Our common stock is traded on the National Market System of the Nasdaq Stock Market ("Nasdaq") under the symbol "CNET".

The following table sets forth the ranges of high and low trading prices of the common stock for the quarterly periods indicated, as reported by Nasdaq.

We have never declared or paid a cash dividend on our common stock. We intend to retain any earnings to cover operating losses and working capital fluctuations and to fund capital expenditures and expansion. We do not anticipate paying cash dividends on our common stock in the foreseeable future.

At March 15, 2002, the closing price for our common stock as reported by Nasdaq, was $6.40, and the approximate number of holders of record of our common stock was 920.

On July 1, 2001, we issued 773,341 shares of stock together with $10.8 million in cash in exchange for all of the outstanding stock of TechRepublic, Inc. in a transaction exempt from registration under Section 4(2) of the Securities Act of 1933. No underwriters were involved in the transaction.

The following table sets forth selected consolidated financial data and other operating information. The financial data and operating information do not purport to indicate results of operations as of any future date or for any future period. The financial data and operating information is derived from our audited consolidated financial statements and should be read in conjunction with the consolidated financial statements, related notes and other financial information included herein.

                                                           Fiscal Year Ended
                                       ------------------------------------------------------------------------
                                           2001           2000           1999           1998           1997
                                       ------------   ------------   ------------   ------------   ------------
Consolidated Statement of
 Operations Data:
Total revenues(a)................... $     285,805  $     264,019  $     112,345  $      57,477  $      33,640
Gross profit (deficit)..............       107,720        177,319         64,740         26,834         (4,203)
Total operating expenses(b).........     1,974,845        494,177        125,878         23,877         29,935
Operating income (loss).............    (1,867,125)      (316,858)       (61,138)         2,957        (34,138)
Total non-operating income (expense)      (180,760)      (276,721)       735,361             66          9,410
Net income (loss)(e)................    (1,989,488)      (483,980)       416,908          3,023        (24,728)
Basic net income (loss)
  per share......................... $      (14.52) $       (5.18) $        5.80  $        0.05  $       (0.44)
Diluted net income (loss)
  per share......................... $      (14.52) $       (5.18) $        5.05  $        0.04  $       (0.44)
Shares used in basic per
  share calculation.................   137,062,987     93,460,649     71,820,082     65,782,586     55,818,610
Shares used in diluted
  per share calculation.............   137,062,987     93,460,649     83,373,019     71,623,402     55,818,610

Consolidated Balance Sheet Data:

Cash and cash equivalents........... $      93,439  $     148,797  $      53,063  $      51,537  $      22,554
Total marketable debt securities.......    123,537        134,687        175,787             --             --
Working capital.....................       138,541        280,042        603,709         59,657         19,431
Total assets........................       814,780      2,862,361      1,230,311         88,357         58,262
Total debt(d)(e)....................       176,534        186,025        184,864          1,682          3,971
Stockholders' equity................       543,499      2,552,773        705,838         76,473         40,643

CNET Networks, Inc., the global source of technology and commerce-related services, primarily for the technology industry, produces a branded, global Internet network, print publications, a technology product database and radio programming for both businesses and individuals. Using unbiased content as our platform, we have built marketplaces for technology and consumer products, and, through our CNET Channel division, we are the primary provider of information powering the computer and electronics sales and distribution channels.

We earn revenues from:

• sales of interactive messaging, banner and sponsorship advertisements on our online network
• fees based on the number of our internet network users who click on an advertisement or text link to visit the websites of our merchant partners, which we refer to as "leads"
• advertising sales and licensing fees from our print publications and radio programming
• revenues from licensing our CNET Channel product database
• subscriptions to our ChannelOnline product procurement service

Cost of revenues includes costs associated with the production and delivery of our Internet channels, print publications, creation of our product database and related technology, and our radio programming. The principal elements of cost of revenues for our operations are payroll and related expenses for the editorial, production and technology staff, and costs for facilities and equipment.

Sales and marketing expenses consist primarily of payroll and related expenses, consulting fees and advertising expenses. General and administrative expenses consist of payroll and related expenses for executive, finance and administrative personnel, professional fees and other general corporate expenses.

The acquisitions of mySimon, Inc. (mySimon) in February 2000 and ZDNet, Inc. (ZDNet) in October 2000 significantly expanded our network and contributed significantly to revenues, cost of revenues and operating expenses from their acquisition dates in 2000. The acquisition of TechRepublic, Inc. (TechRepublic) in July 2001 also served to expand our network and contributed to revenues, cost of revenues and operating expenses beginning with the third quarter of 2001. These acquisitions were accounted for using the purchase method of accounting, and the financial results of their operations are included in our financial statements beginning on the dates of their respective acquisition.

During the fourth quarter of 2000, we completed our acquisition of ZDNet. Subsequent to the acquisition, we incurred costs related to integrating the operations of ZDNet with our operations through the integration of duplicative businesses. Throughout 2001 as part of the integration process, we evaluated our staffing requirements related to a more challenging business environment and focused on increasing efficiencies in our operations. We initiated reductions in our global workforce during 2001 resulting in the elimination of approximately 30% of our workforce. We also incurred additional expenses as we continued to lower our cost structure through the discontinuance of several non-profitable or non-growth areas of our Internet and broadcasting operations and the abandonment of certain leases. We have referred to these costs as "integration costs". These integration costs amounted to $43.0 million in 2001 and are included in cost of revenues, sales and marketing, and general and administrative expense, as more fully described below.

Additionally, we have invested in the creation of a standardized, global technology platform to deliver content and advertising, enable commerce and create universal data collection and registration systems aimed at long term cost reduction. This investment is expected to simplify our operations, build a scalable infrastructure, and create long term cost savings. We believe our integration efforts and creation of a standardized, global technology platform will result in costs savings that will better position us for a quicker return to profitability.

Our revenues, cost of revenues and operating expenses have grown substantially over the past three years. We incurred a net loss of $2.0 billion and $484.0 million in 2001 and 2000, respectively, and earned net income of $416.9 million in 1999. The net loss in 2001 was generated primarily from the impairment of goodwill of $1.1 billion, the amortization of goodwill and intangible assets of $678.6 million and the realized loss on the impairment of our privately and publicly held investments of $175.3 million. The net loss in 2000 was generated primarily from realized losses on the sale and write-down of investments of $399.1 million and amortization of goodwill and intangibles of $340.4 million. Net income in 1999 was generated primarily from gains on investment sales of $734.1 million, offset by an income tax provision of $257.3 million and an operating loss of $61.1 million. The operating loss for 1999 included expenses related to our marketing campaign of approximately $65.0 million to promote the CNET brand and goodwill amortization of $15.0 million.

Revenues were $285.8 million and $264.0 million for 2001 and 2000, respectively. The increase in revenues of $21.8 million from 2000 to 2001 was primarily attributable our acquisition of ZDNet on October 17, 2000. We recorded the financial results related to ZDNet beginning on the date of acquisition, thereby recording twelve months of revenues related to ZDNet in 2001 as compared to 2&half: months in 2000. Despite the addition of ZDNet, our revenues were negatively impacted by the general downturn in the economy experienced during 2001. While revenues were impacted by the general downturn in the economy, particularly related to technology advertising, our user base increased both within our online and publishing operations.

Online revenues were $241.2 million and $254.6 million for 2001 and 2000, respectively. Online revenues accounted for 84% and 96% of total revenues for 2001 and 2000, respectively. Online revenues for 2001 include ZDNet for the entire year in 2001 as compared to 2000, in which less than one quarter of ZDNet revenues are included. Our revenues were negatively impacted by the general downturn in the economy experienced during 2001 and with technology advertisers in particular. Average daily pages delivered in 2001 approximated 38.1 million, an increase of 76% over 21.7 million average daily pages in 2000. Although page views increased over prior year, revenues did not increase proportionately due to decreases in advertising by technology marketers and the fact that we currently derive very little revenue from our users. During 2001, we averaged approximately 320,000 leads per day from our shopping services, an increase of 26% over 253,000 leads per day in 2000.

Publishing revenues were $44.6 million in 2001 compared to $9.4 million in 2000. Publishing revenues accounted for 16% and 4% of total revenues for 2001 and 2000, respectively. The increase in publishing revenues of $35.2 million over prior year was primarily due to the inclusion of a full year of ZDNet print publications revenues for 2001 as compared to 2&half: months in 2000, as well as commencement of publishing operations in China during 2001.

A portion of our revenues were received in the form of securities of our customers. Revenues in the form of securities from our customers amounted to approximately $4.7 million and $19.6 million during 2001 and 2000, respectively. During the fourth quarter of 2001, we did not receive any revenue in the form of securities from our customers. Also during 2001 and 2000, approximately $18.4 million and $16.7 million, respectively, of our revenues were derived from barter transactions whereby we delivered advertisements on our Internet network in exchange for services of other companies, primarily advertisements on their Internet sites. These revenues and marketing expenses were recognized at the fair value of the advertisements received and delivered, and the corresponding revenues and marketing expenses were recognized when the advertisements were delivered. We expect that revenues derived from barter transactions in 2002 will be significantly less than those recorded in 2001.

Cost of revenues was $178.1 million and $86.7 million or 62% and 33% of revenues for 2001 and 2000, respectively. The increase in cost of revenues of $91.4 million from 2000 to 2001 was primarily attributable to the acquisitions of ZDNet, mySimon and TechRepublic, representing increases in personnel and personnel related costs for the production and delivery of our Internet services and our print publications. Approximately $8.7 million of integration costs were included in cost of revenues for the year ended December 31, 2001. We anticipate we will not incur significant integration costs related to cost of revenues in 2002.

Sales and marketing expenses were $129.5 million and $107.3 million for 2001 and 2000, respectively. Sales and marketing expenses represented 45% and 41% of total revenues in 2001 and 2000, respectively. The increase in sales and marketing expenses of $22.2 million from 2000 to 2001 related primarily to increases in personnel and related expenses, including ZDNet, mySimon and TechRepublic costs from the dates of their acquisition. Approximately $2.0 million of integration costs were included in sales and marketing for the year ended December 30, 2001. We anticipate we will not incur significant integration costs related to sales and marketing in 2002.

General and administrative expenses were $67.3 million and $31.0 million for 2001 and 2000, respectively. General and administrative costs represented 24% and 12% of total revenues for 2001 and 2000, respectively. The increase in general and administrative expenses of $36.3 million related primarily to approximately $32.3 million of integration costs for the year ended December 31, 2001. Approximately $21.3 million of these integration costs resulted from a lease abandonment charge, and the remainder primarily related to the integration of ZDNet and our reduction in workforce. We anticipate we will incur additional integration expenses related to general and administrative expenses in 2002.

Total depreciation expense was $24.4 million and $15.4 million for 2001 and 2000, respectively. The increase in depreciation expenses of $9.0 from 2000 to 2001 related primarily to capital additions of $48.3 million and an increase in fixed assets due to acquisition.

Amortization of goodwill and intangibles relates to the goodwill and intangibles we record for companies we have acquired for which we use the purchase method of accounting. Goodwill and intangibles amortization expenses were $678.6 million and $340.4 million for 2001 and 2000, respectively. The increase in 2001 over 2000 was primarily due to the full year impact of the amortization of goodwill associated with the ZDNet acquisition, which occurred in October 2000.

