341				71,907				16,226
(Loss) from operations					(575	)			(17,192	)			(19,850	)			(9,666	)			(9,664	)
Other income, net					2,989				5,588				8,664				9,520				887
Gain on sale of investment					—				—				—				4,603				—
Income (loss) before provision (benefit) for income taxes					2,414				(11,604	)			(11,186	)			4,457				(8,777	)
Provision (benefit) for income taxes					90				(1,195	)			10,401				4,187				—
Net income (loss)				$	2,324			$	(10,409	)		$	(21,587	)		$	270			$	(8,777	)
Basic income (loss) per share				$	0.07			$	(0.26	)		$	(0.58	)		$	0.01			$	(0.46	)
Diluted income (loss) per share				$	0.06			$	(0.26	)		$	(0.58	)		$	0.01			$	(0.46	)
Weighted average number of shares outstanding:
Basic					35,701				40,046				37,424				31,394				19,117
Diluted					37,662				40,046				37,424				39,184				19,117

				December 31,
				2003				2002				2001				2000				1999
				(in thousands)
Balance Sheet Data:
Cash and cash equivalents				$	52,991			$	50,557			$	61,932			$	60,156			$	40,944
Short-term investments					39,043				105,283				78,186				65,283				4,723
Working capital					70,389				125,636				120,592				92,160				29,813
Available-for-sale securities					2,527				61,205				57,651				47,980				—
Total assets					163,425				285,604				268,789				292,617				68,336
Total deferred revenues					86,919				87,110				77,379				88,516				32,101
Total liabilities					103,133				111,962				93,196				103,722				46,423
Stockholders' equity					60,292				173,642				175,593				188,895				21,913

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

This report contains forward-looking statements relating to future events and our future performance within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words "expects", "anticipates", "intends", "believes" or similar language. Actual results could differ materially from those anticipated in such forward-looking statements. All forward-looking statements included in this document are based on information available to us on the date hereof. It is routine for our internal projections and expectations to change as the year or each quarter in the year progress, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change prior to the end of each quarter or the year. Although these expectations may change, our company policy is generally to provide our expectations only once per quarter, so we may not inform you of any changes until the next quarter. We caution investors that our business and financial performance are subject to substantial risks and uncertainties. In evaluating our business, prospective investors should carefully consider the information set forth under the caption "Risk Factors" in addition to the other information set forth herein and elsewhere in our other public filings with the Securities and Exchange Commission.

Overview

We are a provider of global domain name registration, website, email and other Internet services for businesses and consumers that wish to have a unique address and branded identity on the Internet. Domain names serve as addresses and identities on the World Wide Web. They enable a business or person to establish an Internet presence and are integral to the use of websites (e.g., www.register.com), email (e.g., johndoe@register.com) and other types of Internet-based services

We began processing domain name registrations in the generic top level domains (gTLDs) .com, .net and .org in June 1999 and, as such, were the first registrar accredited by the Internet Corporation for Assigned Names and Numbers (ICANN) to compete in the domain name registration market after ICANN introduced competition in the industry. We had approximately 3.1 million active domain name registrations under management as of December 31, 2003, representing approximately 1 million customers. Currently, we register, renew and transfer domain names in TLDs such as .com, .net, ..org, .biz, .info and .name and in over 400 country code top level domains (ccTLDs), including .de for Germany and .jp for Japan and sub domains, such as .co.uk and .org.uk for the United Kingdom.

We believe that we offer a quick and user-friendly domain name registration process as well as responsive and reliable customer support. We also assist our customers in further developing and maintaining their Internet presence by offering them a range of website, email and other value-added products and services.

Domain name registration activity is driven by the use of the Internet by businesses and consumers for electronic commerce and communication, the promotion, marketing and protection of brands and identities across the world and other online activities. Our mission is to become the preferred provider of domain names, website, email and other Internet services for customers seeking to build, manage and promote their online presence.

Our Retail division focuses on small to medium-sized businesses and individuals. Generally, these customers purchase domain name registration services and other value-added services directly from our website located at www.register.com. In addition to our Retail division, we maintain a Corporate Services division. Our Corporate Services division provides domain name registration and related products and services, including global registration and management services and online brand and trademark protection, to large corporate enterprises with specialized registration needs. In order to extend the distribution reach of our products and services, we also maintain a Global Partner Network (GPN) wholesale division which works with companies that resell our domain name registration and web services to their customers using our software solutions. Our GPN partners are typically Internet Service Providers (ISPs), web-hosting companies, telecom carriers and web portals, but also include online and offline retailers and business aggregators. Using our software solutions, these companies resell our domain name registration services and related products and services to their customers.

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In June 2000, we acquired Inabox, Inc. for $1.0 million cash and 280,019 shares of our common stock, and we used Inabox's software to develop our FirstStepSite^® and WebSiteNOW!^TM products and My.register.com, one of the reseller solutions offered to our Global Partner Network. In September 2000, we acquired Afternic.com, Inc., a secondary market exchange for domain names, for $10.0 million cash and 4,378,289 shares of our common stock. Each of these transactions was accounted for using the purchase method of accounting. As a result, the financial results of Inabox and Afternic.com are consolidated with our financial results from the dates of their respective acquisitions. We made a decision to abandon the Afternic business in September 2002.

In March 2002, we acquired Virtual Internet plc, a U.K. based company, for £11.99 million (US $16.9 million at the date of acquisition), which had operations in the United States and Europe and operated through two divisions: the Corporate Services division and the Hosting division. The Corporate Services division provides domain name registration and online intellectual property management and protection services, and the Hosting division provided web-hosting services. In May 2002, we sold the Hosting division for $0.5 million. Our results of operations include Virtual Internet's Corporate Services division subsequent to March 8, 2002. In 2003, we changed the name of Virtual Internet to Register.com Europe plc ("RCOM Europe").

In late 2002, we began a restructuring program to address the challenges facing our business. The primary goal of our restructuring program is to introduce new systems that will enable us to operate our business more efficiently. For our Retail division, we are building a new and more flexible systems architecture which we believe will enable us to introduce new products and services more rapidly and cost effectively and to improve our operating efficiencies and reduce costs. We believe that by making our technology architecture more flexible and efficient we will achieve these goals. For our Corporate Services division, we are developing a system to automate as much of the order processing and fulfillment for ccTLD registrations as possible. We anticipate that our new Corporate Services system will enable us take sales orders and fulfill them on a more highly automated basis, thereby reducing our costs and increasing our efficiency and accuracy.

As part of our cost reduction efforts, we have also relocated some of our groups and operations to our Canadian facility, where the overhead and labor costs are lower than in our other locations. In addition, in February 2004, we sold our RegistryPro business, which had been given ICANN approval to operate the .pro registry. We sold this business because we believe that operating a registry would have distracted us and taken time, energy and resources from our core business of operating a registrar and selling related value-added products and services.

Significant Accounting Policies

Use of Estimates

The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Our most significant estimates relate to potential refunds to customers and chargebacks from customers; the realizability of accounts receivable, fixed assets, intangible assets, and deferred tax assets; the potential liability to credit card associations for penalties for credit card chargebacks and refunds in excess of certain thresholds; potential liability for various matters in litigation; and the estimated useful lives of fixed assets and intangible assets. Actual results could differ from management's estimates. The markets for our products and services are characterized by intense competition, continual technology advances and new product/service introductions, all of which could impact the future realizability of our assets.

Net Revenues

We derive our net revenues from domain name registrations, other products and services and advertising. We earn registration fees in connection with new, renewed, and transferred-in registrations. Registration periods generally range from one to ten years.

Domain name registration revenues are deferred at the time of the registration and are recognized ratably over the term of the registration period. Under this subscription-based model, we

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recognize revenue over the period during which we provide the registration services, including customer service and maintenance of the individual domain name records. We require prepayment at the time of sale via credit card for most online domain name registration sales, which provides us with the full cash fee at the beginning of the registration period whereas we recognize the revenues over the registration period. For many of our customers who register domain names through our Corporate Services division, and many of the participants in our Global Partner Network, we establish lines of credit based on credit worthiness.

Under current credit card industry practices, we are liable for fraudulent and disputed credit card transactions because we do not obtain the cardholder's signature at the time of the transaction, even though the financial institution issuing the credit card may have approved the transaction. As a result, we must estimate the amount of credit card chargebacks we will receive in the future related to credit card sales in the current period. In determining our estimate, on a monthly basis we review historical rates of credit card chargebacks, current economic trends and changes in acceptance of our products and services. Deferred revenues and revenues recognized are presented net of provisions for estimated refunds to customers and chargebacks from customers.

The credit card associations may impose financial penalties if our chargebacks and/or refunds exceed certain thresholds. Such penalties are not charged to revenues, but are classified as general and administrative expenses. Because the imposition of any potential penalties is at the discretion of the association, subject to contractual limitations, we have accrued amounts to cover what we estimate to be the maximum potential penalties that could be imposed under that association's rules. If the penalty ultimately imposed is less than the maximum contractual amount, we would reverse any excess accounts previously accrued as a reduction of general and administrative expense at that time. If a significant percentage of customers continue to request refunds from us or contact their bank to request that the amount we charged to their credit card be charged back to us based on claims that their credit card was used fraudulently or without their consent, our business could be materially adversely affected. See "Risk Factors" and Note 14 to Consolidated Financial Statements "Commitments and Contingencies — Credit Card Penalties" for additional information in connection with penalties that may be imposed by credit card associations and other risks associated with the Company's credit card chargebacks and refunds.

In addition to our standard registration fees, many of which are published on our www.register.com website, we have a number of different fee structures for our domain name registration services. Our Corporate Services division delivers a diversified range of generally higher-priced services for our corporate customers and also extends volume-based discounts for domain name registrations and transfers. We pay referral commissions to certain participants in our Global Partner Network and to participants in our affiliate network. Other participants in our Global Partner Network pay us a wholesale price per registration, discounted off of our standard registration fee.

We experienced a decrease in our total names under management to approximately 3.1 million as of December 31, 2003 from approximately 3.3 million as of December 31, 2002.

Other products and services, which primarily consist of email, domain name forwarding, web hosting, site submission to search engines, application processing fees for new gTLDs, intellectual property protection services related to the introduction of new gTLDs and software, and fees for modifying existing registrations, are sold either as one time offerings or through annual or monthly subscriptions, depending on the product or service. Revenues from our other products and services are recognized ratably over the period in which we provide such services. Revenues from processing fees for domain name applications, which may or may not result in domain name registrations, and other intellectual property protection services related to the introduction of new gTLDs, are recognized immediately upon the sale of the services.

Advertising revenues are derived from the sale of sponsorships and banner advertisements, typically under short-term contracts that range from one month to one year in duration. We recognize

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these revenues in the periods in which the advertisements are displayed or the required number of impressions are achieved, provided that no significant company obligation remains and collection of the resulting receivable is probable.

Cost of Revenues

Our cost of revenues consists of the costs associated with providing domain name registrations and other products and services. Cost of revenues for domain name registrations represents amortization of registry fees on a straight-line basis over the registration term, depreciation of the equipment used to process the domain name registrations, fees paid for co-location facilities housing our equipment, and fees paid to the financial institutions to process credit card payments on our behalf. Cost of revenues does not include penalties for excessive credit card chargebacks and refunds; such penalties are classified as general and administrative expense. We pay registry fees for gTLDs ranging from $5.30 per year for each .biz and ..info domain name registration to $6 per year for each .com, .net and ..org domain name registration. We pay registry fees ranging from $6 to $5,020 per year for one to ten-year country code domain name registrations. The largest component of our cost of revenues is registry fees which, while paid in full at the time the domain name is registered, are recorded as a prepaid expense and amortized to cost of revenues ratably over the terms of the registrations.

Cost of revenues for our other products and services consists of fees paid to third-party service providers, depreciation of equipment used to deliver the services, fees paid for co-location facilities housing our equipment, and fees paid to financial institutions to process credit card payments on our behalf. Cost of revenues for other products and services is recognized ratably over the periods in which the services are provided.

We have no direct cost of revenues associated with our advertising revenues and we have no incremental cost of revenues associated with delivering advertisements since we use the same equipment to deliver the advertisements as we use for our domain name registration services. Therefore, the gross profit margin on advertising revenue is 100%, and accordingly, any decrease in advertising revenue would represent a reduction of our gross profit of the same amount. We incur costs including salaries and commissions for our advertising sales staff, which are classified as operating expenses.

Operating Expenses

Our operating expenses consist of sales and marketing, research and development, general and administrative (including non-cash compensation), and amortization of intangibles. Prior to January 1, 2002 our operating expenses also included amortization of goodwill; effective January 1, 2002 we adopted SFAS 142 and ceased amortization of goodwill. Our sales and marketing expenses consist primarily of employee salaries, marketing programs such as advertising, and commissions paid to our sales representatives. Research and development expenses consist primarily of employee salaries, fees for outside consultants, software licensing fees and related costs associated with the development and integration of new products and services, enhancement of existing products and services, and quality assurance. General and administrative expenses, excluding non-cash compensation, include salaries and other personnel-related expenses for executive, financial and administrative personnel, as well as professional fees, insurance premiums, penalties for excessive credit card chargebacks and refunds, and provisions for uncollectible receivables. Facilities costs are allocated across the various operating expense categories. We account for non-cash compensation expense in accordance with Accounting Principles Board Opinion No. 25 and related interpretations. Non-cash compensation expense relates to grants of restricted stock, stock options and warrants to employees, directors, consultants and vendors with exercise prices below fair market value of the underlying stock on the date of grant. Based on such grants through December 31, 2003, we expect to record approximately $0.5 million in additional non-cash compensation expense through 2008 as follows: $0.4 million in 2004 and $0.1 million through 2008. Non-cash compensation expense will reduce our earnings or increase our losses, as applicable, in future periods.

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We review our goodwill and intangibles for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. We assess the recoverability of goodwill and intangibles using estimated undiscounted cash flows. These cash flows include an estimated terminal value based on a hypothetical sale of an acquisition at the end of the related amortization period. We also compare the total market value of our common stock with the book value of our stockholders' equity. Based on the foregoing factors, if we conclude that an other-than-temporary impairment of goodwill or intangibles has occurred, we record an impairment writedown.