Due to the significant decline in our stock price once trading reopened after the events of September 11^th, the overall continued decline in market values of businesses in the media industry, and the continued further decline in the overall markets, we believed that there was an indication that the carrying value of our goodwill might not be recoverable. At the end of the third quarter of 2001, we evaluated whether an impairment had occurred by comparing the carrying value of these assets to undiscounted (and without interest charges) future cash flows. This recoverability analysis indicated that there had been an impairment to our enterprise-wide goodwill. Therefore, a charge of $1.1 billion was taken during the third quarter of 2001 to adjust the carrying value of these assets to their fair value.

We realized gains on sales of investments of $9.5 million and $134.9 million for 2001 and 2000, respectively. We realized losses on sale of investments of $8.6 million and $13.6 million in 2001 and 2000, respectively. The decrease in gains on sales of investments was primarily due to significant decrease in share prices of our public investments and the public markets as a whole.

We realized losses on impairment of investments of $175.3 million and $399.1 million in 2001 and 2000, respectively. In 2001, the realized losses related primarily to a general decrease in carrying value of our private investments. In 2000, the realized losses on sales and impairment of investments related primarily to realizing losses related to the impairment of several of our investments, the majority of which related to our holdings of NBC Internet, Inc. (NBCi).

Interest income is derived from our cash and cash equivalents and investments in marketable debt securities. Interest income was $11.9 million and $20.4 million for 2001 and 2000, respectively. Interest income decreased due to lower balances of marketable debt securities held in 2001 as compared to 2000, as well as to lower interest rates.

Interest expense is primarily incurred on our 5% Convertible Subordinated Notes. Interest expense was $15.6 million and $18.0 million for 2001 and 2000, respectively. The decrease related to the early repayment of our TRACES obligations.

In 2001 and 2000, our loss before income taxes was $2.0 billion and $593.6 million, respectively, against which we recorded a benefit for income taxes of $64.7 million and $109.6 million, respectively.

Effective tax rates for the years ended December 31, 2001 and 2000 were 3.16% and 18.46%, respectively. The income tax benefit recorded in 2001 and 2000 was lower than the statutory rates due to $1.8 billion and $340.4 million, respectively, of impairment of goodwill and nondeductible amortization of goodwill and other intangible assets, for which no tax benefit was recognized. The effective rate for 2001 was also reduced from the 2000 effective rate due to the increase in the valuation allowance. This increase is primarily related to losses on privately held investments for which there is sufficient uncertainty as to whether we will receive a tax benefit in the future.

At December 31, 2001, we had net operating losses of $194.8 million, which will begin to expire in 2011. Approximately $116.0 million was related to federal net operating losses from the ZDNet acquisition, which took place in 2000, and are subject to limitations on their utilization due to the change in ownership. Additional federal net operating losses of $52.1 million were generated in 2001 primarily related to losses on investments. The federal net operating losses generated in 2001 will be used to offset prior years' taxable income. Also included in the $194.8 million of net operating losses are cumulative foreign net operating losses of $26.7 million.

In conjunction with the accelerated repayment of our TRACES obligations in the third quarter of 2001, we recorded an extraordinary loss of $10.6 million ($6.3 million, net of tax benefit of $4.3 million) consisting of $9.0 million of early interest payment and a write-off of $1.6 million of capitalized debt issue costs.

We recorded a net loss of $2.0 billion or $14.52 per share and $484.0 million or $5.18 per share for 2001 and 2000, respectively. Our net loss increased from 2000 to 2001 by $1.5 billion. This increase was primarily due to a charge related to goodwill impairment of $1.1 billion, an increase in goodwill amortization of $338.2 million, as well as increased costs due to integration of our business of approximately $43.0 million.

Revenues were $264.0 million and $112.3 million for 2000 and 1999, respectively. The increase in revenues of $151.7 million from 1999 to 2000 was primarily attributable to revenues related to an increase in impression and lead-based advertising programs sold on our network and the October 2000 acquisition of ZDNet. This increase in advertising programs sold was due to increased demand from advertisers and increased availability of advertising programs.

Revenues were $254.6 million as compared to $112.3 million. Online revenues accounted for 96% of total revenues for 2000, and for 100% of revenue in 1999 as we did not acquire print publication operations until 2000. The increase in revenues of $142.3 million was primarily due to the availability of additional advertising programs due to an increase in the number of pages delivered to users of our network and increased leads sent to advertisers on our network. Average daily pages delivered in 2000 approximated 21.7 million, an increase of 90% over 11.4 million average daily pages in 1999. During 2000 we averaged approximately 253,000 leads per day from our shopping services, an increase of 81% over 140,000 leads per day in 1999.

With the acquisition of ZDNet in October 2000, we acquired a print publication for which we began to realize revenues in 2000. Publishing revenues were $9.4 million, or 4% of total revenues, for 2000.

A portion of our revenues was received in the form of securities of our customers. Revenues in the form of securities from our customers amounted to approximately $19.6 million and $6.0 million during 2000 and 1999 respectively. In addition, during 2000 and 1999, approximately $16.7 million and $5.9 million, respectively, of our revenues were derived from barter transactions whereby we delivered advertisements on our Internet channels in exchange for advertisements on the Internet sites of other companies. These revenues and marketing expenses were recognized at the fair value of the advertisements received and delivered, and the corresponding revenues and marketing expenses were recognized when the advertisements were delivered.

Cost of revenues were $86.7 million and $47.6 million or 33% and 42% of revenues for 2000 and 1999, respectively. The increase in cost of revenues of $39.1 million from 1999 to 2000 was primarily attributable to increased content on our Internet sites and increased number of average daily pages delivered from our Internet sites, including the addition of mySimon in March 2000 and ZDNet in October 2000. The cost increases related to producing additional content, including mySimon and ZDNet were primarily related to personnel and related expenses.

Sales and marketing expenses were $107.3 million and $94.7 million for 2000 and 1999, respectively. Sales and marketing expenses represented 41% and 84% of total revenues in 2000 and 1999, respectively.

The increase in sales and marketing expenses of $12.6 million from 1999 to 2000 related primarily to increases in personnel and related expenses, including ZDNet and mySimon costs from the dates of their acquisition. Total advertising expenses in 2000 were approximately $9.0 million lower than in 1999. The focus on advertising in 2000 shifted to online programs that were specific to driving traffic to our network as compared to our CNET brand building campaign in 1999.

General and administrative expenses were $31.0 million and $8.2 million for 2000 and 1999, respectively. General and administrative costs represented 12% and 7% of total revenues in 2000 and 1999, respectively. The increase in general and administration expenses of $22.8 million from 1999 to 2000 primarily related to costs related to facilitating our growth, such as increased personnel and personnel related costs related to the growth of our management team and costs related to acquisitions made during the year.

Total depreciation expense was $15.4 million and $8.0 million for 2000 and 1999, respectively. The increase in depreciation expenses of $7.4 million from 1999 to 2000, related primarily to depreciation on capital expenditures of $49.7 million and additional equipment acquired under the ZDNet acquisition.

Goodwill amortization expenses were $340.4 million and $15.0 million for 2000 and 1999, respectively. During 2000 we acquired six companies for which we used the purchase method of accounting. These acquisitions included mySimon and ZDNet. Goodwill attributed to these acquisitions totaled $2.2 billion, $668.4 million of which was related to the mySimon acquisition in March 2000 and $1.5 billion was related to the ZDNet acquisition in October 2000. During 1999 we acquired six companies for which we used the purchase method of accounting. Goodwill attributed to these acquisitions totaled $105.8 million. We amortized goodwill related to these acquisitions over the estimated realizable life of three years.

The gains on investment sales of $734.1 million for 1999 included a gain of approximately $541.2 million related to the contribution of our interest in Snap to NBCi. We recorded this gain based on the closing price of our NBCi stock on its first day of trading after the completion of the merger of Snap, Xoom and NBCi. Our investment in NBCi was recorded as an investment in marketable equity securities on our balance sheet and fluctuations in the value of this investment were recorded net of deferred taxes as other comprehensive income in the stockholders' equity section of our balance sheet. During 1999, we also sold a portion of our holdings of Vignette Corporation for a gain of approximately $172.3 million.

We realized losses on sale and impairment of investments of $399.1 million in 2000. The realized losses on sales and impairment of investments related primarily to our holdings of NBCi.

Interest income is derived from our cash and cash equivalents and investments in marketable debt securities. Interest income was $20.4 million and $9.5 million for 2000, and 1999, respectively.

Interest expense is primarily incurred on our 5% Convertible Subordinate Notes and our TRACES obligations. Interest expense was $18.0 million and $8.2 million for 2000 and 1999, respectively. The increase in interest expense in 2000 was due to the issuance of our TRACES obligations in February 2000.

In 2000, our loss before income taxes was $593.6 million against which we recorded a benefit for income taxes of $109.6 million. We had income before income taxes of $674.2 million in 1999. In 1999, we recorded a tax provision of $ 257.3 million.

Effective tax rates for the years ended December 31, 2000 and 1999 were 18.46% and 38.23%, respectively. The income tax benefit recorded in 2000 was lower than the statutory rates primarily due to $340.4 million of nondeductible amortization of goodwill and other intangible assets, for which no tax benefit was recognized.

We recorded a net loss of $484.0 million or $5.18 per share for 2000. We recorded net income of $416.9 million or $5.05 per diluted share for 1999. Net income decreased from $416.9 million in 1999 to a net loss of $484.0 million in 2000, a change of $900.9 million. This change related primarily to an increase in goodwill amortization of $325.4 million and a change related to gains and losses on the sale of investments of approximately $1.0 billion. We recorded gains on the sale of investments of $734.1 million in 1999 and a net loss on the sale and impairment of investments of $277.8 million in 2000. These changes were partially offset by a $366.9 million reduction in our income tax provision.

As of December 31, 2001, we had cash and cash equivalents of $93.4 million compared to $148.8 million on December 31, 2000, excluding restricted cash of $16.3 million and $20.5 million at December 31, 2001 and 2000, respectively. In addition on December 31, 2001, we had investments in short term and long term marketable debt securities of $123.5 million, compared to $134.7 million on December 31, 2000 and investments in marketable equity securities of $189,000 on December 31, 2001 compared to $59.9 million on December 31, 2000.

Net cash used in operating activities of $27.8 million in 2001 was primarily due to our net loss offset by charges for goodwill impairment, depreciation and amortization, and losses on sale or impairment of marketable securities and privately held investments. Net cash used in operating activities of $95.7 million in 2000 was primarily due to our net loss of $484.0 million, offset by depreciation and amortization of $371.1 million and losses on the sale or impairment of marketable securities and private investments. Net cash used in operating activities of $39.5 million in 1999 was primarily due to our operating loss of $61.1 million and changes in operating assets and liabilities (excluding deferred tax liabilities) of $17.9 million.

Net cash used in investing activities in 2001 was $37.0 million and included capital expenditures of approximately $48.3 million. In addition, we used approximately $20.8 million for acquisitions and investments in privately held companies and had proceeds of $29.1 million from the sale of marketable equity securities. Net cash provided by investing activities in 2000 of $117.4 million was due to proceeds from sales of marketable debt and equity securities of $408.0 million and cash provided from acquisitions of $26.9 million less purchases of marketable debt and equity securities, of $191.3 million, investments in privately held companies of $76.5 million, and purchases of equipment and programming assets of $49.7 million. Net cash used in investing activities in 1999 of $133.5 million was due to purchases of marketable debt and equity securities less proceeds from sales of marketable debt and equity securities of $19.3 million, investments in privately held companies of $39.4 million, cash paid for acquisitions of $43.7 million and purchases of equipment and programming assets of $31.0 million.