Income Taxes

In preparing our financial statements, we make estimates of our current tax obligations and temporary differences resulting from timing differences for reporting items for financial statement and tax purposes, the most significant of which is deferred revenue. We recognize deferred taxes by the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized as income or expense in the period that includes the enactment date. Valuation allowances are established when appropriate, based on management's judgment, to reduce the carrying value of deferred tax assets to the amounts expected to be realized.

Net Income (Loss)

Although we were profitable for the year 2003, we were not profitable for the years 2002 or 2001. Our net loss for 2002 included a goodwill impairment writedown and amortization of intangibles of $17.0 million. Our net loss for 2001 included a goodwill impairment writedown of $32.5 million. Although we have recently taken several initiatives intended to reduce our operating expenses in 2004, we cannot assure you as to when or if these reductions will be realized. Losses at RCOM Europe and RegistryPro have contributed to a decline in our profitability. We expect losses at RCOM Europe to impact our profitability negatively through the early part of the year 2004 and perhaps beyond. We sold our RegistryPro business in February 2004 and, accordingly, we believe that RegistryPro will not have a significant negative impact on our profitability in 2004 or beyond. In addition, unless we lower our credit card refunds and reduce our level of credit card chargebacks, we may continue to be potentially liable for significant penalties from credit card associations, which would impact our profitability (see "Risk Factors" for additional information). Further, we anticipate that our revenues from advertising will be materially lower in future periods.

For all the above reasons, we cannot assure you that we will be able to operate profitably or continue to generate positive cash flow in the future.

Year 2003 compared with Year 2002

Net Revenues

Total net revenues decreased 2% to $104.3 million in 2003 from $106.3 million in 2002.

Domain name registrations.    Recognition of revenues from domain name registrations decreased 6% to $91.4 million in 2003 from $97.3 million in 2002. This decrease was due primarily to a lower number of domain names registered, and in part to lower average sale prices per year of subscription term. These reductions were offset in part by the inclusion of RCOM Europe in our results of operations for the full year in 2003 as compared to 2002, for which it was included from the date of acquisition (March 8, 2002); revenues from RCOM Europe of $10.4 million and $7.2 million were recognized in 2003 and 2002, respectively. We may face continued pricing pressure in the future, which would adversely impact our revenues and profitability.

Other Products and Services.    Revenues from other products and services increased 85% to $8.9 million in 2003 from $4.8 million in 2002. The largest component of the increased revenues in this category was email services.

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At December 31, 2003, our deferred revenue balance was $86.9 million, compared with $87.1 million at December 31, 2002, representing a decrease of $0.2 million for the year 2002. Our deferred revenue balance is an indicator of revenue to be recognized in future periods.

Advertising.    Revenues from advertising decreased 4% to $4.0 million in 2003 from $4.2 million in 2002. From the fourth quarter of 2002 through the third quarter of 2003, our largest advertising customer, a provider of web-hosting services, had accounted for approximately $1.0 million of advertising revenues per quarter. However in the fourth quarter of 2003 we began to offer web-hosting services to our own customers, and decided to discontinue this advertising relationship. Accordingly, we did not sell advertising to this customer in the fourth quarter of 2003 and we do not expect to sell advertising to this customer in future periods. Accordingly, we anticipate that our annualized advertising revenue will decline by approximately $4.0 million unless we can increase our advertising sales to other customers. Our sales of web-hosting services directly to our own customers are classified as revenues from other products and services.

Cost of Revenues

Total cost of revenues decreased 7% to $32.7 million in 2003 from $35.3 million in 2002.

Cost of Domain Name Registrations.    Costs recognized for domain name registrations decreased 11% to $30.7 million in 2003 from $34.3 million in 2002. The decrease resulted primarily from a lower number of domain names registered in 2003 and a reduction of data center operations expenses.

Cost of Other Products and Services.    Cost of other products and services increased 44% to $2.0 million in 2003 from $1.0 million in 2002 in part as a result of increased revenues from other products and services in 2003 (primarily email services), and in part because in 2002 we had received a $0.4 million refund from the .biz registry as a result of that registry's decision to cancel certain .biz applications.

Gross Profit Margin

Our gross profit margin increased to 68.7% in 2003 from 66.8% in 2002, primarily as a result of lower costs of our data center operations, and in part due to increases in revenues from other products and services, which have a higher gross profit margin than domain name registration services.

Operating Expenses

Total operating expenses decreased 18% to $72.2 million in 2003 from $88.2 million in 2002.

Sales and Marketing.    Sales and marketing expenses decreased 16% to $26.2 million in 2003 from $31.2 million in 2002. The decrease was primarily due to reductions in online and off-line media spending. We anticipate that our marketing expense will increase significantly in 2004.

Research and Development.    Research and development expenses increased 39% to $18.6 million in 2003 from $13.4 million in 2002. The increase resulted primarily from higher salaries and consulting fees for personnel working to improve our systems and operations. We anticipate that research and development expenses will continue to remain high during the first half of 2004, and perhaps beyond, as we continue our efforts to upgrade and improve our systems.

General and Administrative.    General and administrative expenses increased 2% to $26.9 million in 2003 from $26.3 million in 2002. The increase was primarily due to $6.8 million of advisory fees and expenses incurred in 2003 in connection with our consideration of various strategic alternatives following the unsolicited acquisition proposals we received in early 2003 and in connection with the self-tender offer for $120 million of our common stock and warrants completed in September 2003. This was partially offset by lower accruals for potential credit card penalties ($2.4 million in 2003 versus $4.5 million in 2002), a decline of approximately $2 million in bad debt expense as a result of improved collection efforts which reduced the level of past-due receivables and the required reserves for potentially uncollectible receivables, and a decline of $0.9 million in amortization of noncash compensation.

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As of December 31, 2003 our balance sheet reflected an accrued liability of $6.1 million for potential credit card penalties, which represents our estimate of the maximum potential penalties that could be imposed under one credit card association's rules for chargebacks and/or refunds in excess of certain thresholds. For additional information in connection with potential credit card penalties, see "Risk Factors" and Note 14 to Consolidated Financial Statements, "Commitments and Contingencies — Credit Card Penalties."

Amortization and Writedown of Goodwill and Other Intangibles.    Amortization of intangibles was $0.6 million in 2003 compared with amortization and writedown of goodwill and other intangibles of $17.3 million in 2002. In September 2002, we made a decision to abandon the Afternic business. As a consequence of that decision, as well as negative industry and economic trends affecting us and the general decline in technology company valuations, including the valuation of our common stock, we performed an impairment analysis of the goodwill and intangible assets recorded in connection with our various acquisitions. Because the total market value of our common stock at September 30, 2002 was lower than the book value of our stockholders' equity, we recorded a goodwill impairment loss of $17.0 million in September 2002. Also, in accordance with SFAS 142, we ceased amortization of goodwill effective January 1, 2002.

Other Income, Net

Other income, net, which consisted primarily of interest income, net of interest expense, decreased to $3.0 million in 2003 from $5.6 million in 2002. The decrease was primarily due to lower prevailing interest rates and in part to a reduction of $120 million in our investment portfolio in connection with our self-tender offer for $120 million of our common stock and warrants completed in September 2003.

Provision for Income Taxes

The provision for income taxes in 2003 was $0.1 million, representing an effective rate of 4% of pre-tax income. This lower-than-statutory effective tax rate (43%) resulted primarily from our receipt of tax-free interest income on our investment portfolio. The provision for income taxes in 2002 was a benefit of $1.2 million, representing an effective tax rate of 11% of the pre-tax loss. This lower-than-statutory effective tax benefit resulted primarily from the fact that only a portion of the goodwill impairment writedown was tax deductible, and in part because no tax benefits were recorded in connection with losses generated by RCOM Europe, as realization was not assured.

Earnings Per Share — Weighted average number of shares

The weighted average number of shares outstanding for the year 2003 was 35,701,000 shares (basic) and 37,662,000 shares (diluted). As a result of our completion in September 2003 of our $120 million self-tender offer, in which we purchased 17,910,347 shares of our common stock and warrants to purchase 987,283 shares of our common stock (based on the conversion of warrants on a cashless basis at the $6.35 per share offer price), the weighted average number of shares declined in the fourth quarter of 2003. The lower number of shares outstanding will have the effect of increasing net income (loss) per share in future periods; however, interest income on our available cash and investment balances will be lower.

Year 2002 compared with Year 2001

Net Revenues

Total net revenues decreased 9% to $106.3 million in 2002 from $116.3 million in 2001.

Domain name registrations.    Recognition of revenues from domain name registrations decreased 4% to $97.3 million in 2002 from $101.4 million in 2001. This decrease was due in part to lower average prices and a longer dollar-weighted-average subscription term for domain names registered in 2002 compared with 2001, and in part to a writeoff related to credit card receivables in 2002. These reductions were offset in part by the inclusion of RCOM Europe in our results of operations after March 8, 2002, for which revenues of $7.2 million were recognized in 2002. We may face continued pricing pressure.

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At December 31, 2002, we had $87.1 million of deferred revenue compared with $77.4 million at December 31, 2001, representing an increase of $9.7 million for the year 2002. The increase was due primarily to the acquisition of RCOM Europe on March 8, 2002, whose balance sheet included deferred revenue of $6.9 million at the date of acquisition. Our deferred revenue balance is an indicator of revenue to be recognized in future periods.

Other Products and Services.    Revenues from other products and services decreased 13% to $4.8 million in 2002 from $5.5 million in 2001. The decrease was due primarily to the non-recurrence in 2002 of $2.9 million of revenues received during 2001 from sales of intellectual property services in connection with the launch of new gTLDs, offset in part by increased sales in 2002 of email and WebSiteNOW! services.

Advertising.    Revenues from advertising decreased 54% to $4.2 million in 2002 from $9.4 million in 2001, primarily as a result of softness in the Internet advertising market.

Cost of Revenues

Total cost of revenues increased 1% to $35.3 million in 2002 from $34.8 million in 2001.

Cost of Domain Name Registrations.    Costs recognized for domain name registrations increased 3% to $34.3 million in 2002 from $33.3 million in 2001. The increase was due to the inclusion of RCOM Europe in our results of operations after March 8, 2002, for which costs of $2.4 million were recognized in 2002, more than offsetting the decreased cost of domain name registrations that resulted from lower registration revenues recognized in 2002.

Cost of Other Products and Services.     Cost of other products and services declined to $1.0 million in 2002 from $1.5 million, primarily because 2001 included $1.2 million of costs related to sales of intellectual property services in connection with the launch of new gTLDs, which did not recur in 2002.

Gross Profit Margin

Our gross profit margin declined to 66.8% in 2002 from 70.1% in 2001, in part due to lower advertising revenues, in part to lower average prices and in part to fixed costs for depreciation and data center operations which comprised a higher percentage of the lower level of revenues.

Operating Expenses

Total operating expenses decreased 13% to $88.2 million in 2002 from $101.3 million in 2001.

Sales and Marketing.    Sales and marketing expenses decreased 7% to $31.2 million in 2002 from $33.5 million in 2001. The decrease was primarily due to lower expenses related to media advertising, direct mail and other promotional activities, offset in part by the inclusion of RCOM Europe in our results of operations after March 8, 2002.

Research and Development.    Research and development expenses increased 74% to $13.4 million in 2002 from $7.7 million in 2001. The increase resulted primarily from higher salaries and consulting fees for personnel working to improve our systems and operations, and in part from increased costs for software licenses.

General and Administrative.    General and administrative expenses increased 78% to $26.3 million in 2002 from $14.8 million in 2001. The higher expense level was due to (i) an increase of $4.3 million in credit card penalties as a result of excessive chargebacks and refunds, of which $0.8 million was paid and $3.7 million was accrued to cover our estimate of potential penalties which could be imposed for 2002 under one card association's rules, (ii) the inclusion of $3.4 million of expenses for RCOM Europe which was acquired March 8, 2002, (iii) an increase of $1.3 million in bad debt expense, (iv) the costs of operating our customer service center in Canada which commenced operations in the third quarter of 2001, and (v) startup costs of $1.0 million for RegistryPro. For additional information in connection with credit card penalties, see "Risk Factors" and Note 14 to Consolidated Financial Statements "Contingencies and Commitments — Credit Card Penalties".

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Amortization and Writedown of Goodwill and Other Intangibles.    Amortization and writedown of goodwill and other intangibles was $17.3 million in 2002 compared with $45.3 million in 2001. During 2001 we recorded a goodwill impairment writedown of $32.5 million related to Afternic, which was acquired in September 2000. In September 2002, we made a decision to abandon the Afternic business. As a consequence of that decision, as well as negative industry and economic trends affecting us and the general decline in technology company valuations, including the valuation of our common stock, we performed an impairment analysis of the goodwill and intangible assets recorded in connection with its various acquisitions. Because the total market value of our common stock at September 30, 2002 was lower than the book value of its stockholders' equity, we recorded a goodwill impairment loss of $17 million in September 2002. Also in accordance with SFAS 142, we ceased amortization of goodwill effective January 1, 2002.

Other Income, Net

Other income, net, which consisted primarily of interest income, net of interest expense, decreased to $5.6 million in 2002 from $8.7 million in 2001. The decrease was primarily due to lower prevailing interest rates in 2002.

Provision for Income Taxes

The provision for income taxes in 2002 was a benefit of $1.2 million, representing an effective tax rate of 11% of the pre-tax loss. That effective tax rate was lower than the statutory rate of 43% in part because only a portion of the goodwill impairment writedown is tax-deductible, in part because no tax benefits were recorded in connection with losses generated by RCOM Europe in the United Kingdom as realization is not assured, and in part because a substantial portion of our interest income is exempt from taxes. In 2001, the provision for income taxes was an expense of $10.4 million, rather than a benefit, because goodwill amortization and the impairment writedown recorded in 2001 were not tax-deductible.

Quarterly Results of Operations

The following table sets forth selected unaudited quarterly statement of operations data, in dollar amounts and as percentages of net revenue, for the eight quarters ended December 31, 2003. In our opinion this information has been prepared on substantially the same basis as the audited financial statements appearing elsewhere in this annual report, and all necessary adjustments, consisting only of normal recurring adjustments, have been included in order to present fairly the unaudited quarterly results of operations data. The quarterly data should be read in conjunction with our annual financial statements and related notes appearing elsewhere in this annual report. The operating results for any quarter are not necessarily indicative of results for any future period.

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				Quarter Ended
				December 31, 2003				September 30, 2003				June 30, 2003				March 31, 2003				December 31, 2002				September 30, 2002				June 30, 2002				March 31, 2002
				(in thousands, except per share amounts)
Net revenues				$	25,313			$	25,749			$	26,167			$	27,090			$	26,531			$	25,490			$	26,967			$	27,300
Cost of revenues					8,085				7,748				8,570				8,291				9,207				8,182				9,157				8,753
Gross profit					17,228				18,001				17,597				18,799				17,324				17,308				17,810				18,547
Operating expenses:
Sales and marketing					6,825				6,098				6,599				6,647				7,424				7,270				8,294				8,234
Research and development					5,466				5,079				4,169				3,901				3,985				3,897				3,157				2,318
General and administrative (including non-cash compensation of $288, $285, $287, $188, $521, $492, $469, and $455, respectively)					4,542				4,877				11,354				6,092				7,619				10,030				4,799				3,864
Amortization and writedown of goodwill and other intangibles					145				137				135				134				134				17,003				123				30
Total operating expenses					16,978				16,191				22,257				16,774				19,162				38,200				16,373				14,446
Income (loss) from operations					250				1,810				(4,660	)			2,025				(1,838	)			(20,892	)			1,437				4,101
Other income (expense), net					440				771				899				879				1,351				1,174				1,473				1,590
Income (loss) before provision (benefit) for income taxes					690				2,581				(3,761	)			2,904				(487	)			(19,718	)			2,910				5,691
Provision (benefit) for income taxes					(197	)			158				(765	)			894				(140	)			(5,155	)			2,063				2,037
Net income (loss)				$	887			$	2,423			$	(2,996	)		$	2,010			$	(347	)		$	(14,563	)		$	847			$	3,654
Basic (loss) income per share				$	0.04			$	0.06			$	(0.07	)		$	0.05			$	(0.01	)		$	(0.36	)		$	0.02			$	0.09
Diluted (loss) income per share				$	0.04			$	0.06			$	(0.07	)		$	0.05			$	(0.01	)		$	(0.36	)		$	0.02			$	0.08
Weighted average number of shares outstanding:
Basic					23,519				37,426				40,991				40,685				40,057				40,049				39,530				38,572
Diluted					25,311				38,927				40,991				43,286				40,057				40,049				43,544				44,175

				Quarter Ended
				December 31, 2003				September 30, 2003				June 30, 2003				March 31, 2003				December 31, 2002				September 30, 2002				June 30, 2002				March 31, 2002
Net revenues					100	%			100	%			100	%			100	%			100	%			100	%			100	%			100	%
Cost of revenues					32				30				33				31				35				32				34				32
Gross profit					68				70				67				69				65				68				66				68
Operating costs and expenses
Sales and marketing					27				24				25				25				28				29				31				30
Research and development					22				20				16				14				15				15				12				9
General and administrative (including non-cash compensation)					18				19				43				22				29				39				18				14
Amortization and writedown of goodwill and other intangibles					—				—				1				—				—				67				—				—
Total operating costs and expenses					67				63				85				61				72				150				61				53
Income (loss) from operations					1				7				(18	)			8				(7	)			(82	)			5				15
Other income (expenses), net					2				3				3				3				5				5				6				6
Income (loss) before provision (benefit) for income taxes					3				10				(15	)			11				(2	)			(77	)			11				21
Provision (benefit) for income Taxes					1				1				(3	)			3				(1	)			(20	)			8				8
Net income (loss)					4	%			9	%			(12	)%			8	%			(1	)%			(57	)%			3	%			13	%

Recent accounting pronouncements

SFAS 146 "Accounting for Costs Associated with Exit or Disposal Activities" was issued in June 2002, and requires that costs associated with exit or disposal activities be recognized when the liability is incurred, rather than at the date of commitment to an exit or disposal plan. Examples of covered costs are lease termination and certain employee severance. SFAS 146 is applicable to exit or disposal activities initiated after December 31, 2002.

SFAS 148 "Accounting for Stock-Based Compensation — Transition and Disclosure — an amendment of FAS 123" was issued in December 2002, providing for alternative methods of transition for a voluntary change to the fair market value based method of accounting for stock-based employee compensation.

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Liquidity and Capital Resources

Historically, we have funded our operations and met our capital expenditure requirements primarily through cash generated from operations, sales of equity securities and borrowings. We issued 5,222,279 shares of our common stock to the public on March 3, 2000, which enabled us to raise approximately $115.3 million in cash after deducting underwriting discount and other offering expenses. In September 2003, we used $120 million of our cash, short-term investments and marketable securities to complete a self-tender offer in which we purchased 17,910,347 shares of our common stock and warrants to purchase 987,283 shares of our common stock (based on the conversion of warrants on a cashless basis at the $6.35 per share offer price).

During 2003, our cash and cash equivalents, short-term investments and marketable securities declined by $122.4 million, primarily as a result of our generation of $10.9 million of cash from operations in 2003, offset by $120 million which we used for the self-tender offer, $10.6 million to retire notes payable issued in connection with our acquisition of RCOM Europe, and $4 million for capital expenditures. In 2002 we generated $16.1 million of cash from operations, and we used $3.2 million for capital expenditures.

We currently anticipate that our operating expenses will continue to represent a material use of our cash resources and we expect our expenses for research and development to increase during the first half of 2004 and perhaps beyond, and we expect our sales and marketing expense to increase for the full year 2004 and perhaps beyond. We believe that our current balance of cash, short-term investments and marketable securities together with anticipated cash to be provided from operations will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months. However, as a result of the consummation of our $120 million self-tender offer in September 2003, when compared to our financial position prior to the self-tender, we have significantly reduced our cash position and our future interest income, reduced our ability to engage in significant transactions without additional debt or equity financing, reduced our ability to cover existing contingent or other future liabilities, and potentially negatively impacted our liquidity during future periods of increased capital requirements or operating expenses.

Under a prior registry agreement with ICANN, we had committed to provide up to $8.5 million in funding and other non-cash contributions to our subsidiary, RegistryPro, for its activities in establishing, operating and marketing the .pro top level domain. Effective February 26, 2004, we sold the core assets of the RegistryPro business and ICANN agreed to the assignment of the registry agreement to the purchaser. Through December 31, 2003 we had contributed approximately $4.1 million in cash, of which $2.6 million was funded during 2003, and we had also made non-cash contributions which we have valued at approximately $2.4 million. In addition, the purchaser has agreed to assume $2.0 million of this $8.5 million commitment. Accordingly, we believe that we have satisfied our funding commitment in full, as well as our other obligations under the registry agreement, although we have not obtained a release of these obligations from ICANN.

A summary of our contractual obligations for operating leases and other commitments as of December 31, 2003 is as follows:

				Payments Due by Period
				Total				Less than 1 Year				2-3 Years				4-5 Years				More than 5 Years
				(in thousands)
Operating lease obligations				$	6,276			$	1,353			$	2,361			$	1,767			$	795
Purchase obligations(1)					3,646				1,654				1,705				284				3
Total				$	9,922			$	3,007			$	4,066			$	2,051			$	798

(1)

Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed minimum quantities to be purchased: fixed, minimum or variable pricing provisions; and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancelable without penalty.

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The Board of Directors had previously authorized a repurchase program for up to $10.0 million of our Common Stock through October 2004, and we had purchased 370,100 shares for a total of $1.6 million through December 31, 2002 under this program. In September 2003, we completed a $120 million self-tender offer of our outstanding common stock and warrants. We will not repurchase additional shares or our common stock unless the Board of Directors authorizes a new repurchase program.

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

Our exposure to market risk is primarily related to interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. We believe that we are not subject to a material interest rate risk because substantially all of our investments are in fixed-rate, short-term securities having a maturity of not more than two years, with a majority having a maturity of less than one year. Accordingly, the fair value of our investment portfolio would not be significantly impacted by a 100 basis point increase or decrease in interest rates. From time to time we also invest in publicly traded stocks, and we are subject to market price risk with respect to such investments. At December 31, 2003 the fair value of our investments in publicly traded stocks was $0.5 million. We did not have any foreign currency hedging or derivative instruments at December 31, 2003.

We generally do not enter into financial instruments for trading or speculative purposes and do not currently utilize derivative financial instruments. While we have no present intention of utilizing derivative financial instruments in the future, it is possible that we may enter into such transactions or similar transactions. At December 31, 2003 we had no long-term debt.

Our consolidated financial statements are denominated in U.S. dollars. We derived 10% of our net revenues in 2003 from operations outside of the United States. We face foreign currency risks in part because our European subsidiaries receive revenues in local currencies, and in part because the expenses of our customer service center are paid in Canadian dollars. Our European subsidiaries incur most of their expenses in their local currencies, which in part offsets our foreign currency risk related to European revenues received in local currencies. Our European subsidiaries use the local currency as their functional currency. Because the financial results of our foreign subsidiaries are translated into U.S. dollars for consolidation, as exchange rates vary, such financial results may vary from expectations and may adversely impact our operating results and our net income (loss).

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Item 8.    Financial Statements and Supplementary Data.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

				Page
Report of PricewaterhouseCoopers LLP, Independent Auditors					45
Consolidated Balance Sheets as of December 31, 2003 and 2002					46
Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001					47
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2003, 2002 and 2001					48
Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001					49
Notes to Consolidated Financial Statements					50

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REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders of Register.com, Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of stockholders' equity and of cash flows present fairly, in all material respects, the financial position of Register.com, Inc. at December 31, 2003 and 2002, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which 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, 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.

As discussed in Note 2 to the Consolidated Financial Statements, effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets".

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
February 6, 2004

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REGISTER.COM, INC.

CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

				December 31,
				2003				2002
Assets:
Current Assets:
Cash and cash equivalents				$	52,991			$	50,557
Short-term investments					39,043				105,283
Accounts receivable, less allowance of $1,850 and $2,695, respectively					6,505				8,453
Prepaid domain name registry fees					14,477				15,457
Deferred tax asset, net					24,927				23,052
Other current assets					2,388				3,303
Total current assets					140,331				206,105
Fixed assets, net					8,363				8,450
Prepaid domain name registry fees, net of current portion					9,856				7,131
Other investments					396				396
Marketable securities					2,527				61,205
Goodwill and other intangible assets, net					1,952				2,317
Total assets				$	163,425			$	285,604
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable and accrued expenses				$	16,214			$	15,227
Deferred revenue, net					53,728				55,617
Acquisition note payable					—				9,625
Total current liabilities					69,942				80,469
Deferred revenue, net of current portion					33,191				31,493
Total liabilities					103,133				111,962
Commitments and contingencies
Stockholders' equity:
Preferred stock—$.0001 par value, 5,000,000 shares authorized; none issued and outstanding at December 31, 2003 and 2002					—				—
Common stock—$.0001 par value, 200,000,000 shares authorized; 23,536,801 and 40,624,502 shares issued and outstanding at December 31, 2003 and December 31, 2002, respectively					2				4
Additional paid-in capital					100,228				216,713
Unearned compensation					(528	)			(1,376	)
Accumulated other comprehensive income					2,144				2,179
Accumulated deficit					(41,554	)			(43,878	)
Total stockholders' equity					60,292				173,642
Total liabilities and stockholders' equity				$	163,425			$	285,604

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

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REGISTER.COM, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

				Year ended December 31,
				2003				2002				2001
Net revenues				$	104,319			$	106,288			$	116,281
Cost of revenues					32,694				35,299				34,790
Gross profit					71,625				70,989				81,491
Operating expenses:
Sales and marketing					26,169				31,222				33,532
Research and development					18,615				13,357				7,741
General and administrative (including non-cash compensation of $1,048, $1,937, and $1,771, respectively)					26,865				26,312				14,769
Amortization and writedown of goodwill and other intangibles					551				17,290				45,299
Total operating expenses					72,200				88,181				101,341
(Loss) from operations					(575	)			(17,192	)			(19,850	)
Other income (expense), net					2,989				5,588				8,664
Income (loss) before provision for income taxes					2,414				(11,604	)			(11,186	)
Provision (benefit) for income taxes					90				(1,195	)			10,401
Net income (loss)					2,324				(10,409	)			(21,587	)
Other comprehensive income (loss):
Unrealized (loss) gain on marketable securities					(693	)			(595	)			1,002
Gain on foreign currency translation					658				1,388				—
Comprehensive income (loss)				$	2,289			$	(9,616	)		$	(20,585	)
Basic income (loss) earnings per share				$	0.07			$	(0.26	)		$	(0.58	)
Diluted income (loss) earnings per share				$	0.06			$	(0.26	)		$	(0.58	)
Weighted average number of shares outstanding:
Basic					35,701				40,046				37,424
Diluted					37,662				40,046				37,424

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

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REGISTER.COM, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(in thousands, except share data)