Cash flows provided by financing activities in 2001 of $9.5 million were primarily related to the exercise of options. Cash flows provided by financing activities in 2000 of $74.0 million were primarily related to net proceeds from the issuance of derivative instruments which related to the NBCi TRACES offering in February 2000, proceeds from the exercise of options and warrants and the purchase of treasury stock. Cash flows provided by financing activities of $174.6 million in 1999 were primarily attributable to the proceeds from the issuance of convertible debt and the issuance of common stock through the exercise of options and warrants.

We expect capital expenditures for fiscal 2002 to be between $15.0 million and $20.0 million.

As of December 31, 2001, we had obligations outstanding under notes payable totaling $176.5 million. Notes payable included $172.9 million of 5% convertible subordinated notes, due 2006. Such obligations were incurred to obtain proceeds for general corporate purchases, to finance acquisitions and marketing expenditures. In addition at December 31, 2001, we had capital lease obligations outstanding of $0.5 million related to the purchase of equipment.

The following summarizes our contractual obligations at December 31, 2001, and the effect such obligations are expected to have on our liquidity and cash flow in future periods:

     (000s)                                             LESS THAN                  AFTER
      December 31, 2001                     TOTAL        1 YEAR     1 - 3 YEARS   3 YEARS
                                         ------------  -----------  ------------ ---------
      Long-term debt................... $      176.5  $       0.1  $        0.2 $   176.2
      Non-cancellable operating
       lease obligations.................      290.4         26.9          71.3     192.2
      Capital lease obligations........          0.5          0.3           0.2        --
                                         ------------  -----------  ------------ ---------
                                        $      467.4  $      27.3  $       71.7 $   368.4
                                         ============  ===========  ============ =========

The liability for abandoned leases at December 31, 2001 of $14.7 million over the next four years for future cash expenditures related to abandoned facilities is included in the above table under the caption Non-cancelable operating lease obligations. The operating lease obligations presented above have not been reduced for the difference between the expected cash outflows from our lease obligations and the expected cash inflows from sublease income related to these vacated properties.

We believe that existing funds will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for the next 12 months. We do not anticipate the need for additional funding in the foreseeable future. However, any acquisitions completed in the future that would require cash funding may affect our liquidity and funding needs. Although we have not presently identified alternate or additional sources of long-term capital, if our cash needs were to change, or if we are unable to generate sufficient cash flow for operations by 2006 when our 5% convertible subordinated notes are due, we will need to raise additional capital through debt or equity offerings in the public or private markets. Our ability to raise such additional capital will depend on market conditions at that time.

The following items are contingencies, which may affect our liquidity in future periods.

In conjunction with the ZDNet acquisition, we assumed a guarantee of the obligations of Ziff Davis Media Inc. under a New York City office lease for a total of 399,773 square feet. In connection with that guarantee, we also have a letter of credit for $15.0 million outstanding as a security deposit. The letter of credit is secured by cash and is recorded as restricted cash in our balance sheet. This lease expires in 2019. The average cost per square foot is approximately thirty dollars over the remaining term of the lease. Through a sublease from Ziff Davis Media Inc., we currently occupy 49,140 square feet of the office space covered under this lease. Ziff-Davis Media Inc. currently occupies 206,176 square feet of this space. There are two additional sublessees, The Bank of New York and Softbank, who collectively occupy a total of 144,457 square feet. As of December 31, 2001, the total minimum lease payments remaining until the end of the lease term were $196.5 million, excluding the amounts attributable to our sublease. If the financial condition of any of the sublessees or the primary lessee were to deteriorate and thereby result in an inability to make their lease payments, we would be required to make additional lease payments under the guarantee.

In August 1999, the Simon Property Group (SPG) filed a trademark infringement suit against mySimon, Inc., a subsidiary of CNET acquired on February 28, 2000, in federal district court in Indianapolis. SPG alleged that the mySimon trademark infringed SPG's "Simon" trademark. On August 31, 2000, following a trial on the subject, the jury found in favor of SPG and awarded damages against mySimon in the amount of $11.5 million in compensatory damages, $5.3 million for corrective advertising, and $10.0 million in punitive damages. On September 25, 2000, the court entered an order establishing an escrow for royalties pending final resolution of the litigation where mySimon pays into escrow 2% of its gross cash receipts each month. On January 24, 2001, the judge eliminated the $11.5 million compensatory damages award, reduced the $10.0 million punitive damages award to the statutory minimum of $50,000, and offered SPG the opportunity to accept ten dollars (a remittitur) for damages attributable to corrective advertising in exchange for immediate entry of judgment for the entire case in lieu of a re-trial on the subject of corrective advertising.

On February 14, 2001, SPG filed its election to seek a retrial on the issue of corrective advertising in lieu of the ten-dollar remittur. Under Indiana law, the amount of punitive damages is capped at the greater of three times compensatory damages or $50,000. Accordingly, it is not possible to determine the amount of punitive damages, if any, that may be payable until the issue of damages for corrective advertising has been resolved. It is not possible to predict the amount of damages attributable to corrective advertising that could be awarded in a re-trial, however such amounts, if settled adversely to us, could be material to our results of operations and financial condition. On December 7, 2001, mySimon filed a motion for a new trial based on newly discovered evidence it believes SPG should have produced prior to the August 2000 trial. Discovery surrounding the new evidence is ongoing. (Also see Item 3 - "Legal Proceedings").

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements. The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make a number of estimates and assumptions relating to the reporting of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate these estimates, including those related to bad debts, investments, goodwill and intangible assets, lease abandonment, income taxes, contingencies and litigation. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions or conditions.

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

We recognize revenues once the following criteria are met:

• Persuasive evidence of an arrangement exists
• Delivery of our obligation to our customer has occurred
• The price to be charged to the buyer is fixed or determinable
• Collectibility of the fees to be charged is reasonably assured

We have several revenue streams. For each revenue stream, evidence of the arrangement, delivery and pricing may be different. For all revenue streams, we determine that collectibility is reasonably assured through a standardized credit review to determine each customer's credit worthiness.

We recognize revenues from the sale of our interactive messaging and banner advertisements on our online network in the period in which the advertisements are delivered. The arrangements are evidenced either by insertion order or contract, which stipulate the types of advertising to be delivered and pricing. Our customers are billed based on a discounted list price with no amounts subject to refund. When recognizing revenues, the discounts granted are applied to each type of advertisement purchased based on the relative fair value of each element without regard to the discount.

We refer to the fees charged to merchants based on the number of users who click on an advertisement or text link to visit websites of our merchant partners as "leads". For leads, the arrangement is evidenced by a contract that stipulates the lead fee. The fee becomes fixed and determinable upon delivery of the lead. These revenues are recognized in the period in which the leads are delivered to the merchant, and are therefore not subject to refund.

Advertising revenues from our print publications are recognized in the month that the related publications are sent to subscribers or become available at newsstands. Revenues for subscriptions to these publications are recognized on a straight-line basis over the subscription period. Newsstand revenue from our print publications is recognized when the publications are delivered to the newsstand at which time a reserve is recorded against the value of the publications delivered based on the number of magazines that we expect to be returned. To ensure these reserves are adequate, we review the sell-through history of the publications on a monthly basis.

Customers of CNET Channel enter into contracts that allow access to the product database and product procurement services for a specified period of time. Upon execution of a contract and billing for the services, we record deferred revenue for the entire fee. This deferred revenue is recognized on a straight-line basis over the period of the arrangement. The amounts under the contract are not refundable after the customer has used the service.

On occasion, we enter into revenue arrangements that involve both customers and other unrelated third parties. We determine whether to recognize such revenues on a gross or net basis depending on whether we are the primary obligor, determine the pricing, bear the financial risk and other factors outlined in the Financial Accounting Standards Board Emerging Issues Task Force Issue 99-19, "Reporting Revenue Gross as a Principal versus Net as an Agent".

We trade advertising on our Internet sites in exchange for advertisements on the Internet sites of other companies. These revenues are recognized in the period in which the advertisements are delivered based on the fair market value of the services delivered. We determine the fair market value of the service delivered based upon amounts charged for similar services in non-trade deals within the previous six-month period.

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We base our allowances on periodic assessment of our customer's liquidity and financial condition through credit rating agencies reports, financial statement reviews and historical collection trends. If the financial condition of our customers were to deteriorate and thereby result in an inability to make payments, additional allowances would be required.

WE MAY EXPERIENCE FLUCTUATIONS IN OPERATING RESULTS AND MAY NOT BE ABLE TO ADJUST SPENDING IN TIME TO COMPENSATE FOR ANY UNEXPECTED REVENUE SHORTFALL.

Although we have no current plans to expand into additional international markets, we plan to expand our international operations to take advantage of existing opportunities. We have wholly owned operating subsidiaries in England, France, Germany, Switzerland, Singapore and Australia. In addition, we have an international presence through joint venture and other partnership arrangements in China, Korea and Italy. We also have license arrangements in various other countries throughout the world.

                                                              December 31,
                                                        ------------------------
                                                           2001         2000
                                                        -----------  -----------
                        ASSETS
                   Current Assets:
  Cash and cash equivalents........................... $    93,439  $   148,797
  Investments in marketable debt securities...........      46,760       52,864
  Investments in marketable equity securities.........         189       55,512
  Accounts receivable, net ...........................      56,495       95,573
  Other current assets................................      11,048       43,254
  Deferred income tax.................................      18,235        8,445
                                                        -----------  -----------
   Total current assets...............................     226,166      404,445

  Restricted cash.......................................    16,270       20,514
  Investments in marketable debt securities...........      76,777       81,823
  Investments in marketable equity securities.........          --        4,375
  Property and equipment, net.........................      79,043       59,288
  Other assets........................................      41,036      188,427
  Intangible assets, net................................    96,135      136,394
  Goodwill, net.......................................     279,353    1,967,095
                                                        -----------  -----------
   Total assets....................................... $   814,780  $ 2,862,361
                                                        ===========  ===========
        LIABILITIES AND  STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable.................................... $     7,324  $    19,045
  Accrued liabilities.................................      80,224       92,973
  Current portion of long-term debt...................          77        5,831
  Deferred tax liabilities............................          --        6,554
                                                        -----------  -----------
     Total current liabilities........................      87,625      124,403

Non-current liabilites
  Long-term debt......................................     176,457      180,194
  Other liabilities...................................       7,199        4,991
                                                        -----------  -----------
     Total liabilities................................     271,281      309,588
Stockholders' equity:
  Common stock; $0.0001 par value; 400,000,000 shares
    authorized; 138,300,625 and 135,159,843 shares
    issued and outstanding in 2001 and 2000,
    respectively......................................          14           14
  Notes receivable from stockholders....................      (563)      (1,038)
  Deferred stock compensation.........................        (481)        (508)
  Additional paid-in-capital..........................   2,695,443    2,665,025
  Accumulated other comprehensive income..............     (12,789)      37,872
  Treasury stock, at cost.............................     (30,409)     (30,364)
  Retained deficit....................................  (2,107,716)    (118,228)
                                                        -----------  -----------
     Total stockholders' equity.......................     543,499    2,552,773
                                                        -----------  -----------
        Total liabilities and stockholders' equity.... $   814,780  $ 2,862,361
                                                        ===========  ===========