				Series A Convertible Preferred Stock								Common Stock
				Shares				Amount				Shares				Amount				Additional Paid-in Capital				Unearned Compen- sation				Accumulated other comprehensive income				Accumu- lated Deficit				Total
Balance at January 1, 2001					—				—				36,823,281			$	4			$	204,677			$	(4,288	)		$	384			$	(11,882	)		$	188,895
Issuance of shares for the Employee Stock Purchase Plan					—				—				66,774				—				399				—				—				—				399
Amortization of unearned compensation					—				—				—				—				(10	)			1,771				—				—				1,761
Exercise of stock options, inclusive of related tax benefit					—				—				794,011				—				4,905				—				—				—				4,905
Exercise of warrants					—				—				570,428				—				208				—				—				—				208
Issuance of restricted stock					—				—				42,087				—				500				(490	)			—				—				10
Net unrealized holding gain in marketable securities					—				—				—				—				—				—				1,002				—				1,002
Net income (loss)					—				—				—				—				—				—				—				(21,587	)			(21,587	)
Balance at December 31, 2001					—				—				38,296,581				4				210,679				(3,007	)			1,386				(33,469	)			175,593
Issuance of shares for the Employee Stock Purchase Plan					—				—				62,470				—				349				—				—				—				349
Amortization of unearned compensation					—				—				—				—				—				1,937				—				—				1,937
Exercise of stock options, inclusive of related tax benefit					—				—				1,537,899				—				6,969				—				—				—				6,969
Exercise of warrants					—				—				1,063,406				—				42				—				—				—				42
Issuance of restricted stock					—				—				34,246				—				306				(306	)			—				—				—
Repurchase and retirement of treasury stock					—				—				(370,100	)			—				(1,632	)			—				—				—				(1,632	)
Other comprehensive income:
Net unrealized holding loss on marketable securities					—				—				—				—				—				—				(595	)			—				(595	)
Foreign currency translation					—				—				—				—				—				—				1,388				—				1,388
Net income (loss)					—				—								—				—				—				—				(10,409	)			(10,409	)
Balance at December 31, 2002					—				—				40,624,502				4				216,713				(1,376	)			2,179				(43,878	)			173,642
Issuance of shares for the Employee Stock Purchase Plan					—				—				62,900				—				207				—				—				—				207
Amortization of unearned compensation					—				—				—				—				—				1,048				—				—				1,048
Exercise of stock options, inclusive of related tax benefit					—				—				338,731				—				3,132				—				—				—				3,132
Exercise of warrants					—				—				388,622				—				1				—				—				—				1
Issuance of restricted stock					—				—				37,951				—				200				(200	)			—				—				—
Repurchase and Retirement of common stock					—				—				(17,915,905	)			(2	)			(120,025	)			—				—				—				(120,027	)
Other comprehensive income:
Net unrealized holding loss on marketable securities					—				—				—				—				—				—				(693	)			—				(693	)
Foreign currency translation					—				—				—				—				—				—				658				—				658
Net income (loss)					—				—				—				—				—				—				—				2,324				2,324
Balance at December 31, 2003					—				—				23,536,801			$	2			$	100,228			$	(528	)		$	2,144			$	(41,554	)		$	60,292

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

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REGISTER.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

				Year ended December 31,
				2003				2002				2001
Cash flows from operating activities
Net income (loss)				$	2,324			$	(10,409	)		$	(21,587	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Deferred revenues					(1,029	)			1,864				(11,138	)
Depreciation, amortization and writedown of goodwill and other intangible assets					4,844				21,802				48,829
Compensatory stock options and warrants expense					1,048				1,631				1,771
Deferred income taxes					(1,875	)			(4,637	)			2,339
Tax benefit from exercise of employee stock options					2,723				1,061				4,424
Changes in assets and liabilities affecting operating cash flows, net of acquisitions:
Accounts receivable					2,222				6,190				(5,280	)
Prepaid domain name registry fees					(1,498	)			(638	)			2,715
Prepaid income taxes					—				—				3,774
Other current assets					1,090				2,730				(2,209	)
Accounts payable and accrued expenses					1,004				(3,447	)			612
Net cash provided by operating activities					10,853				16,147				24,250
Cash flows from investing activities
Capital expenditures					(4,026	)			(3,247	)			(2,195	)
Purchases of investments					(410,414	)			(300,185	)			(139,830	)
Maturities of investments					535,236				270,416				118,463
Acquisitions, net					—				(9,359	)			—
Net cash provided (used) by investing activities					120,796				(42,375	)			(23,562	)
Cash flows from financing activities
Issuance of notes payable					—				8,552				—
Repayment of notes payable					(10,585	)			(219	)			—
Net proceeds from issuance of common stock and warrants					592				6,605				1,088
Retirement of common stock					(120,000	)			(1,632	)			—
Net cash (used) provided by financing activities					(129,993	)			13,306				1,088
Effect of exchange rate changes on cash					778				1,547				—
Net increase (decrease) in cash and cash equivalents					2,434				(11,375	)			1,776
Cash and cash equivalents at beginning of period					50,557				61,932				60,156
Cash and cash equivalents at end of period				$	52,991			$	50,557			$	61,932
Supplemental disclosure of cash flow information:
Cash paid for interest				$	77			$	123			$	—
Cash paid for income taxes				$	130			$	1,731			$	—

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

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REGISTER.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    Nature of Business and Organization

Nature of Business

Register.com, Inc., together with its wholly owned subsidiaries (the "Company" or "Register.com"), provides Internet domain name registration and other online products and services such as web-site creation tools, email, domain name forwarding and advertising.

The Company is an ICANN-accredited registrar of domain names. ICANN is an independent non-profit organization selected by the U.S. Department of Commerce to manage and oversee the domain name system.

In March 2000, the Company completed an initial public offering of 5,222,279 shares of its common stock and received net proceeds of $115.3 million (see Note 6).

In June 2000, the Company acquired Inabox, Inc., a developer of website creation software. In September 2000, the Company acquired Afternic.com, Inc., a secondary market exchange for domain names. In March 2002, the Company acquired Virtual Internet plc, which provides domain name registrations and online intellectual property management and protection services. See Note 13 for additional information.

2.    Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Register.com, Inc. (the "Company") and its wholly owned subsidiaries. Intercompany balances and transactions have been eliminated.

Cash equivalents

The Company considers all highly liquid investments purchased with an initial maturity of 90 days or less to be cash equivalents. The Company maintains its cash balances in highly rated financial institutions. At times, such cash balances exceed the Federal Deposit Insurance Corporation limit. The Company has pledged $3.1 million and $7.7 million of its cash as of December 31, 2003 and 2002, respectively, as security deposits, primarily to support outstanding letters of credit.

Investments

The Company classifies its investments in debt securities as marketable securities in accordance with the provisions of Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities." These securities are carried at fair market value, with unrealized gains and losses reported in stockholders' equity as a component of other comprehensive income (loss). Gains or losses on securities sold are based on the specific identification method.

Securities with maturities of less than one year are classified as current, and securities with maturities of greater than one year are classified as non-current.

Fixed assets

Depreciation and amortization is calculated using the straight-line method. Estimated useful lives are as follows: capitalized computer software — three years; equipment, furniture and fixtures — three to five years; buildings — fifty years; leasehold improvements — shorter of the estimated useful life of each improvement or the lease term. The costs of additions and improvements are capitalized, and repairs and maintenance costs are charged to operations as incurred.

Revenue recognition

The Company's revenues are primarily derived from domain name registration fees, other products and services, and advertising.

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Domain name registration fees

Registration fees charged to end-users for registration services are recognized on a straight-line basis over the registration term. A majority of end-user subscribers pay for services with credit cards for which the Company receives remittances from the credit card associations, generally within two business days after the sale transaction. A provision for estimated refunds to customers and chargebacks from customers is recorded as a reduction of deferred revenue and accounts receivable. For many of our corporate customers who register domain names through our Corporate Services division and participants in our Global Partner Network, we establish lines of credit based on credit worthiness. Referral commissions earned by participants in our Global Partner Network are deducted from gross registration revenue for presentation in our financial statements.

Other products and services

Revenue from other products and services is recognized on a straight-line basis over the period in which services are provided. Payments received in advance of services rendered are included in deferred revenue.

Advertising

Advertising revenues are derived principally from short-term advertising contracts. Advertising revenues are recognized in the periods in which the advertisements are displayed or the required number of impressions are achieved, provided that no significant Company obligation remains and collection of the resulting receivable is probable.

Deferred revenue

Deferred revenue represents the unearned portion of payments received and invoices rendered, net of provisions for estimated refunds to customers and chargebacks from customers, and referral commissions for certain Global Partner Network partners.

Prepaid domain name registry fees

Prepaid domain name registry fees represent advance payments to registries for domain name registrations. Registry fees are amortized to expense on a straight-line basis over the terms of the registrations.

Research and development and software development costs

Research and development costs are charged to expense as incurred. Software development costs incurred subsequent to the establishment of technological feasibility and prior to the general release of the product or service to the public, are capitalized and amortized to cost of revenues over the estimated useful life of the related product or service. Software development costs capitalized during the years 2003 and 2002 totaled $2.4 million and $1.6 million, respectively.

Advertising costs

Advertising costs include media advertising, direct mail and other promotional activities, and are charged to expense as incurred. Advertising expense was $7.4 million, $11.9 million, and $15.5 million for the years 2003, 2002 and 2001, respectively.

Income taxes

The Company recognizes deferred income taxes by the asset and liability method, based on differences between the financial statement and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect of a change in tax rates on deferred taxes is recognized in income in the period of the enactment date. In addition, valuation allowances are established when appropriate to reduce deferred tax assets to the amounts expected to be realized.

Fair value of financial instruments

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate fair value because of the relatively short-term nature of these instruments.

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Concentration of credit risk

Concentration of credit risk associated with accounts receivable is limited due to the large number of customers, as well as their dispersion across various industries and geographic areas. No single customer comprised more than 5% of our gross accounts receivable balance as of December 31, 2003. The Company has no derivative financial instruments.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's most significant estimates relate to potential refunds to customers and chargebacks from customers; the realizability of accounts receivable, fixed assets, intangible assets, and deferred tax assets; the potential liability to credit card associations for penalties for credit card chargebacks and refunds in excess of certain thresholds; potential liability for various matters in litigation; and the estimated useful lives of fixed assets and intangible assets. Actual results could differ from management's estimates. The markets for the Company's products and services are characterized by intense competition, continual technology advances and new product/service introductions, all of which could impact the future realizability of the Company's assets.

Stock based compensation

The Company accounts for stock-based compensation in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," ("APB 25") and related interpretations. The Company provides the disclosures required by SFAS 123, "Accounting for Stock-Based Compensation."

The Company's stock-based incentive plans are more fully described in Note 8. The following table illustrates the effect on the Company's net income (loss) and net income (loss) per share had compensation cost for stock-based incentive plans been determined in accordance with the fair value based method of accounting for stock-based compensation as prescribed by SFAS 123. Since option grants awarded during 2003, 2002 and 2001 vest over several years and additional awards are expected to be issued in the future, the pro forma results shown below are not likely to be representative of the effects on future years of the application of the fair value based method.

				Year ended December 31,
				2003				2002				2001
				(in thousands, except per share data)
Net income (loss):
As reported				$	2,324			$	(10,409	)		$	(21,587	)
Add: Stock-based employee compensation included in reported net income					1,048				1,937				1,771
Deduct: Total stock-based employee compensation expense determined under the fair value based method					(4,193	)			(3,650	)			(5,157	)
Pro forma				$	(821	)		$	(12,122	)		$	(24,973	)
Net income (loss) per share:
As reported — diluted				$	0.06			$	(0.26	)		$	(0.58	)
Pro forma — diluted				$	(0.02	)		$	(0.30	)		$	(0.67	)

Other disclosures required by SFAS 123 have been included in Note 8.

Net income (loss) per share

The Company calculates earnings per share in accordance with SFAS 128, "Earnings Per Share."

Basic earnings per share ("Basic EPS") is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period.

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Diluted earnings per share ("Diluted EPS") gives effect to all dilutive potential common shares outstanding during a period. In computing Diluted EPS, the treasury stock method is used in determining the number of shares assumed to be purchased from the proceeds of exercises of options and warrants. Details of the calculations of net income (loss) per share are as follows:

				Year Ended December 31,
				2003				2002				2001
				(in thousands, except per share amounts)
Net income (loss) per share — basic:
Net income (loss) available to common shareholders				$	2,324			$	(10,409	)		$	(21,587	)
Weighted average shares — basic					35,701				40,046				37,424
Net income (loss) per share — basic				$	0.07			$	(0.26	)		$	(0.58	)
Net income (loss) per share — diluted:
Net income (loss)				$	2,324			$	(10,409	)		$	(21,587	)
Weighted average shares outstanding — basic					35,701				40,046				37,424
Diluted effect of stock options					264				606				2,292
Diluted effect of warrants					1,697				2,193				4,791
Weighted average shares — diluted					37,662				42,845				44,507
Net income (loss) per share — diluted				$	0.06					*				*

*	Inclusion of common stock equivalent shares would result in an anti-dilutive net loss per share. As a result, diluted net loss per share is the same as basic net loss per share.

Weighted average number of shares

The weighted average number of shares outstanding for the year 2003 was 35,701,000 shares (basic) and 37,662,000 shares (diluted). As a result of the completion in September 2003 of the Company's $120 million self-tender offer, in which the Company purchased 17,910,347 shares of its common stock and warrants to purchase 987,283 shares of its common stock (based on the conversion of such warrants on a cashless basis at the $6.35 per share offer price), the weighted average number of shares has declined. The lower weighted average number of shares will have the effect of increasing net income (loss) per share in future periods.

Comprehensive income (loss)

The Company follows SFAS 130, "Reporting Comprehensive Income." Items of comprehensive income must be classified by their nature in the financial statements, with accumulated balances shown separately.

Comprehensive income was $41,000 less than net income for the year 2003, representing a net unrealized loss on marketable securities of $693,000 offset in part by an unrealized gain on foreign currency translation of $652,000.

Segment and geographic reporting

The Company follows SFAS 131, "Disclosures about Segments of an Enterprise and Related Information", which established standards for reporting operating segments in annual financial statements, and related disclosures about products and services, geographic areas and major customers. The Company operates in one business segment. Revenues and long-lived assets outside of the United States are not deemed material, therefore no separate disclosure by geographic region is provided.

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Goodwill and other intangibles

SFAS 141 "Business Combinations" and SFAS 142 "Goodwill and Other Intangible Assets" became effective for the Company on January 1, 2002 with respect to business combinations completed on or after June 30, 2001.

Under SFAS 142, effective January 1, 2002 goodwill is no longer subject to amortization. Management estimates the recoverability of the carrying amount of intangible assets annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Current and estimated future profitability, undiscounted cash flows, and the total market value of the Company's common stock compared with the carrying value of stockholders' equity, are the primary indicators used to assess the recoverability of intangible assets. (See Note 13).

Following is a reconciliation of net income (loss) between the historical amounts reported for year 2001, and the adjusted amounts reflecting this new accounting standard:

				Year 2001
(in thousands, except per share amounts)
Net income (loss):
Reported net income (loss)				$	(21,587	)
Exclude amortization of goodwill and other intangibles					12,799
Adjusted net income (loss)				$	(8,788	)
Basic net income (loss) per share:
Reported basic net income (loss) per share				$	(0.58	)
Adjusted basic net income (loss) per share				$	(0.23	)
Diluted net income (loss) per share:
Reported diluted net income (loss) per share				$	(0.58	)
Adjusted diluted net income (loss) per share				$	(0.23	)

Long-lived assets (excluding Goodwill)

The Company evaluates potential impairment of long-lived assets (excluding goodwill) whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flow expected to result from the use of the asset and its eventual disposition is less than its carrying amount. If an asset is considered impaired, the impairment loss is measured as the amount by which the carrying value of the asset exceeds its estimated fair value. Fair value is determined based upon estimated discounted cash flows or appraised values, depending on the nature of the asset. To date, the Company has identified no such impairment losses.

Recent accounting pronouncements

SFAS 146 "Accounting for Costs Associated with Exit or Disposal Activities" was issued in June 2002, requiring that costs associated with exit or disposal activities be recognized when the liability is incurred, rather than at the date of commitment to an exit or disposal plan. Examples of covered costs are lease termination and certain employee severance. SFAS 146 is applicable to exit or disposal activities initiated after December 31, 2002.

SFAS 148 "Accounting for Stock-Based Compensation — Transition and Disclosure — an amendment of FAS 123" was issued in December 2002, providing for alternative methods of transition for a voluntary change to the fair market value based method of accounting for stock-based employee compensation.

Reclassification

For comparative purposes, certain amounts in the financial statements of prior periods have been reclassified to conform to the current year's presentation.

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3.    Fixed Assets

Fixed assets consist of the following:

				December 31,
				2003				2002
				(in thousands)
Computer equipment and capitalized software				$	18,538			$	14,606
Furniture and fixtures					430				426
Office equipment					626				631
Building					512				512
Leasehold improvements					2,994				2,904
					23,100				19,079
Less: accumulated depreciation and amortization					(14,737	)			(10,629	)
Fixed assets, net				$	8,363			$	8,450

4.    Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

				December 31,
				2003				2002
				(in thousands)
Trade accounts payable				$	597			$	1,095
Accrued compensation and benefits					3,179				2,519
Accrued registry fees and related costs					515				3,264
Penalties for credit card chargebacks and refunds in excess of certain thresholds (Note 14)					6,138				3,739
Accrued advertising expense					680				1,627
Accrued professional fees					718				878
Income taxes payable					1,614				—
Other					2,773				2,105
				$	16,214			$	15,227

5.    Investments

As of December 31, 2003 and 2002, short-term investments and marketable securities consisted of the following:

				Fair Value				Amortized Cost				Gross Unrealized Holding Gains				Gross Unrealized Holding Losses
December 31, 2003 (in thousands)
Short-term investments:
Municipal debt obligations				$	39,043			$	39,005			$	50			$	(12	)
Total short-term investments				$	39,043			$	39,005			$	50			$	(12	)
Marketable securities
Municipal debt obligations				$	2,000			$	2,000				—				—
Equity securities					527				471				57				—
Total marketable securities				$	2,527			$	2,471			$	57			$	—

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				Fair Value				Amortized Cost				Gross Unrealized Holding Gains				Gross Unrealized Holding Losses
December 31, 2002 (in thousands)
Short-term investments:
Municipal debt obligations				$	95,327			$	94,872			$	457			$	(2	)
Certificates of deposit					9,956				9,956				—				—
Total short-term investments				$	105,283			$	104,828			$	457			$	(2	)
Marketable securities
Municipal debt obligations				$	60,887			$	60,404			$	486			$	(3	)
Equity securities					318				470				—				(152	)
Total marketable securities				$	61,205			$	60,874			$	486			$	(155	)

The Company classifies its investments in debt and equity securities as marketable securities in accordance with the provisions of SFAS 115, "Accounting for Certain Investments in Debt and Equity Securities." These securities are carried at fair market value, with unrealized gains and losses reported in stockholders' equity as a component of other comprehensive income (loss). Gains or losses on securities sold are calculated based on the specific identification method. Net unrealized holding gains of $0.1 million and $0.8 million on these securities are included in accumulated comprehensive income at December 31, 2003 and 2002, respectively. Other investments at December 31, 2003 represent a $0.4 million investment in Afilias USA, Inc., the registry for the .info generic top level domain.

6.    Stockholders' Equity

Common Stock

In March 2000, the Company sold 5,222,279 shares of common stock in an initial public offering. Net proceeds were approximately $115.3 million, after underwriting discount and other offering expenses. At the time of the initial public offering, all of the Company's preferred stock automatically converted into 4,694,333 common shares.

During 2001, the Company issued 56,377 shares of restricted stock to employees at exercise prices ranging from $0.00 to $11.49 per share. The Company recorded $0.5 million as deferred compensation, representing the fair value of the restricted stock at the date of issuance, which is being amortized to expense over the three-year vesting period of the grants.

During 2003, the Company issued 37,951 shares of restricted stock to an employee at a price of $5.27 per share, and recorded $0.2 million as deferred compensation, representing the estimated fair value of the restricted stock at the date of issuance. That amount is being amortized to expense over the vesting period of the shares. In December 2003, the Company accelerated the vesting of 13,388 of those shares, and also purchased 5,558 of those shares from the employee, with the proceeds used by the employee as payment for withholding taxes incurred in connection with the accelerated vesting.

Self-Tender Offer

In September 2003, the Company used $120 million of its cash, short-term investments and marketable securities to complete a self-tender offer in which the Company purchased 17,910,347 shares of its common stock and warrants to purchase 987,283 shares of its common stock (based on the conversion of warrants on a cashless basis at the $6.35 per share offer price).

Retirement of Common Stock

During 2002, the Company repurchased and retired 370,100 shares of its common stock at a cost of $1.6 million.

Preferred Stock Purchase Rights

In October 2002, the Company declared a dividend distribution of one preferred share purchase right (the "Right") for each outstanding share of the Company's Common Stock, to stockholders of

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record at the close of business on November 12, 2002. Each Right entitles the registered holder to purchase from the Company a unit consisting of one one-thousandth of a share (a "Unit") of Series A Junior Participating Preferred Stock ("Series A Preferred") at a price of $32.00 per Unit. The Rights, which expire on November 12, 2012, will only become exercisable upon distribution. Distribution of the Rights will not occur until ten days after the earlier of (i) the public announcement that a person or group has acquired beneficial ownership of 15% or more of the outstanding shares of Common Stock (an "Acquiring Person"), or (ii) the commencement of, or announcement of an intention to make, a tender offer or exchange offer that would result in a person or group acquiring the beneficial ownership of 15% or more of the outstanding shares of the Company's Common Stock. Under specified circumstances, the holders of the Rights, other than the Acquiring Person, would be entitled to receive, upon exercise of the Rights, Series A Preferred having a value equal to two times the exercise price of the Rights.

Voting

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company's stockholders.

7.    Warrants

Common shares issuable upon exercise of warrants outstanding at December 31, 2003 are as follows:

Issuance Date				Expiration Date				Shares Issuable Upon Exercise				Average Exercise Price Per Share
January 1998				June 2005					1,295,224			$	0.97
September 1998				September 2008					843			$	0.43
March 1999				March 2009					5,250			$	0.57
May 1999				May 2004					277,747			$	4.08
June 1999				June 2009					5,250			$	1.57
June 1999				June 2004					164,895			$	3.43
Totals									1,749,209			$	1.70

8.    Stock Option Plans

Amended and Restated 2000 Stock Incentive Plan

The Company's Amended and Restated 2000 Stock Incentive Plan (the "2000 Plan") supersedes the 1997 and 1999 Stock Option Plans. The 2000 Plan permits grants of incentive stock options, non-qualified stock options, and other equity-based awards. Incentive stock options and certain other awards may be granted only to employees, whereas non-qualified stock options and certain other awards may be granted to employees, non-employee directors, and consultants. The number of shares reserved for issuance under the 2000 Plan is automatically increased on the first trading day of each calendar year by 2% of the total number of shares of common stock outstanding on the last trading day of the prior calendar year, up to a maximum annual increase of 1,750,000 shares. On January 2, 2004, 2003 and 2002 the number of shares reserved for issuance increased by 470,736, 812,490, and 765,932, respectively. Accordingly, the maximum aggregate number of shares reserved for issuance under the 2000 Plan as of January 2, 2004 was 2,982,463.

The Compensation Committee determines the exercise price and other terms of options and other awards (except automatic option grants to non-employee directors) under the 2000 Plan. All non-employee Board members, other than 3% Stockholders, are automatically granted an option to acquire 25,000 shares of common stock on the date of initial election or appointment to the Board, at an exercise price equal to the fair market value of the Company's common stock on the date of grant, with vesting in annual installments over two years. In addition, each non-employee Board member, other than 3% Stockholders, who continues to serve as a director on the date of each regularly

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scheduled quarterly meeting of the Board will receive an option grant to purchase 2,500 shares of common stock on each such meeting date at an exercise price equal to the fair market value of the Company's common stock on the date of grant. Each 2,500 share option grant will vest upon the optionee's completion of one year of board service measured from the grant date. 3% Stockholder means a non-employee Board member who, as of March 3, 2000, directly or indirectly, owned stock possessing at least 3% of the total combined voting power of the outstanding securities of the Company (or any Parent or Subsidiary), or was affiliated with or was a representative of such a 3% or greater stockholder and is compensated for his/her membership on the Board of Directors by any such 3% or greater stockholder.

Stock option activity under the 2000 Plan is summarized as follows:

				Number of Shares				Weighted Average Exercise Price
Outstanding at January 1, 2001					3,574,432			$	19.00
Granted					2,674,088				8.92
Exercised					(356,550	)			1.07
Forfeited					(1,079,895	)			18.57
Outstanding at December 31, 2001					4,812,075				14.56
Granted					3,038,827				6.47
Exercised					(286,834	)			1.19
Forfeited					(1,691,907	)			11.10
Outstanding at December 31, 2002					5,872,161				12.18
Granted					1,953,425				5.54
Exercised					(293,477	)			2.53
Forfeited					(1,912,570	)			15.36
Outstanding at December 31, 2003					5,619,539			$	9.41
Options available for future grant as of December 31, 2003					2,511,727

Details of options outstanding under the 2000 Plan at December 31, 2003 are as follows:

				Options Outstanding												Options Exercisable
Exercise Price				Number Outstanding at December 31, 2003				Weighted- Average Remaining Contractual Life (Years)				Weighted Average Exercise Price				Number Exercisable at December 31, 2003				Weighted Average Exercise Price
$0.86 - - $4.43					474,839				8.23			$	4.14				128,062			$	3.63
$4.50 - - $4.50					611,400				8.92			$	4.50				162,500			$	4.50
$4.51 - - $5.27					774,709				9.24			$	5.10				90,110			$	4.95
$5.32 - - $5.46					578,896				8.99			$	5.45				39,155			$	5.46
$5.52 - - $6.30					739,556				8.74			$	6.21				201,912			$	6.25
$6.38 - - $8.60					564,163				7.37			$	7.55				288,103			$	7.53
$8.65 - - $8.81					584,786				7.68			$	8.75				224,517			$	8.75
$9.00 - - $12.86					561,924				7.18			$	10.99				373,203			$	11.23
$12.96 - - $40.88					690,416				6.66			$	27.70				584,587			$	28.67
$45.00 - - $58.06					38,850				6.43			$	45.62				35,286			$	45.65
$0.86 - - $58.06					5,619,539				8.14			$	9.41				2,127,435			$	14.01

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Prior to completion of the initial public offering in March 2000, the fair value of option grants to employees was estimated using the minimum value method of the Black-Scholes option-pricing model, which assumes no volatility of the stock price. The estimated fair values were based on assumptions derived from information provided by the Company's management. Changes in the information would affect the assumptions and the estimated fair values derived from the assumptions. Subsequent to the initial public offering, volatility assumptions have been utilized. The assumptions used to determine the estimated fair value of option grants to employees in 2003, 2002 and 2001 were as follows:

				Year Ended December 31,
				2003				2002				2001
Risk free interest rate					3	%			3.8	%			4.5	%
Expected lives (years)					5				5				5
Expected dividends					0	%			0	%			0	%
Volatility					72	%			68	%			80	%

The fair value of options and warrants (see Note 7) granted to non-employees is estimated using the Black-Scholes option-pricing model. The estimated fair values were based on assumptions derived from information provided by the Company's management as shown in the above table. Changes in the information would affect the assumptions and the estimated fair values derived from the assumptions.

The weighted average exercise prices and the estimated fair values at grant dates of options granted during 2003, 2002, and 2001 were as follows:

				Year Ended December 31,
				2003								2002								2001
				Exercise Price				Estimated Fair Value				Exercise Price				Estimated Fair Value				Exercise Price				Estimated Fair Value
Exercise price less than fair value of stock on grant date					—				—				—				—			$	.01			$	9.19
Exercise price equal to fair value of stock on grant date				$	5.54			$	5.54			$	6.47			$	6.47			$	8.92			$	8.92

9.    Employee Stock Purchase Plan

An Employee Stock Purchase Plan (the "Plan") became effective on March 3, 2000, through which employees may purchase shares of common stock through payroll deductions up to 10% of eligible compensation. The price paid by the employee is 85% of the fair market value on the offering date or the last day of the purchase period. There are two 6-month purchase periods per year commencing May 1 and November 1. A total of 350,000 shares was initially reserved for issuance under the Plan. The number of shares reserved for issuance is automatically increased on the first trading day of January of each year by 0.25% of the total shares of common stock outstanding on the last trading day of the prior calendar year. Accordingly, in January 2004, 2003 and 2002, the number of shares reserved for issuance was increased by 58,842, 101,561, and 95,741 shares, respectively. Shares issued under the Plan were 62,900 and 62,470 during 2003 and 2002, respectively.