                                                 Year Ended December 31,
                                            ----------------------------------------
                                                2001          2000          1999
                                            ------------  ------------  ------------
Revenues:
Internet.................................. $    241,199  $    254,570  $    112,345
Publishing..................................     44,606         9,449            --
                                            ------------  ------------  ------------
     Total revenues.........................    285,805       264,019       112,345

Cost of revenues..........................      178,085        86,700        47,605
                                            ------------  ------------  ------------
     Gross profit.........................      107,720       177,319        64,740
                                            ------------  ------------  ------------
Operating expenses:
   Sales and marketing....................      129,542       107,321        94,657
   General and administrative.............       67,284        31,008         8,213
   Depreciation...........................       24,417        15,442         7,972
   Amortization of goodwill and
     intangible assets....................      678,602       340,406        15,036
   Goodwill impairment......................  1,075,000            --            --
                                            ------------  ------------  ------------
    Total operating expenses..............    1,974,845       494,177       125,878
                                            ------------  ------------  ------------
    Operating loss........................   (1,867,125)     (316,858)      (61,138)
Non-operating income (expense):
   Realized gain on sale of investments.....      9,547       134,911       734,138
   Realized loss on sale of investments.....     (8,553)      (13,610)           --
   Realized loss on impairment of
     public investments.....................    (26,866)     (393,425)           --
   Realized loss on impairment of
     privately held investments...........     (148,389)       (5,659)           --
   Interest income........................       11,924        20,364         9,471
   Interest expense.........................    (15,615)      (17,981)       (8,248)
   Other..................................       (2,808)       (1,321)           --
                                            ------------  ------------  ------------
    Total non-operating income (expense)..     (180,760)     (276,721)      735,361
                                            ------------  ------------  ------------
    Income (loss) before income taxes
     and extraordinary item...............   (2,047,885)     (593,579)      674,223
     Income tax expense (benefit).........      (64,657)     (109,599)      257,315
                                            ------------  ------------  ------------
    Income (loss) before extraordinary item. (1,983,228)     (483,980)      416,908
   Extraordinary loss due to early debt
     repayment, net of tax benefit..........      6,260            --            --
                                            ------------  ------------  ------------
    Net income (loss)..................... $ (1,989,488) $   (483,980) $    416,908
                                            ============  ============  ============
Basic income (loss) per share
  before extraordinary loss................$     (14.47) $      (5.18) $       5.80
                                            ============  ============  ============
Basic net income (loss) per share......... $     (14.52) $      (5.18) $       5.80
                                            ============  ============  ============
Diluted  income (loss) per share
  before extraordinary loss................$     (14.47) $      (5.18) $       5.05
                                            ============  ============  ============
Diluted net income (loss) per share....... $     (14.52) $      (5.18) $       5.05
                                            ============  ============  ============
Shares used in calculating
  basic per share data....................  137,062,987    93,460,649    71,820,082
                                            ============  ============  ============
Shares used in calculating
  diluted per share data..................  137,062,987    93,460,649    83,373,019
                                            ============  ============  ============

                                                       Notes                           Accumulated
                                   Common Stock      Receivable Deferred   Additional     Other      Treasury Stock                       Total
                                --------------------   from       Stock      Paid-In   Comprehensiv---------------------   Retained    Stockholders'
                                   Shares    Amount  StockholdeCompensation  Capital   Income(Loss)   Shares     Amount    Deficit        Equity
                                ------------ ------- --------- ----------- ----------- ----------- ------------ -------- ------------  ------------
Balances as of
 December 31, 1998.............  68,709,379 $     7 $      -- $        --     127,357 $        --           -- $     -- $    (50,891) $     76,473
Exercise of stock options
 and warrants..................   2,480,870      --        --          --       8,086          --           --       --           --         8,086
Employee stock purchase plan...      31,924      --        --          --         934          --           --       --           --           934
Other comprehensive income,
 net of deferred tax...........          --      --        --          --          --     121,409           --       --           --       121,409
Issuance of common stock for
 acquisitions..................   2,700,447      --        --          --      50,574          --           --       --         (265)       50,309
Tax benefits from exercises of
 stock options.................          --      --        --          --      31,719          --           --       --           --        31,719
Net income.....................          --      --        --          --          --          --           --       --      416,908       416,908
                                ------------ ------- --------- ----------- ----------- ----------- ------------ -------- ------------  ------------
Balances as of
 December 31, 1999.............  73,922,620       7        --          --     218,670     121,409           --       --      365,752       705,838
Exercise of stock options
 and warrants..................   2,730,919      --        --          --      20,267          --           --       --           --        20,267
Employee stock purchase plan...     160,511      --        --          --       2,464          --           --       --           --         2,464
Other comprehensive loss,
 net of deferred tax...........          --      --        --          --          --     (83,537)          --       --           --       (83,537)
Deferred compensation..........          --      --        --        (508)         --          --           --       --           --          (508)
Issuance of common stock in
 relation to acquisitions......  58,345,793       7        --          --   2,402,119          --           --       --           --     2,402,126
Purchase of treasury stock.....          --      --        --          --          --          --   (1,064,000) (30,364)          --       (30,364)
Notes issued to stockholders....         --      --    (1,038)         --          --          --           --       --           --        (1,038)
Tax benefits from exercises of
 stock options.................          --      --        --          --      21,505          --           --       --           --        21,505
Net loss.......................          --      --        --          --          --          --           --       --     (483,980)     (483,980)
                                ------------ ------- --------- ----------- ----------- ----------- ------------ -------- ------------  ------------
Balances as of
 December 31, 2000............. 135,159,843      14    (1,038)       (508)  2,665,025      37,872   (1,064,000) (30,364)    (118,228)    2,552,773
Exercise of stock options
 and warrants..................   1,960,818      --        --          --      13,095          --           --       --           --        13,095
Employee stock purchase plan...     300,240      --        --          --       2,074          --           --       --           --         2,074
Other comprehensive loss,
 net of deferred tax...........          --      --        --          --          --     (50,661)          --       --           --       (50,661)
Deferred compensation from
 acquisition....................         --      --        --        (126)         --          --           --       --           --          (126)
Deferred compensation
 amortization..................          --      --        --         153          --          --           --       --           --           153
Issuance of common stock
 to discharge a liability.......    106,383      --        --          --       1,100          --           --       --           --         1,100
Issuance of common stock in
 relation to acquisitions......     773,341      --        --          --       7,868          --           --       --           --         7,868
Purchase of treasury stock.....          --      --        --          --          --          --      (38,579)     (45)          --           (45)
Repayment of stockholders' notes         --      --       475          --          --          --           --       --           --           475
Tax benefits from exercises of
 stock options.................          --      --        --          --       6,281          --           --       --           --         6,281
Net loss.......................          --      --        --          --          --          --           --       --   (1,989,488)   (1,989,488)
                                ------------ ------- --------- ----------- ----------- ----------- ------------ -------- ------------  ------------
Balances as of
 December 31, 2001............. 138,300,625 $    14 $    (563)$      (481)  2,695,443 $   (12,789)  (1,102,579)$(30,409)$ (2,107,716) $    543,499
                                ============ ======= ========= =========== =========== =========== ============ ======== ============  ============

                                                        Year Ended December 31,
                                                   -----------------------------------
                                                      2001         2000        1999
                                                   -----------  ----------  ----------
Cash flows from operating activities:
  Net income (loss).............................. $(1,989,488) $ (483,980) $  416,908
  Adjustments to reconcile net income (loss) to n
   cash provided by (used in) operating activitie
    Depreciation and amortization................     704,883     371,089      31,139
    Goodwill impairment..........................   1,075,000          --          --
    Deferred taxes.................................   (48,130)   (187,388)    217,283
    Noncash interest.............................       3,210       1,855         839
    Extraordinary loss.............................    10,609          --          --
    Allowance for doubtful accounts..............         901      (7,727)      2,956
    Services exchanged for cost method
     investments.................................      (4,697)    (19,559)     (6,021)
    (Gain) loss on sale and impairment of
     marketable securities and privately held
     investments.................................     174,261     277,783    (734,138)
    Loss on disposal of fixed assets.............       8,108          --          --
    Foreign currency translation gain (loss).....     (11,852)      1,038          --
    Changes in operating assets and
     liabilities, net of acquisitions:
      Accounts receivable........................      41,574     (16,147)    (10,664)
      Other current assets.......................      30,703     (29,358)    (16,940)
      Other assets...............................      (2,463)    (28,305)     (3,805)
      Accounts payable...........................     (12,462)     (4,485)      7,978
      Accrued liabilities........................     (17,695)      5,011       9,627
      Tax related liabilities....................          --                  13,575
      Other long term liabilities................       3,487       2,990          --
      Benefit from exercises of stock options....       6,281      21,505      31,719
                                                   -----------  ----------  ----------

        Net cash used in operating activities....     (27,770)    (95,678)    (39,544)
                                                   -----------  ----------  ----------
Cash flows from investing activities:
  Purchase of marketable debt securities.........    (106,066)   (180,816)   (214,557)
  Purchase of marketable equity securities.......                 (10,516)    (15,950)
  Proceeds from sale of marketable debt
    securities...................................     109,161     222,641      37,539
  Proceeds from sale of marketable equity
    securities...................................      29,066     185,408     173,663
  Investments in privately held companies........     (10,015)    (76,462)    (39,448)
  Net cash paid for acquisitions.................     (10,834)     26,881     (43,743)
  Capital expenditures...........................     (48,298)    (49,722)    (30,992)
                                                   -----------  ----------  ----------
        Net cash provided by (used in)
          investing activities...................     (36,986)    117,414    (133,488)
                                                   -----------  ----------  ----------
Cash flows from financing activities:
  Net proceeds from issuance of
   convertible debt..............................          --          --     167,220
  Net proceeds from issuance of derivative
   instruments...................................          --      81,631          --
  Payments received on stockholders' notes.........       475          --          --
  Net proceeds from employee stock purchase plan.       2,075       2,464         934
  Purchase of treasury stock.....................         (45)    (30,364)         --
  Net proceeds from exercise of options
   and warrants..................................      13,095      20,267       8,086
  Principal payments on borrowings...............      (6,081)         --      (1,682)
                                                   -----------  ----------  ----------

        Net cash provided in financing activities       9,519      73,998     174,558
                                                   -----------  ----------  ----------
Net increase in cash and cash equivalents........     (55,237)     95,734       1,526
Effect of exchange rate changes on cash
 and cash equivalents..............................      (121)

Cash and cash equivalents at beginning of period.     148,797      53,063      51,537
                                                   -----------  ----------  ----------
Cash and cash equivalents at end of period....... $    93,439  $  148,797  $   53,063
                                                   ===========  ==========  ==========
Supplemental disclosure of cash flow
 information:
  Interest paid.................................. $    26,337  $   14,325  $    4,205
  Taxes paid..................................... $            $   83,348  $    2,625
Supplemental disclosure of noncash
 transactions:
  Issuance of debt for acquisitions.............. $        --  $       --  $   10,098
  Issuance of common stock to
   discharge of a liability...................... $     1,100  $       --  $       --
  Issuance of common stock for
   acquisitions.................................. $     7,742  $2,402,126  $   50,553
  Capital lease obligations incurred to
   purchase equipment............................ $       623  $       --  $       --

CNET Networks, Inc. (CNET) was incorporated in the state of Delaware in December 1992 and is a global media company producing a branded Internet network, a technology product database, print publications, and radio programming for both businesses and individuals. CNET currently operates in one business segment focused on providing technology-related information to users and customers.

(2) BALANCE SHEET COMPONENTS

                                                December 31
                                                  (000s)
                                          ------------------------
                                             2001         2000
                                          -----------  -----------

Cash and Cash Equivalents:
 Commercial paper....................... $    30,668  $    99,846
 U. S. government agencies................     6,002           --
 Money market mutual funds..............      29,474       12,170
 Cash...................................      27,295       36,781
                                          -----------  -----------
Cash and cash equivalents................$    93,439  $   148,797
                                          ===========  ===========
Accounts receivable:
  Accounts receivable....................$    79,368  $   114,725
  Allowance for doubtful accounts.........   (22,873)     (19,152)
                                          -----------  -----------
Accounts receivable, net.................$    56,495  $    95,573
                                          ===========  ===========
Property and equipment:
 Land................................... $       570  $       589
 Buildings..............................       7,481        6,482
 Computer equipment.....................      60,059       52,167
 Production equipment...................       3,843        2,868
 Office equipment, furniture & fixtures.      12,007        9,069
 Software...............................      16,319       12,770
 Leasehold improvements.................      34,706       12,583
 Assets in progress.....................      10,207        1,896
                                          -----------  -----------
                                             145,192       98,424
 Less accumulated depreciation
    and amortization....................     (66,149)     (39,136)
                                          -----------  -----------
Property and equipment, net..............$    79,043  $    59,288
                                          ===========  ===========
Intangible assets:
 Intangible assets...................... $   159,611  $   147,521
 Accumulated amortization...............     (63,476)     (11,127)
                                          -----------  -----------
Intangible assets, net.................. $    96,135  $   136,394
                                          ===========  ===========
Goodwill:
 Goodwill............................... $ 2,324,979  $ 2,311,865
 Accumulated amortization...............  (2,045,626)    (344,770)
                                          -----------  -----------
Goodwill, net........................... $   279,353  $ 1,967,095
                                          ===========  ===========
Accrued liabilities:
 Compensation and related benefits...... $    18,773  $    37,384
 Lease abandonment........................     7,748           --
 Marketing and advertising..............       4,053       11,128
 Acquisition and divestiture............          --       10,579
 Deferred revenue.......................      17,926       19,921
 Tax-related liabilities..................     4,493        4,120
 Other..................................      27,231        9,841
                                          -----------  -----------
Accrued liabilities......................$    80,224  $    92,973
                                          ===========  ===========

(3) ACQUISITIONS

On July 1, 2001, CNET acquired TechRepublic, Inc. (TechRepublic) from Gartner, Inc. The total purchase price was $19.8 million. Final agreement on the purchase price has been reached, resulting in a change in the purchase price allocation from that previously reported. CNET paid approximately $10.8 million in cash and issued 773,341 shares common stock valued at approximately $7.8 million in exchange for all outstanding shares of TechRepublic stock. Acquisition costs were approximately $1.2 million. The number of shares of common stock exchanged was based on the average closing price of CNET stock for ten consecutive trading days ending on the second trading day immediately prior to the closing.

The TechRepublic acquisition has been reflected in the balance sheet at December 31, 2001. The statement of operations of CNET for the year ended December 31, 2001 includes the results of operations of this business since the date of acquisition. The transaction has been accounted for using the purchase method of accounting. The total purchase price of $19.8 million has been allocated to the tangible and intangible assets acquired based on estimates of their respective fair values as follows: intangible assets of approximately $7.0 million that are being amortized over a three-year period, goodwill of approximately $10.7 million, other assets of $9.0 million primarily consisting of accounts receivable of $3.4 million and fixed assets of $4.7 million, and liabilities of $6.9 million.

Although the provisions of SFAS 142 are not effective in their entirety until January 1, 2002, the goodwill acquired in this purchase falls under the condition of SFAS 142 requiring no amortization of goodwill arising from a transaction completed after June 30, 2001. Therefore, goodwill arising from this transaction has not been amortized. CNET's goodwill amortization expense would have been increased by $1.8 million if amortization had been recorded in 2001 for the goodwill acquired in the TechRepublic purchase.

As part of the purchase price allocation, CNET established a liability of approximately $1.9 million for costs related to the abandonment of several leased properties previously occupied by TechRepublic employees. The total costs of these properties included $1.8 million of cash costs and $294,000 of noncash costs. The cash portion was present-valued using a discount rate of 6.0%, CNET's expected borrowing rate, over a five-year period, resulting in a present value of $1.9 million. As of December 31, 2001, $294,000 in noncash costs and $153,000 of cash expenditures were charged against this accrual. At December 31, 2001, a balance of $1.4 million remained in the accrual. (Also, see footnote 11 "Commitments and Contingencies".)

CNET recorded the following transactions using purchase accounting.

On December 15, 2000, CNET completed the acquisition of CNET Asia Ltd., a joint venture in which CNET held a 19% interest. CNET paid $6.0 million cash for the remaining 81% interest in the joint venture, and recorded goodwill of $6.2 million.

On November 3, 2000, CNET acquired Quote Desk Software Corporation. CNET paid $7.2 million in cash and issued 138,854 shares of common stock valued at $4.4 million, and recorded goodwill of $7.3 million.

On October 17, 2000, CNET completed the acquisition of Ziff Davis, Inc. CNET issued 47 million shares of common stock with a total value of $1.7 billion as of date of closing. CNET recorded goodwill and other intangible assets of $1.5 billion.

On July 14, 2000, CNET completed the acquisition of the remaining 80.1% of Apollo Solutions, Inc. (Apollo). CNET had acquired a 19.9% interest in Apollo on December 8, 1999. CNET paid $2.0 million in cash and issued 312,000 shares of common stock valued at $9.4 million, and recorded goodwill of $17.2 million for all of the outstanding shares of Apollo.

On February 29, 2000, CNET completed the acquisition of mySimon Inc. (mySimon). CNET issued 10.7 million shares of common stock and issued 364,730 options with a combined value of $678.2 million, and recorded goodwill of $668.4 million for all the outstanding shares of mySimon.

On February 15, 2000, CNET completed the acquisition of Digital Media Services, Inc., (DMS). CNET paid $10.7 million in cash and issued 148,611 shares of common stock valued at $7.3 million, and recorded goodwill of $18.0 million for all the outstanding shares of DMS.

CNET recorded the following transactions using purchase accounting.

On November 4, 1999, CNET completed the acquisition of Manageable Software Services Inc., (MSSI). CNET issued 58,394 shares of common stock to MSSI shareholders valued at $3.0 million, and recorded goodwill of $3.0 million in exchange for all outstanding shares of MSSI.

On October 7, 1999, CNET completed the acquisition of SavvySearch Limited, (Savvy). CNET paid $4.4 million in cash, issued 307,489 shares of common stock to Savvy shareholders valued at $17.6 million, and recorded goodwill of $22.1 million, in exchange for all outstanding shares of Savvy.

On July 29, 1999, CNET completed the acquisition of Nordby International, Inc. (Nordby). CNET paid $5.0 million in cash, issued a note payable due July 29, 2001 for $5.0 million that was paid in full during 2001. CNET also issued 230,017 shares of common stock to Nordby shareholders valued at $10.0 million, and recorded goodwill of $20.0 million in exchange for all outstanding shares of Nordby.

On July 27, 1999, CNET completed the acquisition of GDT, S.A., a Swiss Societe Anonyme, (GDT), which has since been renamed CNET Channel Services, S.A. CNET paid $30.0 million in cash, issued 429,185 shares of common stock valued at $20.0 million, and recorded goodwill of $49.4 million in exchange for all of the outstanding shares of GDT. CNET Channel Services, S.A. is based in Switzerland and has built a multi-language, multi-market database of product information.

On February 26, 1999, CNET acquired substantially all of the assets of Winfiles.com (Winfiles) for a total purchase price of $11.5 million, of which $5.75 million was paid in cash and a note for $5.75 which was paid August 28, 2000. CNET recognized $11.0 million in goodwill.

The following acquisitions were accounted for as a pooling of interests. The financial results of all of these acquisitions were recorded in CNET's consolidated financial statements effective January 1, 1999.

On April 30, 1999, CNET completed the acquisition of Sumo, Inc. (Sumo) in which CNET issued 469,484 shares of common stock to the stockholders of Sumo.

On March 22, 1999, CNET completed the acquisition of KillerApp Corporation (KillerApp). CNET issued an aggregate of 1,046,800 shares of its common stock to the former KillerApp shareholders as consideration.

On February 19, 1999, the CNET completed the acquisition of AuctionGate Interactive, Inc., (AuctionGate). CNET issued 214,168 shares of common stock in exchange for all of the outstanding shares of AuctionGate.

On February 16, 1999, CNET completed the acquisition of NetVentures, Inc. (NetVentures). CNET issued 414,408 shares of common stock in exchange for all of the outstanding shares of NetVentures.

The following is a summary of available-for-sale marketable debt investments:

                                              December 31, 2001
                                                 (000s)
                           ----------------------------------------------------
                                       Gross      Gross               Estimated
                                     Unrealized Unrealized Interest     Fair
                             Cost      Gains     Losses    Receivable   Value
                           --------  ---------  ---------  ---------  ---------
Short term investments
  Corporate obligations.. $ 15,495  $      48  $      --  $     231  $  15,774
  Commercial paper.......   10,952         --         (3)        --     10,949
  Government agencies....   19,976         --         (4)        65     20,037
                           --------  ---------  ---------  ---------  ---------
                            46,423         48         (7)       296     46,760
                           --------  ---------  ---------  ---------  ---------
Long term investments
  Corporate obligations..   43,700        323        (42)       836     44,817
  Government agencies....   31,962          9       (134)       123     31,960
                           --------  ---------  ---------  ---------  ---------
                            75,662        332       (176)       959     76,777
                           --------  ---------  ---------  ---------  ---------
                          $122,085  $     380  $    (183) $   1,255  $ 123,537
                           ========  =========  =========  =========  =========



                                              December 31, 2000
                                                 (000s)
                           ----------------------------------------------------
                                       Gross      Gross               Estimated
                                     Unrealized Unrealized Interest     Fair
                             Cost      Gains     Losses    Receivable   Value
                           --------  ---------  ---------  ---------  ---------
Short term investments
  Corporate obligations.. $ 14,314  $      12  $     (14) $     270  $  14,582
  Commercial paper.......   35,259                                      35,259
  Government agencies....    3,000         --         --         23      3,023
                           --------  ---------  ---------  ---------  ---------
                            52,573         12        (14)       293     52,864
                           --------  ---------  ---------  ---------  ---------
Long term investments
  Corporate obligations..   64,381         27     (1,176)     1,379     64,611
  Government agencies....   17,017         --        (54)       249     17,212
                           --------  ---------  ---------  ---------  ---------
                            81,398         27     (1,230)     1,628     81,823
                           --------  ---------  ---------  ---------  ---------
                          $133,971  $      39  $  (1,244) $   1,921  $ 134,687
                           ========  =========  =========  =========  =========

The contractual maturities of CNET's short term investments at December 31, 2001 were one year or less while CNET's long term investments had contractual maturities between one and three years. Expected maturities may differ from contractual maturities because issuers of the securities have the right to prepay or call obligations without prepayment penalties.