10.    Related Party Transactions

Peter Forman

Over the four-month period from February 2003 through June 2003, Peter Forman provided consulting services to the Company for a fee of $0.1 million. Mr. Forman was a member of the Company's board of directors during that period. In June 2003, Mr. Forman was elected CEO and President of the Company and entered into an employment agreement with the Company that includes a profit-sharing bonus arrangement whereby Mr. Forman is eligible to receive annual bonuses equal to 3% of the Company's earnings before interest, taxes, certain non-cash expenses and other costs or gains ("EBIT"), as defined in the agreement, between $7 million and $25 million, and 5% of the excess over $25 million for each calendar year.

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11.    Income Taxes

Temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes resulted in a net deferred tax asset of $24.9 million and $23.1 million at December 31, 2003 and 2002, respectively.

The provision for income taxes for the years 2003, 2002 and 2001 consists of the following:

				December 31,
				2003				2002				2001
				(in thousands)
Current provision:
Federal				$	1,202			$	2,395			$	5,634
State					500				1,046				2,252
Foreign					263				—				—
Total current					1,965				3,441				7,886
Deferred provision (benefit):
Federal					(1,298	)			(3,620	)			1,513
State					(577	)			(1,016	)			1,002
Total deferred					(1,875	)			(4,636	)			2,515
Total provision (benefit)				$	90			$	(1,195	)		$	10,401

The current provision in the above schedule excludes the effect of tax deductions related to exercises of non-qualified stock options and disqualifying dispositions of incentive stock options. Under SFAS 109, tax benefits resulting from the foregoing are treated as an increase in stockholders' equity. On a tax-return basis, after giving effect to such tax deductions, for the year 2002 the Company had a taxable loss, and accordingly, the Company had recorded a tax receivable of approximately $1.2 million which was included within accounts payable and accrued expenses as of December 31, 2002. As of December 31, 2003, the Company had a tax payable of $1.6 million, which was included in accounts payable and accrued expenses.

The components of the net deferred tax asset were as follows:

				December 31,
				2003				2002
				(in thousands)
Deferred tax assets:
Allowance for doubtful accounts				$	803			$	1,142
Accrued expenses					192				184
Allowance for returns					359				357
Depreciation and amortization					439				323
Stock-based compensation					180				(55	)
Deferred revenue					25,340				25,874
Credit card penalties					2,663				1,584
Foreign Tax Credit					112				—
Total deferred tax asset					30,088				29,409
Deferred tax liabilities:
Prepaid domain name registry fees					5,172				6,101
Deferred commissions					(145	)			40
Restricted stock					134				216
Total deferred tax liabilities					5,161				6,357
Net deferred tax asset				$	24,927			$	23,052

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The income tax provision (benefit) in the Statement of Operations differs from income tax provision (benefit) determined by applying the statutory Federal income tax rate to the net income (loss) shown in the financial statements as a result of the following:

				Year ended December 31,
				2003				2002				2001
Tax provision (benefit) at Federal statutory rate					34.0	%			(35.0	)%			(35.0	)%
State income tax provision (benefit), net of Federal tax charge					1.0				0.6				(4.7	)
Foreign tax rate					10.9				34.9				—
Tax exempt interest					(39.5	)			(12.7	)			—
Non-deductible amortization and writedown of goodwill and other intangible assets					—				26.1				152.4
Abandonment of Afternic business (Note 13)					—				(23.7	)			—
Tax credits					(15.2	)			(5.5	)			—
Other permanent items					(16.4	)			5.0				—
Non-deductible advisory costs					28.9				—				—
Valuation allowance					—				—				(19.8	)
Tax provision (benefit) per statement of operations					3.7	%			(10.3	)%			92.9	%

12.    Commitments

Operating leases

The Company leases office facilities under non-cancelable operating leases expiring through 2011. Future minimum lease payments are as follows:

Years ending December 31,				(in thousands)
2004				$	1,353
2005					1,234
2006					1,127
2007					885
2008					882
Thereafter					795
Total minimum lease payments				$	6,276

Rent expense for the years 2003, 2002 and 2001 was $1.8 million, $1.5 million and $0.7 million, respectively.

Employment agreements

In the normal course of business, the Company enters into employment agreements with certain of its executives.

13.    Acquisitions

In September 2000, the Company acquired Afternic.com, Inc. for $10.0 million cash and 4,378,289 shares of common stock. A portion of the cash and stock was used to satisfy existing obligations of Afternic.com. The total value of the transaction at the time of the acquisition was approximately $47.9 million. The acquisition was accounted for using the purchase method of accounting, and accordingly, the purchase price was allocated to assets acquired and liabilities assumed based on their respective fair values. Intangible assets of $47.9 million, representing the excess of the purchase price plus transaction expenses over the fair value of assets acquired, was allocated to goodwill and other intangibles, to be amortized on a straight-line basis over a period of 48 months.

During 2001, due to significantly lower than expected demand for Afternic's services experienced in the first year following the acquisition, as well as the fact that market conditions and attendant

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multiples used to estimate terminal values became and remained significantly depressed since the acquisition of Afternic, the Company concluded that an other than temporary impairment of goodwill has occurred. As a result, the Company recorded an impairment charge in the quarter ended September 30, 2001, in the approximate amount of $32.5 million. At December 31, 2001, there was a remaining balance of $8.6 million of goodwill and other intangible assets related to the acquisitions of Inabox and Afternic.

On March 8, 2002 the Company acquired Virtual Internet plc, a U.K. based company ("VI"), for £11.99 million ($16.9 million at date of acquisition). VI had operations in the United States and Europe and, at the time of acquisition, operated through two divisions: the Corporate Services division and the Hosting division. The Corporate Services division provides domain name registration and online intellectual property management and protection services, and the Hosting division provided web-hosting services. In May 2002, the Company sold VI's Hosting division for $0.5 million. Certain of VI's shareholders, other than shareholders in certain jurisdictions outside of the U.K., elected to receive loan notes issued by the Company in exchange for their VI shares; $9.6 million of these loan notes were outstanding at December 31, 2002. These loan notes bore interest at a floating rate equal to LIBOR minus 1% (3.93% at December 31, 2002) and were fully redeemed by June 2003. The cash portion of the VI acquisition was funded with the Company's available cash resources. The Company's results of operations include Virtual Internet's Corporate Services business subsequent to March 8, 2002. In 2003, Virtual Internet changed its name to Register.com Europe plc ("RCOM Europe").

For the year 2002, RCOM Europe recorded revenue of $7.2 million, and incurred a loss of $10.5 million, which included a charge of $8.3 million related to an impairment of goodwill. The Company did not record a tax benefit in connection with that loss.

A breakdown of the Company's intangible assets, all of which were recorded in connection with the acquisition of RCOM Europe, and the related amortization is:

				As of December 31, 2003
				Gross Book Value				Accumulated Amortization (in thousands)				Net Book Value
Intangible assets:
Software				$	497			$	283			$	214
Tradename					113				25				88
Customer list					2,150				500				1,650
Total				$	2,760			$	808			$	1,952
Projected amortization expense:
Year 2004				$	543
Year 2005				$	407
Year 2006				$	377
Year 2007				$	377
Year 2008				$	70
Year 2009 and thereafter				$	178

In September 2002, the Company made a decision to abandon its Afternic business. As a consequence of that decision, as well as negative industry and economic trends then affecting the Company and the general decline in technology company valuations, including the valuation of the Company's common stock, the Company performed an impairment analysis of the goodwill and intangible assets recorded in connection with its various acquisitions. Because the total market value of the Company's common stock as of September 30, 2002 was lower than the book value of its stockholders' equity, the Company recorded a goodwill impairment writedown of approximately $17.0 million in September 2002.

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14.    Contingencies and Commitments

Litigation

In November 2001, the Company, its former Chairman, President and Chief Executive Officer Richard D. Forman and its former Vice President of Finance and Accounting, Alan G. Breitman (the "Individual Defendants"), and Goldman Sachs & Co. and Lehman Brothers, Inc., two of the underwriters in the syndicate for our March 3, 2000 initial public offering, were named as defendants in a class action complaint alleging violations of the federal securities laws in the United States District Court, Southern District of New York. Goldman Sachs & Co. and Lehman Brothers, Inc. distributed 172,500 of the 5,750,000 shares in the initial public offering. On April 19, 2002, the Company and the Individual Defendants were named as defendants in a Consolidated Amended Complaint (now the operative complaint) filed in the Southern District of New York and captioned In re: Register.com, Inc. Initial Public Offering Securities Litigation. The Consolidated Amended Complaint seeks unspecified damages as a result of various alleged securities law violations arising from activities purportedly engaged in by the underwriters in connection with our initial public offering. Plaintiffs allege that the underwriter defendants agreed to allocate stock in the Company's initial public offering to certain investors in exchange for excessive and undisclosed commissions and agreements by those investors to make additional purchases of stock in the aftermarket at pre-determined prices. Plaintiffs allege that the prospectus for the Company's initial public offering was false and misleading in violation of the securities laws because it did not disclose these arrangements. The action is being coordinated with approximately three hundred other nearly identical actions filed against other companies before one judge in the U.S. District Court for the Southern District of New York. On October 9, 2002, the Court dismissed the Individual Defendants from the case without prejudice based on Stipulations of Dismissal filed by the plaintiffs and the Individual Defendants. On February 19, 2003, the Court denied the motion to dismiss the complaint against the Company. The Company has approved a Memorandum of Understanding ("MOU") and related agreements which set forth the terms of a settlement between the Company and the plaintiff class. It is anticipated that any potential financial obligation of the Company to plaintiffs due pursuant to the terms of the MOU and related agreements will be covered by existing insurance. Therefore, the Company does not expect that the settlement will involve any payment by the Company. The MOU and related agreements are subject to a number of contingencies including the negotiation of a settlement agreement and approval by the Court. We cannot predict whether or when a settlement will occur or be finalized.

Register.com has been named as a defendant in a purported class action lawsuit filed on May 2, 2002, which alleges that our SafeRenew program violates New York law. This lawsuit was filed by Brian Wornow, on behalf of himself and all others similarly situated, in the Supreme Court of the State of New York. Our SafeRenew program was implemented in January 2001 on an "opt-out basis" to .com, .net and .org registrations registered through the www.register.com website, and was subsequently expanded to cover certain ccTLDs registered through this website. Under the terms of our services agreement, at the time a covered registration comes up for renewal, we attempt to charge a registrant's on-file credit card a one year renewal fee and, if the charge is successful, to renew the registration for that additional one-year period. Register.com believes that the SafeRenew program was properly adopted as an effort to protect our customers' online identities. Plaintiff sought a declaratory judgment that the SafeRenew program violates New York General Obligations Law Section 5-903, and also claimed breach of contract, money had and received, and unjust enrichment. Plaintiff further sought to enjoin Register.com from automatically renewing domain name registrations, an award of compensatory damages, restitution, disgorgement of profits (plus interest), cost and expenses, attorneys' fees, and punitive damages. On September 6, 2002, Register.com filed a motion to dismiss the complaint in its entirety. On April 17, 2003, Register.com's motion was granted as to two counts (declaratory judgment and breach of contract), but denied as to two other counts (unjust enrichment and money had and received). On April 28, 2003, Register.com filed an answer denying the material allegations of the complaint. On May 2, 2003, Plaintiff filed a notice of appeal to the Appellate Division, First Department of the two counts that were dismissed. On May 15, 2003, Plaintiff filed an amended complaint asserting new causes of action against Register.com for (i)

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deceptive trade practices in violation of New York General Business Law Section 349; (ii) conversion; and (iii) breach of the implied covenant of good faith and fair dealing. On June 9, 2003, Register.com moved to dismiss Plaintiff's newly asserted causes of action. On July 23, 2003 the Court heard oral arguments on Register.com's motion. On February 2, 2004, Plaintiff filed an appeal of the dismissal of the Section 5-903 claims. On February 19, 2004, Register.com's motion to dismiss the first, fourth and a fifth causes of action of Plaintiff's amended complaint was granted. While we intend to continue to defend ourselves vigorously in this lawsuit, in an effort to mitigate a potential worst-case scenario, we entered into an insurance agreement pursuant to which, in accordance with its terms and conditions, to the extent that we have a final judgment in excess of $15 million our insurance carrier would cover up to an additional $30 million.

On or about January 17, 2003, individual stockholders of the Company filed complaints in the Delaware Court of Chancery purporting to commence class action lawsuits against the Company and each of the individual members of the Company's Board of Directors. The complaints were styled as Lanza v. Morten, et al (C.A. No. 20123) and Norton v. Morten, et al (C.A. No. 20124). The complaints alleged, among other things, breaches of fiduciary duty by the directors in connection with certain publicly disclosed indications of interest in the acquisition of Company and further alleged that the directors were not fulfilling their fiduciary duties in connection with their review and response to such indications of interest. On January 9, 2004 the complaints were withdrawn by the plaintiff and on January 12, 2004 the court approved the dismissal of the complaints without prejudice.

In February 2001, Register.com was named as a defendant in a purported class action lawsuit pending in the Supreme Court of the State of New York. The complaint alleges that by linking new domain names registered through Register.com to a "Coming Soon" web page that informs visitors the name was recently registered through Register.com, and provides links to services provided by Register.com and its business partners, as well as a banner advertisement for such services, Register.com has (i) breached an implied covenant of good faith and fair dealing; (ii) engaged in deceptive trade practices in violation of New York General Business Law Section 349; and (iii) been unjustly enriched. Prior to the filing of the lawsuit, in addition to disclosing the Coming Soon page by means of such domain names, Register.com also disclosed the existence of the Coming Soon page in the "Help" and "Frequently Asked Questions" portions of its website. In March 2001, Register.com added an additional disclosure concerning the Coming Soon page to Register.com's Services Agreement. In April 2001, Register.com filed a motion to dismiss Plaintiff's claims for failure to state a claim upon which relief may be granted and in August 2001, Register.com's motion was granted. Plaintiff appealed the dismissal to the Appellate Division, First Department, and in April 2003 the Appellate Division affirmed the dismissal of the unjust enrichment cause of action, but reinstated the causes of action for breach of an implied covenant of good faith and fair dealing and deceptive trade practices. Thereafter, Register.com and Plaintiff agreed upon a settlement which, following notice to the proposed settlement class, was approved by the Court on November 3, 2003. In accordance with the settlement, Register.com has provided each member of the putative class with a five dollar discount off of future purchases of Register.com's fees for domain name registrations and renewals and has paid attorney's fees in the amount awarded by the Court to class counsel.