The following is a summary of available-for-sale marketable equity investments:

In February 2000, CNET issued an indexed debt instrument in a public offering of Trust Automatic Common Exchange Securities (TRACES) by NBCi through an Automatic Common Exchange Security Trust (the Trust). The TRACES offering consisted of 1,250,000 instruments, which were sold for $81.38 per share, with gross proceeds to CNET of $102.0 million ($82.0 million net of $20.0 million prepaid interest described below). The TRACES bore interest at an annual rate of 7.25%, which was to be paid on a quarterly basis by the Trust. The TRACES were payable on February 15, 2003.

The TRACES were used to hedge the fair value of the designated NBCi common stock. On April 9, 2001, NBC announced that it would purchase the remaining outstanding shares of NBCi that it did not already own at a price of $2.19 a share. Accordingly as of March 31, 2001, CNET adjusted its holdings in the designated NBCi stock and its long-term debt related to the TRACES to reflect the buy-back price. At that time, both the stock and the TRACES had a carrying value of $2.7 million resulting in a realized gain of $1.6 million on the debt with an offsetting loss on the stock for the current year.

On August 31, 2001, NBC acquired the remaining NBCi shares. Based on the TRACES agreement, upon this event, the maturity date for the TRACES accelerated, and the holders received an amount of cash per security equal to the cash consideration paid by NBC for each share of NBCi stock plus a pro rata amount of the proceeds of the liquidation of Treasury securities held by the Trust for the purpose of funding interest on the TRACES. In conjunction with this accelerated repayment, CNET recorded an extraordinary loss of $10.6 million ($6.3 million, net of tax benefit of $4.3 million) consisting of $9.0 million of early interest payment, which was not refundable, and a write-off of $1.6 of capitalized debt issue costs.

On October 17, 2000, CNET completed the acquisition of ZDNet. As a result of this acquisition, CNET assumed $614,000 of notes payable. These notes remained outstanding after a tender offer by Ziff-Davis of its 8&half:% Senior Subordinated Notes due 2008 with interest payable semiannually on May 1 and November 1.

On July 27, 1999, CNET completed the acquisition of GDT. As a result of the acquisition of GDT, CNET assumed a 5% mortgage loan for the GDT building with a principal balance of $700,000 as of December 31, 2000. The term of the loan is 36 years. On April 24, 2000, GDT S.A., renamed CNET Channel Services, S.A., acquired additional property that CNET funded with additional 5% mortgage loans of $2.4 million over a 20-year term. At December 31, 2001 CNET's obligation under these loans was $3.0 million.

On July 29, 1999, CNET completed the acquisition of Nordby International, Inc., a Colorado corporation, ("Nordby") through a merger of Nordby into CNET. Pursuant to the merger, CNET issued a note payable due July 29, 2001 for $5.0 million with an imputed interest rate of 8%. In June 2001, CNET entered into an agreement with the holder of the promissory note whereby a payment of $295,000 was made in July 2001 to an affiliate of the note holder, and then on October 3, 2001, approximately $5.6 million was paid to the note holder in full satisfaction of the note and all accrued interest outstanding.

On March 8, 1999, CNET completed a private placement with gross proceeds of $172.9 million of 5% Convertible Subordinated Notes, due 2006 (the "Notes") The Notes are convertible into CNET's common stock after June 7, 1999 at a conversion price of $37.40625 per share, subject to certain conditions, at the option of the note holder.

The aggregate annual principal payments for the notes and loans payable outstanding as of December 31, 2001, are summarized as follows:

As of December 31, 2001, 2000, and 1999, the number of options exercisable was 13,499,284, 12,537,710 and 2,944,082, respectively, and the weighted average exercise price of those options was $18.06, $17.83 and $5.94, respectively. As of December 31, 2001, there were 1,130,111 additional shares available for grant under the plans.

CNET applies APB Opinion No. 25 in accounting for the Plans and, accordingly, no compensation cost has been recognized for the Plans in the financial statements. Had CNET determined compensation cost based on the fair value at the grant date for its stock options under SFAS 123, CNET's net income (loss) and net income (loss) per share would have been decreased (increased) to the pro forma amounts indicated below:

                                            Year Ended December 31,
                                        (000s, except per share data)
                                       ---------------------------------
                                          2001        2000       1999
                                       -----------  ---------  ---------
Net income (loss)
  As reported........................ $(1,989,488) $(483,980) $ 416,908
  Proforma........................... $(2,043,408) $(544,462) $ 389,596
Basic net income (loss) per share
  As reported........................ $    (14.52) $   (5.18) $    5.80
  Proforma........................... $    (14.91) $   (5.83) $    5.42
Diluted net income (loss) per share
  As reported........................ $    (14.52) $   (5.18) $    5.05
  Proforma........................... $    (14.91) $   (5.83) $    4.67

The effects of applying SFAS 123 in this pro forma disclosure is not indicative of the effects on reported results for future years. SFAS No. 123 does not apply to awards prior to 1995.

The weighted-average fair value of options granted in 2001, 2000, and 1999, was $5.72, $16.27 and $23.74, respectively.

The fair value of each option grant is estimated on the date of grant using the Black Scholes option-pricing model with the following weighted-average assumptions used for grants in 2001, 2000, and 1999: no dividend yield, expected volatility of 99%, 96% and 92%, respectively, risk-free interest rate of 4.42%, 6% and 5%, respectively, and an expected life of five years for all years.

The following table summarizes information about stock options outstanding as of December 31, 2001:

                            Options Outstanding          Options Exercisable
                   ----------------------------------  ---------------------
                                Weighted
                     Number      Average    Weighted     Number      Weighted
                   Outstanding  Remaining    Average   Exercisable   Average
    Range of          As of     Contractual Exercise      As of      Exercise
  Exercise Prices   12/31/01      Life        Price     12/31/01      Price
  ---------------  -----------  ---------   ---------  -----------   -------
$  0.07  $  0.07        3,720        6.6  $     0.07        3,720  $   0.07
$  0.57  $  0.60        9,260        4.5  $     0.59        7,956  $   0.60
$  1.08  $  1.18       36,184        7.6  $     1.18       25,088  $   1.18
$  2.15  $  3.08      212,988        5.1  $     2.64      183,316  $   2.69
$  3.25  $  4.82    5,871,369        9.6  $     3.43      156,689  $   3.54
$  4.96  $  7.38    4,431,789        5.9  $     6.57    4,134,284  $   6.56
$  7.80  $ 11.67    6,588,118        7.6  $    10.14    1,581,038  $   8.82
$ 11.88  $ 17.69    2,322,340        7.5  $    13.61    1,222,686  $  13.83
$ 18.02  $ 27.00    8,587,676        8.4  $    20.88    3,210,167  $  21.35
$ 27.08  $ 40.44    2,577,137        7.6  $    32.79    2,012,840  $  33.03
$ 40.67  $ 60.81    1,375,879        7.2  $    52.14      913,855  $  50.93
$ 61.09  $ 74.00      106,205        7.8  $    65.19       47,645  $  65.49
                   -----------                         -----------
$  0.07  $ 74.00   32,122,665        7.9  $    15.27   13,499,284  $  18.06
                   ===========                         ===========

In conjunction with the acquisition of mySimon, 4,344,529 shares were issued in the form of restricted and issued stock in exchange for acquiree stock options. Restricted stock is subject to repurchase by CNET at between $7.50 and $13.17 per share in the event of termination of employment. Such shares are released from the repurchase provisions on a ratable basis as the stockholder remains in the employment of CNET. At December 31, 2001, 13,142 shares of this restricted stock remained outstanding.

In July 1996, CNET adopted an Employee Stock Purchase Plan that covers substantially all employees, whereby participants may elect to purchase CNET's stock. The purchase price varies each quarter and is 85% of the lower of the closing price at the beginning of the quarter and the closing price at the end of the quarter for the first and third quarters of the year or the lower of the closing price at the beginning of the prior quarter and the closing price at the end of the current quarter for the second and fourth quarters of the year. Employee contributions consist of a percentage of their compensation. The maximum percentage of compensation that an employee may contribute to purchase CNET stock is 15%.

CNET periodically assesses the carrying amounts of its long-lived assets, identifiable intangibles and goodwill to determine if there has been an event or change in circumstances that would indicate that the carrying amounts of these assets may not be recoverable. The decline in CNET's stock price once trading reopened after the events of September 11^th, the continued decline in market values of businesses in the media industry and the continued further decline in the overall markets indicated that the carrying amounts of these assets may not be recoverable. CNET evaluated whether an impairment had occurred by comparing the carrying value of its long-lived assets, including goodwill, to undiscounted (and without interest charges) future cash flows. CNET measured the impairment charge by comparing the carrying value of the assets to their fair value. This analysis was performed at the enterprise-wide level due to the lack of available cash flow information associated with the individual intangible assets. The analysis indicated that an impairment charge of $1.1 billion needed to be recorded and is reflected in the results of operations for the year ended December 31, 2001.

The following table sets forth the computation of net income (loss) per share:

                                                  Year Ended December 31,
                                               (000s except share and per share data)
                                             ---------------------------------------
                                                 2001         2000          1999
                                             ------------  -----------  ------------
Basic Earnings Per Share
Income (loss) available to common
   stockholders before extraordinary item.. $ (1,983,228) $  (483,980) $    416,908
Extraordinary loss, net of tax benefit.......     (6,260)          --            --
                                             ------------  -----------  ------------
Adjusted income (loss) available to
   common stockholders......................$ (1,989,488) $  (483,980) $    416,908
                                             ============  ===========  ============

Weighted average shares - basic............  137,062,987   93,460,649    71,820,082
                                             ============  ===========  ============
Basic income (loss) per common share before
  extraordinary item........................$     (14.47) $     (5.18) $       5.80
Extraordinary loss per common share,
  net of tax benefit.........................      (0.05)          --            --
                                             ------------  -----------  ------------
Basic income (loss) per common share........$     (14.52) $     (5.18) $       5.80
                                             ============  ===========  ============

Diluted Earnings Per Share
Income (loss) available to common
   stockholders before extraordinary item...$ (1,983,228) $  (483,980) $    416,908
Interest income, net of taxes available to
   convertible subordinated noteholders....           --           --         4,471
                                             ------------  -----------  ------------
Net income (loss) available to common
   stockholders before extraordinary item.... (1,983,228)    (483,980)      421,379
Extraordinary loss, net of tax benefit.......     (6,260)          --            --
                                             ------------  -----------  ------------
Adjusted income (loss) available to
   common stockholders..................... $ (1,989,488) $  (483,980) $    421,379
                                             ============  ===========  ============

Weighted average shares....................  137,062,987   93,460,649    71,820,082
  Incremental shares from assumed conversio
        Options............................           --           --     7,362,648
        Warrants...........................           --           --        427989
        Convertible subordinated note......           --           --     3,762,301
                                             ------------  -----------  ------------
Adjusted weighted average
   shares - diluted........................  137,062,987   93,460,649    83,373,020
                                             ============  ===========  ============

Diluted income (loss) per common share before
  extraordinary item........................$     (14.47) $     (5.18) $       5.05
Extraordinary loss per common share,
  net of tax benefit.........................      (0.05)          --            --
                                             ------------  -----------  ------------
Diluted net income (loss) per share........ $     (14.52) $     (5.18) $       5.05
                                             ============  ===========  ============

Basic and diluted net loss per share for the year ended December 31, 2001 does not include the effect of approximately 2,405,972 common shares related to options with an average exercise price of $6.97, approximately 189,336 shares of unvested restricted stock with an average exercise price of $1.22, and approximately 4,622,624 common shares related to the Convertible Subordinated Debt offering with an average exercise price of $37.40 because their effect is anti-dilutive. Basic and diluted net loss per share for the year ended December 31, 2000 does not include the effect of approximately 6,545,111 common shares related to options with an average exercise price of $16.79, approximately 544,628 shares of unvested restricted stock with an average exercise price of $1.21, and approximately 4,622,624 common shares related to the Convertible Subordinated Debt offering with an average exercise price of $37.40 because their effect is anti-dilutive. Diluted net income per share for the year ended December 31, 1999, does include the effect of approximately 7,362,648 common shares related to options with an average exercise price of $10.46, 427,989 common shares related to warrants with an average exercise price of $1.38, and the potential conversion of convertible debt to approximately 3,762,301 common shares related to the Convertible Subordinated Debt offering with an average exercise price of $37.40 because their effect is dilutive.