On or about August 7, 2003 and August 8, 2003, purported stockholders of the Company filed two separate complaints in the Court of Chancery of Delaware against the Company and certain current and past individual members of the Company's Board of Directors. The first complaint was styled as McBride v. Register.com, Inc., et al (C.A. No. 20470) and the second complaint was styled as DeMatte v. Register.com, Inc., et al (C.A. No. 20474). On November 3, 2003, the two cases were consolidated (C.A. No. 20470) and on November 5, 2003, an amended complaint was filed. The complaint alleges, among other things, that the named defendants breached their fiduciary duties in connection with the self tender that the Company commenced in August 2003 and completed in September 2003, and that the self tender is an attempt by the individual defendants to entrench their positions in the Company. The complaint seeks, among other things, the court's certification as a class action lawsuit, unspecified damages and rescission of the self tender. On December 5, 2003

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Register.com filed a motion to dismiss for failure to state a claim upon which relief can be granted and failure to comply with the requirements of Rule 23.1 and on February 26, 2004 Register.com filed a brief in support of such motion.

There are various other claims, lawsuits and pending actions against the Company incidental to the operations of its business. It is the opinion of management, after consultation with counsel, that the ultimate resolution of such claims, lawsuits and pending actions will not have a material adverse effect on the Company's financial position, results of operations or liquidity.

Credit Card Penalties

The Company has experienced high rates of refunds to customers and chargebacks from customers, which have resulted in the assessment of financial penalties by two credit card associations. If the Company is unable to lower its refund and chargeback rates to levels deemed acceptable by the credit card associations, the Company could continue to face such penalties and may lose its rights to accept credit card payments from customers through one or more credit card associations. The Company had not previously incurred penalties from one of those associations until August 2002, at which time it was assessed a penalty of $0.3 million applicable to the year 2001. Under that association's rules, additional potential penalties may be imposed at the discretion of the association. Because the imposition of any potential penalties is at the discretion of the association, subject to contractual limitations, the Company accrued a $2.4 million and $3.7 million charge to general and administrative expense in the year 2003 and 2002, respectively, to cover what the Company estimates to be the maximum potential penalties that could be imposed under that association's rules for transactions through December 31, 2003. Any such potential penalties would be imposed on the Company's credit card processor by the association, and under the Company's contract with its processor, the Company is required to reimburse such penalties. If the penalty ultimately imposed is less than the maximum contractual amount, the Company would reverse any excess accounts previously accrued as a reduction of general and administrative expense at that time.

Commitments

Under a prior registry agreement with ICANN, we had committed to provide up to $8.5 million in funding and other non-cash contributions to our subsidiary, RegistryPro, for its activities in establishing, operating and marketing the .pro top level domain. Effective February 26, 2004, we sold the core assets of the RegistryPro business and ICANN agreed to the assignment of the agreement to the purchaser, although we have not obtained a release of these obligations from ICANN. Through December 31, 2003 we had contributed approximately $4.1 million in cash, of which $2.6 million was funded during 2003, and we had also made non-cash contributions. In addition, the purchaser has agreed to assume up to $2.0 million of this commitment.

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REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders of Register.com, Inc.:

In connection with our audits of the financial statements of Register.com, Inc. as of December 31, 2003 and 2002 and for each of the three years in the period ended December 31, 2003, which financial statements are included in the Form 10-K, we have also audited the financial statement schedule listed in Part II herein.

In our opinion, this financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
New York, New York
February 6, 2004

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Schedule II—Valuation and Qualifying Account

				Balance at Beginning of Period				Charged to Costs and Expense				Deductions				Balance at End of Period
For the year ended December 31, 2003:
Provision for doubtful accounts				$	2,695			$	739			$	1,584			$	1,850
For the year ended December 31, 2002:
Provision for doubtful accounts				$	2,179			$	2,608			$	2,092			$	2,695
For the year ended December 31, 2001:
Provision for doubtful accounts				$	1,749			$	430			$	—			$	2,179

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

Not applicable.

Item 9A. Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of December 31, 2003, that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure control and procedures or internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met and cannot detect all deviations. Because of the inherent limitations in all control systems, no evaluation of control can provide absolute assurance that all control issues and instances of fraud or deviations, if any, within the Company have been detected. While we believe that our disclosure controls and procedures and our internal control over financial reporting have been effective, in light of the foregoing, we intend to continue to examine and refine our disclosure controls and procedures and our internal control over financial reporting to monitor ongoing developments in this area.

In the past we have had material weaknesses in our internal control over financial reporting. During the fourth quarter of 2003, we completed the implementation of a number of new processes and new accounting system modules which have since corrected these weaknesses. Otherwise, there were no significant changes in our internal control over financial reporting subsequent to our evaluation of the Company's internal control over financial reporting that could materially affect or are reasonably likely to materially affect our internal control over financial reporting.

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PART III

Item 10.    Directors and Executive Officers of the Registrant.

The information required by this item other than the following information concerning the Company's code of ethics is incorporated herein by reference to the sections entitled "Proposal 1 — Election of Directors" and "Executive Compensation — Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 7, 2004 (the "Proxy Statement"). The Company intends to file the Proxy Statement within 120 days after the end of its fiscal year.

The Company has adopted a "code of ethics" as defined by applicable rules of the Securities and Exchange Commission and the Nasdaq Stock Market, which is applicable to its chief executive officer, chief financial officer, controller and other senior financial and reporting persons and its directors. This code is part of the Company's broader Code of Business Ethics and Conduct and is publicly available on the Company's website at http://investor.register.com. If the Company makes any amendments to the code of ethics for its senior officers, financial and reporting persons or directors (other than technical, administrative, or other non-substantive amendments), or grants any waivers, including implicit waivers, from a provision of this code to such persons, the Company will disclose the nature of the amendment or waiver, its effective date and to whom it applies on its website or in a report on Form 8-K filed with the Securities and Exchange Commission.

Item 11.    Executive Compensation.

The information required by this item is incorporated herein by reference to the sections entitled "Executive Compensation and Related Information" in the Company's Proxy Statement.

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item is incorporated herein by reference to the sections entitled "Security Ownership of Certain Beneficial Owners and Management" in the Company's Proxy Statement.

Item 13.    Certain Relationships and Related Transactions.

The information required by this item is incorporated herein by reference to the section entitled "Certain Relationships and Related Transactions" in the Company's Proxy Statement.

Item 14.    Principal Accounting Fees and Services

The information required by this item is incorporated herein by reference to the section entitled "Principal Accounting Fees and Services" in the Company's Proxy Statement.

PART IV

Item 15.    Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a)	1.    Consolidated Financial Statements.

The financial statements as set forth under Item 8 of this report are incorporated herein by reference.

2.    Financial Statement Schedules.

The Valuation and Qualifying Account Schedule as set forth under Item 8 of this report is incorporated herein by reference.

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3.    Exhibits.

The following Exhibits are incorporated herein by reference or are filed with this report as indicated below.

Exhibit Number				Description
3.1				Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 of Registration Statement No. 333-93533).
3.2				Certificate of Correction of Amended and Restated Certificate of Incorporation (incorporated by reference to the identically numbered exhibit of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2000).
3.3				Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 of Registration Statement No. 333-93533).
3.4				Certificate of Designation of Rights, Preferences and Privileges of the Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 of Registrant's Current Report on Form 8-K dated October 29, 2002).
4.1				Specimen common stock certificate (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
4.2				See Exhibits 3.1, 3.2, and 3.3 for provisions of the certificate of incorporation and bylaws defining the rights of holders of Common Stock (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
4.3				Registration Rights Agreement dated June 30, 1999 (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
4.4				Registration Rights Agreement dated June 4, 2000 (incorporated by reference to Exhibit 4.3.2 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended June 30, 2000).
4.5				Registration Rights Agreement dated September 15, 2000 (incorporated by reference to Exhibit 4.3.3 of Registrant Current Report on Form 8-K dated September 29, 2000).
4.6				Certificate of designations, preferences and relative, participating, optional and other special rights of preferred stock and qualifications, limitations and restrictions of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.5 of Registration Statement No. 333-93533).
4.7				Form of warrant to purchase common stock issued to Series A Convertible Preferred Stockholders (incorporated by reference to Exhibit 4.6.1 of Registration Statement No. 333-93533).
4.8				Form of warrant to purchase common stock issued to Niles H. Cohen and Zachary Prensky (incorporated by reference to Exhibit 4.6.4 of Registration Statement No. 333-93533).
4.9*				Form of Amended and Restated Common Stock Purchase Warrant — Series A issued to Richard D. Forman, Peter A. Forman, Dan Levine and Capital Express LLC (incorporated by reference to Exhibit 4.6.5 of Registration Statement No. 333-93533).
4.10				Warrants to purchase common stock issued to Legg Mason Wood Walker, Incorporated (incorporated by reference to Exhibit 4.6.6 of Registration Statement No. 333-93533).

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Exhibit Number				Description
4.11				Form of warrant to purchase common stock issued to consultants (incorporated by reference to Exhibit 4.6.7 of Registration Statement No. 333-93533).
4.12*				Employee Stock Option Certificate issued to Richard D. Forman (incorporated by reference to Exhibit 4.7.1 of Registration Statement No. 333-93533).
4.13*				Stock Issuance Agreement, dated March 20, 2002, with Walt Meffert, Jr. (incorporated by reference to Exhibit 4.9 of Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
4.14*				Stock Option Agreement with Jonathan Stern (incorporated by reference to Exhibit 4.10 of Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
4.15				Rights Agreement, dated as of October 28, 2002, between Register.com, Inc. and American Stock Transfer & Trust Company, which includes the form of Certificate of Designation of Rights, Preferences and Privileges of the Series A Junior Participating Preferred Stock as Exhibit A, the form of Rights Certificate as Exhibit B and the Summary of Rights to Purchase Series A Preferred Stock as Exhibit C (incorporated by reference to Exhibit 4.1 of Registrant's Current Report on Form 8-K dated October 29, 2002).
10.1				1997 Stock Option Plan (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
10.2				1999 Stock Option Plan (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
10.3				Registrar Accreditation Agreement, dated November 30, 1999, by and between ICANN and Register.com, Inc (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
10.4				Registrar Accreditation Agreement, dated April 27, 2000, by and between ICANN and Register.com, Inc (incorporated by reference to Exhibit 10.3.2 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended June 30, 2000).
10.5				Registrar License and Agreement, dated December 13, 1999, by and between Network Solutions, Inc. and Register.com, Inc (incorporated by reference to Exhibit 10.4 of Registration Statement No. 333-93533).
10.6				Lease between Pennbus Realties, Inc. and Forman Interactive Corp (incorporated by reference to Exhibit 10.5 of Registration Statement No. 333-93533).
10.7				2000 Stock Incentive Plan (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
10.8				Amended and Restated 2000 Stock Incentive Plan (effective as of March 22, 2002) (incorporated by reference to Exhibit 10.6 of Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
10.9*				Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.6.2 of Registration Statement No. 333-93533).
10.10*				Employment Agreement, dated November 15, 1995, with Richard D. Forman (incorporated by reference to Exhibit 10.7 of Registration Statement No. 333-93533).

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Exhibit Number				Description
10.11*				Employment Agreement, dated February 27, 2000, with Richard D. Forman (incorporated by reference to Exhibit 10.8 of Registration Statement No. 333-93533).
10.12*				Employment Agreement with Jack S. Levy (incorporated by reference to Exhibit 10.8.2 of Registration Statement No. 333-93533).
10.13*				Offer Letter, dated October 8, 2001, with Walt Meffert, Jr (incorporated by reference to Exhibit 10.9 of Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
10.14*				Promissory Note, dated December 20, 2001, with Walt Meffert, Jr (incorporated by reference to Exhibit 10.18 of Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
10.15				Lease between Yarmouth Area Industrial Commission and RCOM Canada, Corp (incorporated by reference to Exhibit 10.20 of the Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2001).
10.16*				Letter Agreement of Employment, dated as of June 11, 2002, with Jonathan Stern (incorporated by reference to Exhibit 10.23 of Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
10.17*				Employment Agreement by and between Register.com and Mitchell Quain, dated November 25, 2002 (incorporated by reference to Exhibit 10.24 of Registrant's Current Report on Form 8-K dated November 25, 2002).
10.18*				Form of Indemnification Agreement between the Company and certain executive officers and directors.
10.19*				Amendment to Offer Letter with Walt Meffert, Jr., dated November 26, 2002.
10.20*				Offer Letter, dated June 8, 2001 with Michael Pollack.
10.21*				Promissory Note, dated June 11, 2001 with Michael Pollack (incorporated by reference to Exhibit d (9) of the Registrant's Schedule T-O filed with the SEC on December 16, 2002).
10.22*				Stock Issuance Agreement with Michael Pollack (incorporated by reference to Exhibit d (10) of the Registrant's Schedule T-O filed with the SEC on December 16, 2002).
10.23*				Stock Option Agreement with Mitchell I. Quain (incorporated by reference to Exhibit d (12) of the Registrant's Schedule T-O filed with the SEC on December 16, 2002).
10.24*				Stock Option Agreement with Jonathan Stern (incorporated by reference to Exhibit 10.32 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.25*				Restricted Stock Agreement with Jack S. Levy, effective as of March 8, 2003 (incorporated by reference to Exhibit 10.33 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.26*				Form of Executive Change in Control Severance Program (incorporated by reference to Exhibit 10.34 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).

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Exhibit Number				Description
10.27*				Form of U.S. Director-level Employee Change in Control Severance Program (incorporated by reference to Exhibit 10.35 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.28*				Form of U.S. Employee Change in Control Severance Program (incorporated by reference to Exhibit 10.36 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.29*				Form of Change in Control Voluntary Termination Benefits Letter with Executives (incorporated by reference to Exhibit 10.37 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.30*				Form of Retention Bonus Letter Agreement with Executives who are party to the Change in Control Voluntary Termination Benefits Letter (incorporated by reference to Exhibit 10.38 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.31*				Form of Retention Bonus Letter Agreement with Executives who are not party to the Change in Control Voluntary Termination Benefits Letter (incorporated by reference to Exhibit 10.39 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.32*				Amendment to Letter Agreement of Employment with Jonathan Stern, dated May 8, 2003 (incorporated by reference to Exhibit 10.40 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.33*				Retention Bonus Letter Agreement with Jonathan Stern, dated May 13, 2003 (incorporated by reference to Exhibit 10.41 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.34				Agreement, dated June 9, 2003, among Register.com, Inc., Barington Companies Equity Partners, L.P. and the other parties listed on Schedule A thereto (incorporated by reference to Exhibit 10.42 of Registrant's Current Report on Form 8-K dated June 10, 2003).
10.35*				Employment Agreement, dated June 16, 2003, with Peter A. Forman (incorporated by reference to Exhibit 10.43 of Registrant's Current Report on Form 8-K dated June 17, 2003).
10.36*				Amendment to Letter Agreement of Employment with Michael D. Pollack, dated May 23, 2003 (incorporated by reference to Exhibit (d)(1)(T) of Registrant's Schedule T-O filed with the SEC on August 5, 2003).
10.37*				Letter Agreement of Employment, dated as of November 15, 2002, with Alan Kipust (incorporated by reference to Exhibit (d)(1)(CC) of Registrant's Schedule T-O filed with the SEC on August 5, 2003).
10.38*				Letter of Agreement of Employment, dated August 6, 2003, with Monica Schulze Hodges (incorporated by reference to Exhibit (d)(1)(EE) of Registrant's Schedule T-O filed with the SEC on August 5, 2003).
10.39*				Amendment to Letter Agreement of Employment, dated as of November 19, 2003, with Alan Kipust.
21.1				Subsidiaries of Registrant.

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Exhibit Number				Description
23.1				Consent of PricewaterhouseCoopers LLP.
31.1				Certification of Peter A. Forman, Chief Executive Officer of the Company, pursuant to Rules 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934, as amended.
31.2				Certification of Jonathan Stern, Chief Financial Officer of the Company, pursuant to Rules 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934.
32.1				Certification by Peter A. Forman, Chief Executive Officer of the Company, pursuant to 18 U.S.C. §1350.
32.2				Certification by Jonathan Stern, Chief Financial Officer of the Company, pursuant to 18 U.S.C. §1350.

*	Indicates management contract or compensatory plan or arrangement.

(b)	Reports on Form 8-K

On November 10, 2003, we filed a Current Report on Form 8-K, Item 12 announcing our financial results for the third quarter of 2003.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Register.com, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on this 11th day of March, 2004.

REGISTER.COM, INC.

By: /s/ Peter A. Forman

Peter A. Forman President and Chief Executive Officer

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

Signature		Title		Date
/s/ Peter A. Forman		President, Chief Executive Officer and Director (Principal Executive Officer)		March 11, 2004
Peter A. Forman
/s/ Jonathan Stern		Chief Financial Officer (Principal Accounting and Financial Officer)		March 11, 2004
Jonathan Stern
/s/ Mitchell I. Quain		Chairman of the Board of Directors		March 11, 2004
Mitchell I. Quain
/s/ Niles H. Cohen		Director		March 11, 2004
Niles H. Cohen
/s/ Dewain K. Cross		Director		March 11, 2004
Dewain K. Cross
/s/ Richard D. Forman		Director		March 11, 2004
Richard D. Forman
/s/ James A. Mitarotonda		Director		March 10, 2004
James A. Mitarotonda
/s/ Stanley Morten		Director		March 11, 2004
Stanley Morten
/s/ Jim Rosenthal		Director		March 11, 2004
Jim Rosenthal
/s/ Reginald Van Lee		Director		March 11, 2004
Reginald Van Lee

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EXHIBIT INDEX

Exhibit Number				Description
3.1				Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 of Registration Statement No. 333-93533).
3.2				Certificate of Correction of Amended and Restated Certificate of Incorporation (incorporated by reference to the identically numbered exhibit of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2000).
3.3				Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 of Registration Statement No. 333-93533).
3.4				Certificate of Designation of Rights, Preferences and Privileges of the Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 of Registrant's Current Report on Form 8-K dated October 29, 2002).
4.1				Specimen common stock certificate (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
4.2				See Exhibits 3.1, 3.2, and 3.3 for provisions of the certificate of incorporation and bylaws defining the rights of holders of Common Stock (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
4.3				Registration Rights Agreement dated June 30, 1999 (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
4.4				Registration Rights Agreement dated June 4, 2000 (incorporated by reference to Exhibit 4.3.2 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended June 30, 2000).
4.5				Registration Rights Agreement dated September 15, 2000 (incorporated by reference to Exhibit 4.3.3 of Registrant Current Report on Form 8-K dated September 29, 2000).
4.6				Certificate of designations, preferences and relative, participating, optional and other special rights of preferred stock and qualifications, limitations and restrictions of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.5 of Registration Statement No. 333-93533).
4.7				Form of warrant to purchase common stock issued to Series A Convertible Preferred Stockholders (incorporated by reference to Exhibit 4.6.1 of Registration Statement No. 333-93533).
4.8				Form of warrant to purchase common stock issued to Niles H. Cohen and Zachary Prensky (incorporated by reference to Exhibit 4.6.4 of Registration Statement No. 333-93533).
4.9*				Form of Amended and Restated Common Stock Purchase Warrant — Series A issued to Richard D. Forman, Peter A. Forman, Dan Levine and Capital Express LLC (incorporated by reference to Exhibit 4.6.5 of Registration Statement No. 333-93533).
4.10				Warrants to purchase common stock issued to Legg Mason Wood Walker, Incorporated (incorporated by reference to Exhibit 4.6.6 of Registration Statement No. 333-93533).
4.11				Form of warrant to purchase common stock issued to consultants (incorporated by reference to Exhibit 4.6.7 of Registration Statement No. 333-93533).

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Exhibit Number				Description
4.12*				Employee Stock Option Certificate issued to Richard D. Forman (incorporated by reference to Exhibit 4.7.1 of Registration Statement No. 333-93533).
4.13*				Stock Issuance Agreement, dated March 20, 2002, with Walt Meffert, Jr. (incorporated by reference to Exhibit 4.9 of Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
4.14*				Stock Option Agreement with Jonathan Stern (incorporated by reference to Exhibit 4.10 of Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
4.15				Rights Agreement, dated as of October 28, 2002, between Register.com, Inc. and American Stock Transfer & Trust Company, which includes the form of Certificate of Designation of Rights, Preferences and Privileges of the Series A Junior Participating Preferred Stock as Exhibit A, the form of Rights Certificate as Exhibit B and the Summary of Rights to Purchase Series A Preferred Stock as Exhibit C (incorporated by reference to Exhibit 4.1 of Registrant's Current Report on Form 8-K dated October 29, 2002).
10.1				1997 Stock Option Plan (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
10.2				1999 Stock Option Plan (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
10.3				Registrar Accreditation Agreement, dated November 30, 1999, by and between ICANN and Register.com, Inc (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
10.4				Registrar Accreditation Agreement, dated April 27, 2000, by and between ICANN and Register.com, Inc (incorporated by reference to Exhibit 10.3.2 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended June 30, 2000).
10.5				Registrar License and Agreement, dated December 13, 1999, by and between Network Solutions, Inc. and Register.com, Inc (incorporated by reference to Exhibit 10.4 of Registration Statement No. 333-93533).
10.6				Lease between Pennbus Realties, Inc. and Forman Interactive Corp (incorporated by reference to Exhibit 10.5 of Registration Statement No. 333-93533).
10.7				2000 Stock Incentive Plan (incorporated by reference to the identically numbered exhibit of Registration Statement No. 333-93533).
10.8				Amended and Restated 2000 Stock Incentive Plan (effective as of March 22, 2002) (incorporated by reference to Exhibit 10.6 of Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
10.9*				Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.6.2 of Registration Statement No. 333-93533).
10.10*				Employment Agreement, dated November 15, 1995, with Richard D. Forman (incorporated by reference to Exhibit 10.7 of Registration Statement No. 333-93533).
10.11*				Employment Agreement, dated February 27, 2000, with Richard D. Forman (incorporated by reference to Exhibit 10.8 of Registration Statement No. 333-93533).

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Exhibit Number				Description
10.12*				Employment Agreement with Jack S. Levy (incorporated by reference to Exhibit 10.8.2 of Registration Statement No. 333-93533).
10.13*				Offer Letter, dated October 8, 2001, with Walt Meffert, Jr (incorporated by reference to Exhibit 10.9 of Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
10.14*				Promissory Note, dated December 20, 2001, with Walt Meffert, Jr (incorporated by reference to Exhibit 10.18 of Registrant's Annual Report on Form 10-K for the year ended December 31, 2001).
10.15				Lease between Yarmouth Area Industrial Commission and RCOM Canada, Corp (incorporated by reference to Exhibit 10.20 of the Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2001).
10.16*				Letter Agreement of Employment, dated as of June 11, 2002, with Jonathan Stern (incorporated by reference to Exhibit 10.23 of Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
10.17*				Employment Agreement by and between Register.com and Mitchell Quain, dated November 25, 2002 (incorporated by reference to Exhibit 10.24 of Registrant's Current Report on Form 8-K dated November 25, 2002).
10.18*				Form of Indemnification Agreement between the Company and certain executive officers and directors.
10.19*				Amendment to Offer Letter with Walt Meffert, Jr., dated November 26, 2002.
10.20*				Offer Letter, dated June 8, 2001 with Michael Pollack.
10.21*				Promissory Note, dated June 11, 2001 with Michael Pollack (incorporated by reference to Exhibit d (9) of the Registrant's Schedule T-O filed with the SEC on December 16, 2002).
10.22*				Stock Issuance Agreement with Michael Pollack (incorporated by reference to Exhibit d (10) of the Registrant's Schedule T-O filed with the SEC on December 16, 2002).
10.23*				Stock Option Agreement with Mitchell I. Quain (incorporated by reference to Exhibit d (12) of the Registrant's Schedule T-O filed with the SEC on December 16, 2002).
10.24*				Stock Option Agreement with Jonathan Stern (incorporated by reference to Exhibit 10.32 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.25*				Restricted Stock Agreement with Jack S. Levy, effective as of March 8, 2003 (incorporated by reference to Exhibit 10.33 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.26*				Form of Executive Change in Control Severance Program (incorporated by reference to Exhibit 10.34 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.27*				Form of U.S. Director-level Employee Change in Control Severance Program (incorporated by reference to Exhibit 10.35 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).

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Exhibit Number				Description
10.28*				Form of U.S. Employee Change in Control Severance Program (incorporated by reference to Exhibit 10.36 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.29*				Form of Change in Control Voluntary Termination Benefits Letter with Executives (incorporated by reference to Exhibit 10.37 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.30*				Form of Retention Bonus Letter Agreement with Executives who are party to the Change in Control Voluntary Termination Benefits Letter (incorporated by reference to Exhibit 10.38 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.31*				Form of Retention Bonus Letter Agreement with Executives who are not party to the Change in Control Voluntary Termination Benefits Letter (incorporated by reference to Exhibit 10.39 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.32*				Amendment to Letter Agreement of Employment with Jonathan Stern, dated May 8, 2003 (incorporated by reference to Exhibit 10.40 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.33*				Retention Bonus Letter Agreement with Jonathan Stern, dated May 13, 2003 (incorporated by reference to Exhibit 10.41 of Registrant's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2003).
10.34				Agreement, dated June 9, 2003, among Register.com, Inc., Barington Companies Equity Partners, L.P. and the other parties listed on Schedule A thereto (incorporated by reference to Exhibit 10.42 of Registrant's Current Report on Form 8-K dated June 10, 2003).
10.35*				Employment Agreement, dated June 16, 2003, with Peter A. Forman (incorporated by reference to Exhibit 10.43 of Registrant's Current Report on Form 8-K dated June 17, 2003).
10.36*				Amendment to Letter Agreement of Employment with Michael D. Pollack, dated May 23, 2003 (incorporated by reference to Exhibit (d)(1)(T) of Registrant's Schedule T-O filed with the SEC on August 5, 2003).
10.37*				Letter Agreement of Employment, dated as of November 15, 2002, with Alan Kipust (incorporated by reference to Exhibit (d)(1)(CC) of Registrant's Schedule T-O filed with the SEC on August 5, 2003).
10.38*				Letter of Agreement of Employment, dated August 6, 2003, with Monica Schulze Hodges (incorporated by reference to Exhibit (d)(1)(EE) of Registrant's Schedule T-O filed with the SEC on August 5, 2003).
10.39*				Amendment to Letter Agreement of Employment, dated as of November 19, 2003, with Alan Kipust.
21.1				Subsidiaries of Registrant.
23.1				Consent of PricewaterhouseCoopers LLP.

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Exhibit Number				Description
31.1				Certification of Peter A. Forman, Chief Executive Officer of the Company, pursuant to Rules 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934, as amended.
31.2				Certification of Jonathan Stern, Chief Financial Officer of the Company, pursuant to Rules 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934.
32.1				Certification by Peter A. Forman, Chief Executive Officer of the Company, pursuant to 18 U.S.C. §1350.
32.2				Certification by Jonathan Stern, Chief Financial Officer of the Company, pursuant to 18 U.S.C. §1350.

*	Indicates management contract or compensatory plan or arrangement.

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