The shares used in calculating the basic and diluted net income (loss) per share have been adjusted in prior periods to reflect the Sumo, NetVentures, AuctionGate, and KillerApp transactions as outstanding for all periods, and the two-for-one stock splits on March 8, 1999 and May 10, 1999.

CNET has adopted the provisions of SFAS No. 130, "Reporting Comprehensive Income", which established standards for reporting and disclosures of comprehensive income and its components (revenues, expenses, gains and losses) in a full set of general purpose financial statements.

The changes in the components of other comprehensive income (loss) for the years ended December 31, 2001, 2000, 1999 are as follows:

                                                           December 31,
                                                             (000s)
                                             ---------------------------------------
                                                 2001         2000          1999
                                             ------------  -----------  ------------
Unrealized holding gain (loss)from:
 Marketable equity securities.............. $    (64,682) $  (297,742) $    203,463
 Marketable debt securities................           --           25        (1,230)
 Debt obligations..........................           --       97,344            --
Deferred tax asset (liability) related to
  unrealized holding gains (losses)........       25,873      117,874       (80,893)
                                             ------------  -----------  ------------
                                                 (38,809)     (82,499)      121,340
Foreign currency translation gain (loss)...      (11,852)      (1,038)           69
                                             ------------  -----------  ------------
                                            $    (50,661) $   (83,537) $    121,409
                                             ============  ===========  ============

The components of other comprehensive income were:

                                                  Year Ended December 31,
                                                             (000s)
                                             ---------------------------------------
                                                 2001         2000          1999
                                             ------------  -----------  ------------
Net income (loss)...........................$ (1,989,488) $  (483,980) $    416,908
                                             ============  ===========  ============
Other comprehensive income, net of tax:
 Unrealized holding gains arising
  during the period........................ $     13,416  $     8,772  $    121,340
 Unrealized holding losses arising
  during the period........................      (52,225)     (91,271)           --
 Foreign currency translation gain (loss)..      (11,852)      (1,038)           69
                                             ------------  -----------  ------------
  Comprehensive income (loss).............. $ (2,040,149) $  (567,517) $    538,317
                                             ============  ===========  ============

CNET has several non-cancelable operating leases primarily for general office, facilities, and equipment that expire over the next 18 years. Future minimum lease payments under these leases are as follows:

                                  Operating
                                    Leases
  YEAR ENDING DECEMBER 31,          (000s)
- --------------------------------  ----------
          2002.................. $   26,911
          2003..................     26,045
          2004..................     24,706
          2005..................     20,594
          2006..................     16,716
         Thereafter.............    175,478
                                  ----------
 Total minimum lease payments... $  290,450
                                  ==========

Minimum payments have not been reduced by minimum sublease rentals of $6.6 million due through August 2005 under noncancelable subleases. Sublease income from operating leases was $1.1 million for the year ended December 31, 2001. Rental expense from operating leases amounted to $15.6 million, $8.8 million and $4.2 million for the years ended December 31, 2001, 2000 and 1999, respectively.

During 2001, CNET purchased $623,000 of computer equipment under capital leases. Total accumulated amortization on these assets was $94,000 at December 31, 2001. The current portion of $267,000 is included in accrued liabilities, and the long-term portion of $218,000 is included in other non-current liabilities. Future minimum lease payments under these leases are as follows:

                                   Capital
                                    Leases
  YEAR ENDING DECEMBER 31,          (000s)
- --------------------------------  ----------
          2002.................. $      267
          2003..................        185
          2004..................         33
                                  ----------
 Total minimum lease payments... $      485
                                  ==========

At December 31, 2000 and 1999, CNET held no equipment under capital lease agreements.

In May 2000, CNET entered into a lease in San Francisco for a building of approximately 283,000 square feet, and commenced occupancy in the fourth quarter of 2001. This building houses a majority of CNET's San Francisco employees and will accommodate growth. During the fourth quarter of 2000, CNET completed its acquisition of ZDNet, which increased the number of facilities under lease, particularly in San Francisco, New York and Cambridge, Massachusetts. Subsequent to the acquisition, CNET evaluated its staffing requirements related to a more challenging business environment and focused on increasing efficiencies in its operations, which resulted in reductions in workforce in the first and third quarters of 2001.

During the third and fourth quarters of 2001, CNET completed an evaluation of its real estate requirements taking into account the workforce reductions that had occurred, the completion of its new facility in San Francisco, and redundant facilities elsewhere within the U.S and internationally. This evaluation resulted in the consolidation or abandonment of several leased facilities. Due to the decline in the commercial real estate markets in these locations, it is expected that these leased facilities will be vacant for several quarters, and once they are subleased, it will be at rates below current contractual requirements. In connection with these abandoned leases, CNET recorded an expense of $21.3 for the year ended December 31, 2001, as well as an adjustment to the ZDNet purchase allocation of $1.6 million. The charge of $21.3 million consisted of $19.6 million in the third quarter of 2001 for U.S. facilities and $1.7 million in the fourth quarter of 2001 for non-U.S. facilities. These charges were based on the difference between the expected cash outflows and the expected cash inflows related to these vacated properties. The net expense was estimated to be approximately $16.7 million over the next five years. This amount was present valued using a discount rate of 6.0% resulting in a charge of $14.1 million and purchase price adjustment of $1.6 million. In addition, approximately $7.2 million of leasehold improvements and furniture were to be written-off. The total charge of $21.3 million is reflected in the Statement of Operations for the year ended December 31, 2001 in the General and administrative caption. As of December 31, 2001, cash charges of $2.4 million and noncash charges of $7.1 million have been taken against this accrual. At December 31, 2001, a balance of $13.3 million remained in this accrual. (Also see footnote 3 "Acquisitions" for a discussion of lease abandonment costs associated with the acquisition of TechRepublic.)

As a result of the acquisition of ZDNet, CNET assumed a $20.4 million liability relating to ZDNet's prior divestiture of Ziff Davis Media and ZDNet's pre-acquisition exit of one of its divisions. This liability was comprised of investment banking and legal services and exit costs including office closure and contract termination costs. As of December 31, 2000, a balance of $5.9 million was remaining. During 2001, CNET incurred cash charges of $3.3 million and non-cash charges against the provision. In addition, approximately $2.0 million of the liability was reversed as it was no longer required, and therefore, goodwill related to the ZDNet purchase was reduced. The balance of this provision was $619,000 at December 31, 2001.

In conjunction with the ZDNet acquisition, CNET assumed a guarantee of the obligations of Ziff Davis Media Inc. under a New York City office lease for a total of 399,773 square feet. In connection with that guarantee, CNET also has a letter of credit for $15.0 million outstanding as a security deposit. This lease expires in 2019. The average cost per square foot is approximately thirty dollars over the remaining term of the lease. Through a sublease from Ziff Davis Media Inc., CNET currently occupies 49,140 square feet of the office space covered under this lease. Ziff Davis Media Inc. currently occupies 206,176 square feet of this space. There are two additional sublessees, The Bank of New York and Softbank, who collectively occupy a total of 144,457 square feet. As of December 31, 2001, the total minimum lease payments remaining until the end of the lease term were $196.5 million, excluding the amounts attributable to CNET's sublease which are disclosed in the operating lease schedule above.

For the years ended December 31, 2001, 2000 and 1999 there were no customers that contributed more than 10% of CNET's revenues.

In early 2000, ZDNet sold the majority of its print publishing assets to Ziff Davis Media Inc., an unrelated party. On April 7, 2000, prior to its acquisition by CNET, ZDNet entered into a five-year content licensing agreement with Ziff Davis Media Inc., whereby ZDNet had the exclusive online rights to use and redistribute materials produced by certain Ziff Davis Media Inc. print publications and the exclusive right to operate web sites for those print publications. Under this agreement, ZDNet was to pay an annual royalty to Ziff Davis Media Inc. based on worldwide online revenues of ZDNet, on a sliding scale of 5% royalty on the first $100.0 million in revenues, 4% on the next $50.0 million and 3% on revenues above $150.0 million yearly. This agreement was amended on January 19, 2001 such that beginning March 1, 2001 CNET was able to use the content of those print publications on a semi-exclusive basis, for twelve months, with all rights expiring on March 1, 2002 and CNET will transfer the publication web sites over to Ziff Davis Media Inc. over the course 2001. Under the amended terms, payment for the period from March 1, 2001 to March 1, 2002, was fixed at $4.5 million.

On April 7, 2000, ZDNet also entered into a three-year agreement with Ziff Davis Media Inc., whereby ZDNet would have the right to receive certain services (production, distribution, circulation and benchmark information) related to the publication of ZDNet's Computer Shopper print publication. ZDNet was to pay all direct production, distribution and circulation costs, plus a share of departmental overhead expenses (approximately $1.0 million annually), plus a $5.0 million annual service fee. This agreement was amended on January 19, 2001 such that, beginning March 1, 2001, CNET will have the option of receiving the same services for up to two years, through March 1, 2003. CNET will pay all direct production, distribution and circulation costs, but will not incur the cost of a share of departmental overhead expenses, plus a $2.0 million one time service fee.

Based on the criteria established by SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information", currently CNET globally operates in one business segment focused on providing technology-related information to businesses and individuals. CNET has wholly owned operating subsidiaries in England, France, Germany, Switzerland, Singapore and Australia. These properties were primarily acquired through the ZDNet acquisition in October 2000. International revenues prior to the ZDNet acquisition were not significant. Revenue is attributed to individual countries according to the international online property that generated the revenue. International revenues accounted for 15% and 4% of net revenues during the years ended December 31, 2001 and 2000, respectively. No single foreign country accounted for more than 10% of net revenues for the year ended December 31, 2001.

The following table sets forth net revenues and long-lived assets information for geographic areas:

         (000s)                                    U.S.    International   Total
                                                -----------  --------- -----------
         2001
         Net revenues......................... $   243,351  $  42,454 $   285,805
         Long-lived assets....................     438,170     16,361     454,531
         2000
         Net revenues......................... $   252,253  $  11,766 $   264,019
         Long-lived assets....................   2,150,339     12,438   2,162,777

Long-lived assets consist of property and equipment, intangible assets and goodwill. Goodwill is held only by the U.S. parent as it is not practicable to disaggregate goodwill by geographic area, and therefore, CNET's goodwill is considered to be held on an enterprise-wide basis.

CNET has entered into an agreement with Clear Channel Communications for the exclusive right to provide programming and sell advertising on a San Francisco, California radio station owned by Clear Channel. In 2001, CNET paid approximately $900,000 to Clear Channel for those rights. Randall Mays, a Director and Chief Financial Officer of Clear Channel, is a member of CNET's Board of Directors and serves as Chairman of the Audit Committee. The agreement was originally negotiated with AMFM, Inc., the owner of the San Francisco radio license, prior to the acquisition of that company by Clear Channel.

CNET and an affiliate of Softbank Corp. were joint owners of a company that is the licensee and operator of CNET's ZDNet brand and online content in Japan. In March 2002, CNET sold its interest in the company to Softbank and entered into a three-year license by which it will continue to license the ZDNet brand and content to that company. In addition, CNET and an affiliate of Softbank Corp. are joint owners of a company that is the licensee and operator of CNET's ZDNet brand and online content in Korea. Neither transaction is material to CNET's financial results. Eric Hippeau, President and Executive Managing Director of Softbank International Ventures, is a member of CNET's Board of Directors and serves on the Compensation Committee.

Included in other assets on the accompanying balance sheets is a loan to a former employee of CNET for $500,000 with an interest rate of 7% per annum due and payable on April 30, 2002.

On May 9, 1999, CNET entered into an agreement to sell its effective 40% ownership in Snap.com, a free Internet directory, search and navigation portal service controlled by NBC Multimedia, Inc. The new company was called NBC Internet (NBCi). NBCi was established upon the merger of SNAP! LLC, Xoom.com, Inc., and certain Internet related properties of the National Broadcasting Company, Inc. (NBC) or its affiliates, including NBC.com, Videoseeker.com, NBC Interactive Neighborhood and a 10% interest in CNBC.com. Upon the closing of the transaction in November, 1999, CNET received common stock aggregating approximately 13% of NBC Internet, which is a publicly traded company. In connection with the transaction, CNET recorded a net gain of $324.4 million in 1999. On August 31, 2001, NBC acquired all NBCi stock not already owned by NBC. CNET no longer has any common stock holdings in NBCi.

In August 1999, Simon Property Group (SPG) filed a trademark infringement suit against mySimon, Inc. (mySimon), a subsidiary of CNET acquired on February 28, 2000, in federal district court in Indianapolis. SPG alleged that the mySimon trademark infringed SPG's "Simon" trademark. On August 31, 2000, following a trial on the subject, the jury found in favor of SPG and awarded damages against mySimon in the amount of $11.5 million in compensatory damages, $5.3 million for corrective advertising, and $10.0 million in punitive damages. On September 25, 2000, the court entered an order establishing an escrow for royalties pending final resolution of the litigation where mySimon pays into escrow 2% of its gross cash receipts each month.

On January 24, 2001, the judge eliminated the $11.5 million compensatory damages award, reduced the $10.0 million punitive damages award to the statutory minimum of $50,000, and offered SPG the opportunity to accept ten dollars (a remittitur) for damages attributable to corrective advertising in exchange for immediate entry of judgment for the entire case in lieu of a re-trial on the subject of corrective advertising. On February 14, 2001, SPG filed its election to seek a re-trial on the issue of corrective advertising in lieu of the ten-dollar remittitur. The re-trial originally scheduled to begin on October 29, 2001 and rescheduled to January 9, 2002, has now been taken off calendar pending a ruling from the court on whether the re-trial should be dismissed. Under Indiana law, the amount of punitive damages is capped at the greater of three times compensatory damages or $50,000. Accordingly, it is not possible to determine the amount of punitive damages, if any, that may be payable until the issue of damages for corrective advertising has been resolved. It is not possible to predict the amount of damages attributable to corrective advertising that could be awarded in a re-trial, however such amounts, if settled adversely to CNET, could be material to CNET's results of operations and financial condition. Accordingly, no provision for ultimate settlement of these issues has been included in the accompanying condensed consolidated financial statements.

The judge's January 24, 2001 order also provided that if the jury's verdict of trademark infringement is upheld on appeal, mySimon will be required to change its name and domain name. The judge's January 24, 2001 order states that when final judgment is entered he will stay the name change pending the completion of the appeal process. If the jury's verdict of infringement is upheld on appeal, mySimon will have 60 days to change its name after the appellate court rules and will be entitled to redirect traffic from www.mysimon.com to its new website for one year following the name change. mySimon plans to appeal the finding of trademark infringement once judgment is entered in the lower court. In 2001, SPG appealed the judge's order to the 7^th Circuit, requesting that mySimon change its name and domain name immediately, and that mySimon be limited to thirty days to redirect users to a new website. The 7^th Circuit dismissed SPG's appeal on March 13, 2002.

On December 7, 2001, mySimon filed a motion for a new trial based on newly discovered evidence it believes SPG should have produced prior to the August 2000 trial. Discovery surrounding the new evidence is ongoing.

On October 17, 2000, we acquired Ziff-Davis, Inc. (Ziff-Davis), which was a defendant in the following cases:

Following a decline in the price per share of Ziff-Davis common stock leading up to October 1998, eight securities class action suits were filed against Ziff-Davis and certain of its directors and officers in the United States District Court for the Southern District of New York. The complaints alleged that the registration statement relating to the ZDNet tracking stock IPO on April 28, 1998 contained false and misleading statements and failed to disclose facts that could have indicated an impending decline in Ziff-Davis' revenue. The complaints sought on behalf of a class of purchasers of Ziff-Davis common stock from the date of the IPO through October 8, 1998, unspecified damages, interest, fees and costs, rescission and injunctive relief such as the imposition of a constructive trust upon the proceeds of the IPO. The parties have agreed to settle the case, and the court entered a preliminary settlement order on December 4, 2001. A hearing to consider final approval of the settlement was held on March 13, 2002. CNET estimates at this time that it will incur no liability due to its insurance coverage. Accordingly, no provision for such matters has been included in the consolidated financial statements.

Two shareholder class action lawsuits were filed in the United States District Court for the Southern District of New York on August 16, 2001 and September 26, 2001, against Ziff- Davis, Eric Hippeau and Timothy O'Brien, and investment banks that were the underwriters of the public offering of ZDNet series of Ziff-Davis stock (the ZDNet Offering). One of the complaints also names CNET as a defendant, as successor in liability to Ziff-Davis. The complaints are similar and allege violations of the Securities Act of 1933, and one of the complaints also alleges violations of the Securities Exchange Act of 1934. The complaints allege the receipt of excessive and undisclosed commissions by the underwriters in connection with the allocation of shares of common stock to certain investors in the ZDNet Offering 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 ZDNet Offering was false and misleading in violation of the securities laws because it did not disclose the arrangements. The action seeks damages in an unspecified amount. The action is being coordinated with over 300 nearly identical actions filed against other companies. No date has been set for any responses to the complaints. CNET believes it is entitled to indemnification from the underwriters, however it has not received confirmation of coverage to date.

There are no other legal proceedings to which CNET is a party, other than ordinary routine litigation incidental to its business that is not expected to be material to the business or financial condition of CNET.

(16) QUARTERLY FINANCIAL DATA (unaudited)

                                                      QUARTER ENDED
                                          (000s, EXCEPT PER SHARE DATA)
                                     --------------------------------------------------
                                       March        June        September     December
                                        31           30            30            31
                                     ---------    ---------    -----------    ---------
2001(3)
Net Revenues....................... $  75,152    $  71,089    $    69,316    $  70,248
Gross profit.......................    32,390       25,835         19,172       30,323
Amortization of
  goodwill and intangibles.........   205,460      206,794        206,262       60,086
Operating loss(8)..................  (227,466)    (231,807)    (1,330,557)(7)  (77,295)
Loss before income taxes and
  extraordinary item.................(341,632)(6) (235,412)    (1,390,875)     (79,966)
Loss before extraordinary item.....  (316,575)    (218,123)    (1,367,373)     (81,157)
Net loss...........................  (316,575)    (218,123)    (1,373,633)     (81,157)
Basic net loss per share
   before extraordinary item....... $   (2.33)   $   (1.60)   $     (9.93)   $   (0.59)
Diluted net loss per share
   before extraordinary item....... $   (2.33)   $   (1.60)   $     (9.93)   $   (0.59)


2000(1)(2)
Net Revenues....................... $  44,366    $  52,239    $    56,439    $ 110,975
Gross profit.......................    26,846       37,928 (5)     38,720 (5)   73,825 (5)
Amortization of
  goodwill and intangibles.........    28,114       66,259         67,859      178,174
Operating loss.....................   (23,711)     (63,826)       (61,899)    (167,422)
Income (loss) before income taxes..   (27,690)       9,747        (24,345)    (551,291)(4)
Net loss...........................   (27,690)     (20,655)       (43,551)    (392,084)
Basic net loss per share........... $   (0.36)   $   (0.24)   $     (0.50)   $   (3.12)
Diluted net loss per share......... $   (0.36)   $   (0.24)   $     (0.50)   $   (3.12)

4. In the fourth quarter of 2000, CNET incurred an impairment loss of $393.4 million on certain marketable equity securities and $0.5 million on certain privately held investments for which an other-than-temporary loss was deemed to have occurred.
5. A reclassification between cost of revenues and general and administrative expenses done during 2001 resulted in gross profit for the second, third and fourth quarters of 2000 differing from what was previously reported in order to conform to current year presentation.
6. In the first quarter of 2001, CNET incurred an impairment loss of $25.4 million on certain marketable equity securities and $89.3 million on certain privately held investments for which an other-than-temporary loss was deemed to have occurred.

7. In the third quarter of 2001 due to the significant decline in CNET's stock price, CNET recorded a goodwill impairment charge of $1.1 billion to reduce the carrying value of the assets to their fair value.
8. Quarterly integration expense charges for the first, second, third and fourth quarters of 2001 were $4.7 million, $3.3 million, $28.7 million, and $6.4 million, respectively. Integration expenses included a charge in connection with the abandonment of certain real estate leases of $19.6 million in the third quarter of 2001 related to U.S. facilities and of $1.7 million in the fourth quarter of 2001 related to non-U.S. facilities.

                        Balance at               Charged to Charged to                   Balance
                        Beginning                Costs and    Other       Deductions     at End
                        of Period  Acquisitions  Expenses   Accounts      Describe      of Period
                        ---------  ------------  ---------  ---------     ---------     ---------
         2001
- ----------------------
Allowance for
  doubtful accounts    $  19,152  $      2,820  $  17,098  $      --     $  16,197 (1) $  22,873

         2000
- ----------------------
Allowance for
  doubtful accounts    $   4,678  $     22,201  $   8,320  $      --     $  16,047 (1) $  19,152

         1999
- ----------------------
Allowance for
  doubtful accounts    $   1,722  $         --  $   4,745  $     210 (2) $   1,999 (1) $   4,678

(1) Accounts written off.
(2) Amounts charged to revenue to cover underdelivery of guaranteed impressions.

None.

Incorporated by reference from the Registrant's definitive Proxy Statement for its 2002 annual meeting, which will be filed pursuant to Regulation 14A (the "Proxy Statement"), under the caption "Management."

Incorporated by reference from the Proxy Statement, under the caption "Executive Compensation and Other Information," but specifically excluding the information under the captions "-- Performance Graph" and "-- Compensation Committee's Report on Executive Compensation."

Incorporated by reference from the Proxy Statement under the caption "Security Ownership of Certain Beneficial Owners and Management."

Incorporated by reference from the Proxy Statement under the caption "Certain Relationships and Related Transactions."

The following reports on Form 8-K were filed during the quarter ended December 31, 2001: