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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2002

OR

For the transition period from ____________ to ____________

Commission file number: 333-76331

          Indicate by check mark whether the registrant  (1)  has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

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

          Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

          The aggregate market value of voting common stock held by non-affiliates of the registrant as of June 28, 2002, based upon the last sale price of such common stock on that date as reported by the Nasdaq National Market was $21,038,003.

          The number of shares of the outstanding registrant’s Common Stock as of March 20, 2003, was 25,352,433.

          Information required by Part III of this Form 10-K, to the extent not set forth herein, is incorporated by reference from the registrant’s definitive proxy statement for its 2003 annual meeting of stockholders, which will be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934 within 120 days after the end of the fiscal year to which this Form 10-K relates.

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Jupitermedia Corporation

Annual Report on Form 10-K

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          “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this Form 10-K which are not historical facts are “forward-looking statements” that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements involve risks and uncertainties, that could cause actual results to differ materially from those described in the forward-looking statements.  The potential risks and uncertainties address a variety of subjects including, for example: the competitive environment in which Jupitermedia competes; the unpredictability of Jupitermedia’s future revenues, expenses, cash flows and stock price; Jupitermedia’s ability to integrate acquired businesses, products and personnel into its existing businesses; Jupitermedia’s international and venture capital investments; any material change in Jupitermedia’s intellectual property rights; and continued growth and acceptance of information technology and the Internet.  For a more detailed discussion of such risks and uncertainties, refer to Jupitermedia’s reports filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934.  The forward-looking statements included herein are made as of the date of this Form 10-K, and Jupitermedia assumes no obligation to update the forward-looking statements after the date hereof.

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PART I

ITEM 1. BUSINESS

Overview

          Jupitermedia is a provider of global real-time news, information, research and media resources for information technology (“IT”) and Internet industry professionals. We provide our community of users with the following resources:

Strategy

          Our objective is to maintain and strengthen our position as a provider of business information and events focused on IT and the Internet industry.  We intend to achieve this objective by continuing to execute the following strategies:

          Increase Our Proprietary Offerings and Services.  We will strengthen our existing offerings and services by continuing to improve our proprietary content, research and events available for our community of users.  We will continue to identify emerging topics of interest and then create content, research and events for those topics through internal development and strategic acquisitions.

          Expand Revenue Opportunities.  For the year ended December 31, 2002, a majority of our revenues were derived from advertising.  We are continuing to develop additional revenue sources through the launch of new research coverage topics and events.

          Grow Through Targeted Acquisitions.  From July 1995 through February 28, 2003, we made 75 acquisitions.  We expect to continue to pursue strategic acquisitions to strengthen our offerings and services.  We may also acquire IT and Internet related media properties to obtain valuable brands, expertise or access to new users, advertisers and vendors.  We intend to use the experience gained from our numerous acquisitions in order to identify, evaluate, acquire and integrate other media properties, which are complementary to our business.

Segments

          Jupitermedia operates in three business segments (for additional information – see also Note 7 of the Notes to Consolidated Financial Statements contained in Item 8 hereof):

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          Online media

          Our online media business includes our internet.com and EarthWeb.com network of over 150 Web sites and 200 e-mail newsletters that generate over 200 million page views monthly (as of February 28, 2003).  Our network is organized into the following 16 vertical content categories, or channels that serve our users:

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          We generate our online media business revenues from :

          Advertising.  We sell advertising on our Web sites, e-mail newsletters, online discussion forums and moderated e-mail discussion lists.  Company obligations typically include guarantees of a minimum number of advertising impressions, or times that an advertisement is viewed by users of our Web sites and related media properties.

          E-commerce Agreements and Offerings.  We have entered into a number of e-commerce agreements, which generally include either a fixed fee for advertising, a bounty for new customer accounts or revenue sharing of 10% to 50% of the sales made by the e-commerce vendor as a result of links from our network, or in some cases combinations of advertising, bounties and revenue sharing. E-commerce agreements typically are a minimum of three months in duration.

          Permission Based Opt-in E-Mail List Rentals.  We currently offer for rental our permission based opt-in e-mail list names relating to over 270 IT and Internet-specific topics.  Members of our community of users volunteer, or “opt-in,” to be included on these lists to receive e-mail product offerings and information relevant to their interests.  Subscribers to these permission based opt-in e-mail lists receive e-mail announcements of special offers relating to each topic subscribed.   

          Paid Subscription Services.  Paid subscription services relate to customer subscriptions to our paid e-mail newsletters and services, SearchEngineWatch.com, TheCounter.com, WinDrivers.com, WallStreetResearchNet.com and AlertIPO.com, which are sold through our network and through affiliate relationships.

          Licensing Agreements.  We license our editorial content and brands to third parties for fixed fees and royalties based on the licensee’s revenues generated by the licensed content.  We license selected portions of our editorial content to print publishers.  We license one-time rights to reprint individual articles, online or in print, to third parties through licensing of reprints and copyright permission requests.  We also provide access to limited versions of our editorial content to others at no charge, to promote our brands and generate traffic.

          Online Press Release Distribution Services.  Through InternetNewsBureau.com, we provide paid e-mail based press release distribution services.  These press releases are e-mailed to over 5,900 registered journalists. 

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          Webinars.  Jupiter Webinars are objective, educational online forums that provide focused research findings and analysis from Jupiter Research, as well as other highly respected analysts, journalists and industry experts.  These live multimedia presentations provide actionable, unbiased information, as well as the opportunity to interact with the analysts through live question and answer segments.  Jupiter Webinars are free to qualified professionals.

          Research

          Our Jupiter Research division provides market insight, data and objective analysis for both end-user and vendor companies.  Jupiter Research covers a variety of sectors and industries to provide clients with information to understand changes in the market.  Jupiter Research provides objective insight and analysis, backed by proprietary data in the form of forecasts, consumer surveys and executive surveys.  Jupiter Research analysts bring to clients domain expertise, a crucial element to put into context both specific data and changing events.

          Jupiter Research consists of three main product lines:  Syndicated Research, Custom Research and Consulting and a la carte solutions.

          Syndicated Research.  Syndicated research delivers data and analysis via written research reports and also analyst inquiry.  Reports include forecasts and survey data to understand consumers’ behaviors and preferences, as well as how executives are investing in particular technologies and platforms.  Analyst inquiry allows companies to dig deeper into a given subject one-on-one, to test ideas and to add objective insight for specific industries and online circumstances.  Syndicated research is typically sold on a subscription basis.

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          Custom Research and Consulting.  Our Custom Research and Consulting product meets project-specific research needs.  Strategic consulting projects utilize a variety of research methodologies to provide proprietary recommendations; allow clients to test specific hypotheses regarding how new technologies, competitive forces and alternative go-to-market strategies affect their market position; and expand on Jupiter Research’s knowledge and data, often focusing on markets or issues not directly covered in existing products.  Types of custom research projects include market opportunity assessments, leading practice analyses, business evaluations, new business model assessments, multi-client studies and site benchmarking.

          A la Carte Solutions.  Jupiter Research analysts provide additional services to clients via our Web Site Review product and our speaker program.

          Our Jupiter Research division also includes Jupiter Direct.  Jupiter Direct is an online outlet where customers can purchase copies of research reports and briefings. 

          Events

          Our Jupiter Events division includes nearly 40 offline conferences and trade shows focused on IT and business-specific topics that are of interest to our community of users.  Events scheduled include:

          Most events include an extensive conference program, which provides a forum for the exchange and dissemination of information relevant to the particular event’s focus. In addition, most events have “keynote” sessions with speakers who are known for their industry knowledge and expertise.

          We are able to efficiently promote these conferences and trade shows through our online network.  We generate revenues from attendee registrations, exhibition space from exhibitors who pay a fixed price per square foot of booth space and advertiser and vendor sponsorships.

Venture Fund Investments

          We are the portfolio manager of internet.com Venture Fund I LLC, a $5.0 million venture fund formed in March 1999, internet.com Venture Fund II LLC, a $15.0 million venture fund formed in

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September 1999, and internet.com Venture Partners III LLC, a $75.0 million venture fund formed in January 2000, all of which invest in early-stage content-based Internet properties that are not competitive with Jupitermedia.  We earn management fees for the day-to-day operation and general management of the funds.  We are also entitled to 20% of the realized gains on investments made by these funds.  In February 2003, the operating agreement of internet.com Venture Fund II LLC was amended to provide for the dissolution of the fund and distribution of the fund assets by December 31, 2003.  In October 2002, the operating agreement of internet.com Venture Partners III was amended to reduce the fund’s committed capital from $75.0 million to $22.5 million and to provide for the dissolution of the fund and the distribution of the fund assets by December 31, 2003.  We no longer have any outstanding capital commitments related to these three venture funds.  We invested $700,000 in the initial fund, $1.8 million in the second fund and $3.1 million in the third fund, each of which is now fully invested.  The remaining $4.3 million of capital raised and funded in the initial fund, $13.2 million raised and funded in the second fund and $19.4 million raised and funded in the third fund were sourced by third party investors.

Corporate Information

          Prior to the acquisition of Mecklermedia Corporation by Penton Media, Inc. (“Penton Media”) in November 1998, we operated since December 1994 as one of three divisions that comprised Mecklermedia.  Our predecessor Web sites, mecklerweb.com and iworld.com, were also dedicated to covering IT and the Internet industry.  In connection with this acquisition, Penton Media determined that Mecklermedia’s Internet business was not consistent with its planned strategic direction.  To address this issue, Alan M. Meckler, Mecklermedia’s Chairman and Chief Executive Officer, purchased an 80.1% interest in internet.com LLC, a business formed by Penton Media to hold the Internet business acquired from Mecklermedia.  As of February 28, 2003, Mr. Meckler beneficially owned approximately 54.5% of our outstanding common stock.

          internet.com LLC was incorporated on April 5, 1999 in the State of Delaware. internet.com LLC was merged with and into internet.com Corporation upon consummation of our initial public offering in June 1999.  On May 24, 2001, internet.com Corporation changed its name from internet.com Corporation to INT Media Group, Incorporated.  On August 12, 2002, INT Media Group, Incorporated received unanimous approval from the Board of Directors to change its name to Jupitermedia Corporation.

          Our principal executive offices are located at 23 Old Kings Highway South, Darien, Connecticut 06820 and our telephone number is (203) 662-2800.

Marketing

          Online media

          We employ a combination of online and offline advertising and promotional campaigns to promote our content offerings and services to our community of users, advertisers and vendors.  User advertising includes cross-promotion on our network, advertising in trade publications and at trade shows and promotional links from Web sites that attract demographically similar audiences.  We have participated in various IT and Internet industry events and we have also used print advertising in various IT and Internet trade publications.

          Our marketing efforts are directed largely at acquiring advertising clients and commerce agreements.  We principally use offline and online advertising, direct mail and event sponsorships for customer acquisition. Advertising Age, AdWeek, B2B Magazine, Technology Marketing, Online Advertising Discussion List and SRDS are among the venues used to deliver our promotional messages.

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          We barter a portion of the unsold advertising impressions generated by our network for advertising and promotion in media properties owned by other third parties.  In addition, we have bartered portions of unsold advertising impressions for equity interests in certain of our venture funds’ portfolio companies.  We recognize revenue and expense from barter transactions at their estimated fair values in accordance with the guidelines set under Emerging Issues Task Force No. 99-17 “Accounting for Advertising Barter Transactions.”  Revenues related to barter transactions were $4.1 million, $5.4 million and $4.3 million and expenses were $2.1 million, $2.9 million and $3.1 million for the years ended December 31, 2000, 2001 and 2002, respectively.

          Research

          We support our Jupiter Research sales efforts through various types of marketing and brand building activities as well as leveraging the users of our online network. We use public relations, user group seminars, trade shows and speaking engagements to generate publicity for our products and services.  We extensively cross-promote our research through targeted electronic campaigns that include Web banners, e-mail newsletter ads, dedicated e-mail messages to select e-mail newsletter subscriber databases and opt-in e-mail messages. 

          Events

          Our Jupiter Events marketing initiatives are focused mainly on leveraging the users of our online network.  We extensively cross-promote our events through targeted electronic campaigns that include Web banners, e-mail newsletter ads, dedicated e-mail messages to select e-mail newsletter subscriber databases and opt-in e-mail messages.  To supplement our internal marketing efforts, we also execute highly targeted traditional direct mail campaigns by mailing postcards to select lists in targeted geographic areas.  The postcards serve as an event overview and an invitation to visit our Web sites to obtain further information.  Mailing lists and print advertisements are bartered with media companies in exchange for a presence at our conferences and trade shows. 

Sales

          We sell our products through a direct sales force. Our U.S. sales force operates from our New York, San Francisco and Darien offices, and we also maintain local representatives in various locations throughout the United States. We also have sales employees and sales representatives in Canada, Australia and a number of European countries. Employees receive a base salary and are eligible for commissions based on sales and revenue goals.  Sales representatives receive commissions based on a percentage of sales.

Geographic Financial Information

          A significant majority of our revenues are derived from our U.S. operations.

Recent Developments

          In August 2002, we completed the acquisition of the assets of the Jupiter Research and Events business from Jupiter Media Metrix, Inc. (Nasdaq: JMXI) for $250,000 and the assumption of certain liabilities.  In September 2002, our name was changed to Jupitermedia Corporation (Nasdaq: JUPM) from INT Media Group, Inc. (Nasdaq: INTM).

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Intellectual Property

          We seek protection of our proprietary content, logos, brands, domain names and software relating to our Web sites, e-mail newsletters, online discussion forums and moderated e-mail discussion lists and attempt to protect them by relying on trademark, copyright, trade secret and other laws and restrictions.  We currently have no patents or patents pending and do not anticipate that patents will become a significant part of our intellectual property in the foreseeable future.  We pursue the registration of our trademarks and service marks in the United States and internationally, and have applied for registration in the United States and numerous other countries for a number of our trademarks and service marks.  We also pursue copyright registration of our content in the United States.  We might not be able to obtain effective trademark, copyright, domain name and trade secret protection in every country in which we distribute our services or make them available through the Internet, and it is difficult for us to police unauthorized use of our proprietary rights and information. 

          We have applied for registration of our trademarks and service marks in the United States and in over 75 other countries.  We have encountered obstacles to registration of some marks in several of these countries.

          Legal standards relating to the validity, enforceability and scope of protection of proprietary rights in Internet-related businesses are uncertain and still evolving.  As a result, we cannot assure the future viability or value of our proprietary rights.  We might not have taken adequate steps to prevent the misappropriation or infringement of our intellectual property.  Any such infringement or misappropriation, should it occur, might harm our business, results of operations and financial condition.  In addition, we may have to file lawsuits in the future to perfect or enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others.  These lawsuits could result in substantial costs and divert our resources and the attention of our management.  As a result, our business, results of operations and financial condition would suffer.

          Our business activities may infringe upon the proprietary rights of others, and other parties might assert infringement claims against us.  From time to time, we have been, and expect to continue to be, subject to claims in the ordinary course of our business including claims of alleged infringement of the trademarks, service marks and other intellectual property rights of third parties.  If similar claims are made against us in the future, those claims and any resultant litigation might subject us to liability for damages, result in invalidation of our proprietary rights and, even if not meritorious, could be time consuming and expensive to defend and could result in the diversion of our resources and the attention of our management.  As a result, our business, results of operations and financial condition would suffer.

          We generally obtain our content and some of our technology from our employees or pursuant to work-for-hire arrangements.  We also license technology and content from third parties.  In such license arrangements, we generally obtain representations as to origin and ownership of such content and technology and the licensors have generally agreed to defend, indemnify and hold us harmless from any third party claims that such technology or content violates the rights of another.  We cannot be sure that these third party technology and content protections will be effective or sufficient or that we will be able to maintain such content or technology on commercially reasonable terms.  As a result, our business, results of operations and financial condition would suffer.

          We have licensed in the past, and expect to license in the future, proprietary rights, such as trademarks or copyrighted material, to third parties.  While we attempt to ensure that the quality of our brands and content are maintained by such licensees, we cannot be sure that such licensees will not take actions that

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might decrease the value of our brands, proprietary rights or reputation, which would harm our business, prospects, financial condition and results of operations.

Domain Names

          We own the Internet domain name “internet.com,” as well as numerous other domain names both in the United States and internationally.  Domain names generally are regulated by Internet regulatory bodies.  The regulation of domain names in the United States and in foreign countries is subject to change.  Regulatory bodies could establish additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names.  As a result, we might not acquire or maintain the “internet.com” or comparable domain name in all the countries in which we conduct business.

          The relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is unclear and still evolving.  Therefore, we might be unable to prevent third parties from acquiring domain names that infringe or otherwise decrease the value of our trademarks and other proprietary rights.

Seasonality and Cyclicality

          Advertisers generally place fewer advertisements during the first and third calendar quarters of each year, which directly affects our online media business.  Further, Internet user traffic typically drops during the summer months, which reduces the amount of advertising to sell and deliver. 

          Our results will be impacted by the number and size of events we hold in each quarter.  In addition, there may be fluctuations as events held in one period in the current year may be held in a different period in future years.

          Expenditures by our customers tend to vary in cycles that reflect overall economic conditions as well as budgeting and buying patterns.

Customers

          Our customer base is a diverse group of companies, many of which are focused on IT and the Internet.

Backlog

          The following is a summary of our backlog for each of our segments as of December 31, 2001 and 2002 (in thousands):

          Our online media backlog consists of commitments for advertising, list rental, e-commerce and licensing arrangements on our network and subscriptions to our paid subscription services.  Research

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backlog consists of subscriptions to our research products.  Events backlog consists of prepayments of attendee registration fees and contracts for exhibition space and sponsorships.

          Most of our backlog at December 31, 2002 will be recognized as revenue in 2003.

Competition

          Online media

          The market for Internet-based services is relatively new, intensely competitive and rapidly changing.  Since the advent of commercial services on the Internet, the number of online services competing for users’ attention and spending has proliferated.  We expect that competition will continue to intensify.  We compete with other companies, which direct a portion of their overall Web content at the IT and Internet professional community, such as CNET, Inc., CMP Media Inc., IDG, VNU and Ziff Davis.  We also compete for circulation and advertising impressions with general interest portal and destination Web sites as well as traditional media.

          Research

          In the market for research products and services, our principal competitors are Gartner Inc., META Group Inc. and Forrester Research, Inc.  Numerous other companies, however, compete with us both domestically and internationally in providing research and analysis related to a specific industry or geographic area.  In addition, we face increased direct and indirect competition from IT research firms, business consulting firms, electronic and print publishing companies and equity analysts employed by financial services companies. 

          Events

          Our events compete for exhibitors and attendees with other technology related trade shows, including personal computer and computer network related shows, such as IDG and Key3Media, Inc. Some of our competitors are affiliated with major publishers of technology related books and magazines.

          Many of our current and potential competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing and other resources than we have.  These competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements and to devote greater resources to the development, promotion and sale of their products and services than we can. 

          Employees

          The following is a summary of our employees by segment as of February 28, 2003:

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ITEM 2. PROPERTIES

          We lease approximately 20,000 square feet of office space in a facility in Darien, Connecticut that houses our principal administrative, marketing and IT operations. Our events sales and operations, and online media editorial teams also work out of this facility.  We lease approximately 5,000 square feet in an additional facility in Darien, Connecticut that is currently being sublet to an unaffiliated third party.

          We lease approximately 16,000 square feet of office space in a facility in New York, New York, that is used by editorial personnel in our online media division, research analysts in our Jupiter Research division and sales personnel for both our online media and Jupiter Research divisions.  Under a lease that expires in September 2004, we lease approximately 11,000 square feet in an additional facility in New York, New York that is currently vacant. Due to the decline in the commercial real estate market in this area, this space may not be sublet for several quarters. Once this space is sublet, we expect that it will be at rates that are below currently contracted amounts.

          We lease approximately 6,000 square feet of office space in San Francisco, California that is used primarily by our online media and research sales personnel.  We also have domestic operating leases in Boston and Westboro, Massachusetts; and Clinton Township, Michigan.  In addition, we have international operating leases in Australia, Sweden, France, the United Kingdom and Germany.

          We believe that the general condition of our leased real estate is good and that our facilities are suitable for the purposes for which they are being used.  We believe that our current facilities will be adequate to meet our needs for the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS

          Messrs. Alan M. Meckler and Christopher S. Cardell, who are stockholders, executive officers and directors of Jupitermedia, were stockholders, executive officers and directors of Mecklermedia Corporation prior to its acquisition by Penton Media in November 1998.  In addition, Messrs. Gilbert F. Bach and Michael J. Davies, who are directors of Jupitermedia, were directors of Mecklermedia Corporation prior to its acquisition by Penton Media.  A complaint seeking class action status was filed in Delaware Chancery Court on June 16, 1999 by a former stockholder of Mecklermedia Corporation alleging that Messrs. Meckler, Cardell, Bach and Davies, as well as the other directors of Mecklermedia Corporation, breached their fiduciary duties of care, candor and loyalty in connection with the approval of the sale of Mecklermedia Corporation to Penton Media at the price paid by Penton Media and the related sale of 80.1% of the Internet business of Mecklermedia Corporation to Mr. Meckler at the price paid by Mr. Meckler.  Among other things, this plaintiff has alleged that the price paid by Penton Media for the purchase of Mecklermedia Corporation, and the price paid by Mr. Meckler for an 80.1% stake in the Internet business of Mecklermedia Corporation, were inadequate.  This former stockholder of Mecklermedia Corporation has asserted claims for unspecified damages.  The plaintiff also named Jupitermedia Corporation as a defendant seeking that a constructive trust be established consisting of any benefits derived by the defendants in respect of the allegations set forth in the complaint. 

          On or about November 7, 2000, defendants were served with an amended complaint, which named three additional plaintiffs. 

          On or about October 9, 2001, with leave of the Delaware Chancery court, plaintiffs filed a Second Amended Class Action Complaint (“SAC”).  The SAC adds allegations concerning defendants’ alleged failure to disclose certain facts concerning Mr. Meckler’s role in the transactions, his role in negotiations with a third party, and the valuation of the assets at issue.  Defendants filed a motion to dismiss the SAC on

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April 1, 2002.  On November 6, 2002, the Court issued an opinion denying the defendants’ motion to dismiss the SAC.  On December 13, 2002, all of the defendants, including Jupitermedia, served an answer to the SAC generally denying the allegations therein, denying that the directors of Mecklermedia breached any fiduciary duties, and asserting certain affirmative defenses.  All of the defendants intend to continue to vigorously defend themselves.

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

None

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PART II

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

          The common stock of Jupitermedia began trading publicly on the Nasdaq Stock Market on June 25, 1999, under the symbol “INTM”.  Prior to that date, there was no public market for our common stock.  In September 2002, effective with the change in the name of the company to Jupitermedia Corporation, our ticker symbol was changed to “JUPM”.  The following table sets forth for the periods indicated the high and low sale prices of our common stock.

          As of February 28, 2003, there were 72 holders of record of our common stock, although we believe that the number of beneficial owners of our common stock is substantially higher.

DIVIDEND POLICY

          We have never declared or paid a cash dividend and do not anticipate doing so in the foreseeable future.  We expect to retain earnings to finance the expansion and development of our business.

EQUITY COMPENSATION PLAN INFORMATION

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ITEM 6. SELECTED FINANCIAL DATA

          The following selected financial data should be read in conjunction with the financial statements of Jupitermedia, the accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  The selected financial data of the iWorld division of Mecklermedia for the year ended September 1998, and for the period from October 1, 1998 through November 23, 1998, are derived from financial statements of the iWorld division of Mecklermedia. 

          The financial information of the iWorld division of Mecklermedia included herein is not necessarily indicative of the results of operations, financial position and cash flows of Jupitermedia had it been a stand-alone entity at such times.  It is also not necessarily indicative of the results of operations, financial position and cash flows of Jupitermedia in the future.  The share information reflects the conversion of Jupitermedia from a limited liability company into a corporation as if such conversion had occurred at the beginning of each period indicated.

(1)     Represents the financial data of the iWorld division of Mecklermedia Corporation.

(2)     Represents the financial data of Jupitermedia.

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

Overview

          Jupitermedia is a provider of global real-time news, information, research and media resources for IT and Internet industry professionals. We provide our community of users, with the following resources:

Results of Operations

          The following table sets forth certain statement of operations data as a percentage of revenues for the periods indicated:

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Years ended December 31, 2001 and 2002

          Revenues.  Revenues were $44.0 million for the year ended December 31, 2001 and $40.7 million for the year ended December 31, 2002, representing a decrease of 7%.  This change was primarily due to a reduction in advertising revenues due to the general downturn in the U.S. economy, particularly related to technology advertising, as well as a reduction in barter revenue of $1.1 million. This decrease was partially offset by an increase in research revenues of $5.1 million resulting from the acquisition of Jupiter Research. 

          Cost of revenues.  Cost of revenues primarily consists of expenses associated with editorial, research, communications infrastructure, Web site hosting and conferences and trade shows. Cost of revenues was $22.1 million for the year ended December 31, 2001 and $16.8 million for the year ended December 31, 2002, representing a decrease of 24%.  This change was primarily due to a reduction of $2.0 million in salaries and benefits of technology and operations personnel due to a reduction in the total number of employees and fewer terminations resulting in lower severance costs, partially offset by an increase for the addition of Jupiter Research personnel, a reduction in various office related costs of $1.1 million, a reduction in freelance and professional consulting costs of $934,000 and a reduction in Web site hosting costs of $466,000.  As a percentage of revenues, cost of revenues was 50% for the year ended December 31, 2001 and 41% for the year ended December 31, 2002.

          Advertising, promotion and selling.  Advertising, promotion and selling expenses primarily consist of costs related to sales and marketing staff, sales commissions and promotion costs. Advertising, promotion and selling expenses were $18.5 million for the year ended December 31, 2001 and $14.1 million for the year ended December 31, 2002, representing a decrease of 24%.  This change was primarily due to a reduction in salaries, benefits and commissions paid to advertising sales personnel of $3.1 million due to a reduction in the number of employees and fewer terminations resulting in lower severance costs, a reduction of $555,000 for various office related costs and a decrease of $389,000 for marketing expenditures. As a percentage of revenues, advertising, promotion and selling expenses were 42% for the year ended December 31, 2001 and 35% for the year ended December 31, 2002.

          General and administrative.  General and administrative expenses primarily consist of salaries, professional fees, facilities costs and provisions for losses on accounts receivable. General and administrative expenses were $12.0 million for the year ended December 31, 2001 and $6.8 million for the year ended December 31, 2002, representing a 43% decrease. This change was primarily due to a reduction in the provision for losses on accounts receivable of $4.3 million due to reduced sales and improved collection results, and a reduction in salaries and benefits paid to administrative personnel of $1.5 million due to a reduction in the number of employees and fewer terminations resulting in lower severance costs. As a percentage of revenues, general and administrative expenses were 27% for the year ended December 31, 2001 and 17% for the year ended December 31, 2002.

          Depreciation.  Depreciation of property and equipment was $2.7 million for the year ended December 31, 2001 and $2.2 million for the year ended December 31, 2002, representing an 18% decrease.  This decline was a result of decreased capital expenditures.  As a percentage of revenues, depreciation of property and equipment was 6% for the year ended December 31, 2001 and 5% for the year ended December 31, 2002. 

          Amortization.  Amortization of intangibles was $33.8 million for the year ended December 31, 2001 and $807,000 for the year ended December 31, 2002, representing a 98% decrease. On January 1, 2002, Jupitermedia ceased amortizing the remaining goodwill on acquired media properties in accordance with Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets”.

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As a percentage of revenues, amortization of intangibles was 77% for the year ended December 31, 2001 and 2% for the year ended December 31, 2002.

          Impairment of intangibles.  Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  An impairment loss is recognized when the sum of undiscounted expected future cash flows is less than the carrying amount of such assets.  The measurement for such impairment loss is based on estimated fair values.  Fair values have been determined based upon estimated future cash flows.  During 2001, Jupitermedia determined that certain intangible assets associated with various acquired Web sites and related Internet media properties were impaired.  As a result of this determination, Jupitermedia recorded a non-cash charge of $54.2 million for the year ended December 31, 2001 related to the impairment of acquired goodwill and trademarks.

          Loss on investments and other, net.  Jupitermedia determined that the declines in value from Jupitermedia’s accounting basis for certain of its investments in internet.com venture fund portfolio companies was other than temporary.  During the years ended December 31, 2001 and 2002, Jupitermedia recognized losses of $1.9 million and $205,000, respectively, related to investment impairment, net of a gain on the sales of assets of $0 and $241,000, respectively. 

          Interest income.  Interest income was $1.4 million for the year ended December 31, 2001 and $383,000 for the year ended December 31, 2002.  This change was due to a decline in interest rates.

          Provision for income taxes.  Jupitermedia recorded a provision for income taxes of $2,000 for the year ended December 31, 2001 related to foreign income tax liabilities that were recorded based upon estimated foreign tax rates.

          Minority interests.  Minority interests represent the minority stockholders’ proportionate share of profits or losses of Jupitermedia’s majority-owned consolidated international subsidiaries. 

          Equity loss from international and venture fund investments, net.  Equity loss represents Jupitermedia’s net equity interests in the investments in internet.com venture funds and international joint ventures.  Equity loss was $2.4 million for the year ended December 31, 2001 and $644,000 for the year ended December 31, 2002, representing a 73.6% decrease.  This change was primarily due to a reduction in the writedowns of portfolio investments by the internet.com venture funds.

Years Ended December 31, 2000 and 2001

          Revenues.  Revenues were $52.1 million for the year ended December 31, 2000 and $44.0 million for the year ended December 31, 2001, representing a decrease of 16%.  This change was primarily due to a reduction in advertising revenues due to the general downturn in the economy, particularly related to technology advertising.

          Cost of revenues.  Cost of revenues was $23.0 million for the year ended December 31, 2000 and $22.1 million for the year ended December 31, 2001, representing a decrease of 4%.  This change was primarily due to a reduction of editorial, technology and operations personnel and a decrease in expenses for freelance contributors, partially offset by severance costs.  As a percentage of revenues, cost of revenues was 44% for the year ended December 31, 2000 and 50% for the year ended December 31, 2001. 

          Advertising, promotion and selling.  Advertising, promotion and selling expenses were $18.3 million for the year ended December 31, 2000 and $18.5 million for the year ended December 31, 2001,

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representing an increase of 1%.  This change was primarily due to increased conference marketing expenses and severance costs offset by a reduction of advertising sales personnel.  As a percentage of revenues, advertising, promotion and selling expenses were 35% for the year ended December 31, 2000 and 42% for the year ended December 31, 2001. 

          General and administrative.  General and administrative expenses were $10.2 million for the year ended December 31, 2000 and $12.0 million for the year ended December 31, 2001, representing an 18% increase.  This change was primarily due to an increase in the provision for losses on accounts receivable of $1.4 million, which was a result of an increase in uncollectible customer accounts.  As a percentage of revenues, general and administrative expenses were 20% for the year ended December 31, 2000 and 27% for the year ended December 31, 2001. 

          Depreciation.  Depreciation of property and equipment was $2.1 million for the year ended December 31, 2000 and $2.7 million for the year ended December 31, 2001, representing a 30% increase.  This change was a result of an increase in capital expenditures.  As a percentage of revenues, depreciation of property and equipment was 4% for the year ended December 31, 2000 and 6% for the year ended December 31, 2001. 

          Amortization.  Amortization of intangibles was $24.9 million for the year ended December 31, 2000 and $33.8 million for the year ended December 31, 2001, representing a 36% increase.  This increase was primarily due to the amortization of acquired media properties.  As a percentage of revenues, amortization of intangibles was 48% for the year ended December 31, 2000 and 77% for the year ended December 31, 2001. 

          Impairment of intangibles.  Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  An impairment loss is recognized when the sum of undiscounted expected future cash flows is less than the carrying amount of such assets.  The measurement for such impairment loss is based on estimated fair values.  Fair values have been determined based upon estimated future cash flows.  During 2001, Jupitermedia determined that certain intangible assets associated with various acquired Web sites and related Internet media properties were impaired.  As a result of this determination, Jupitermedia recorded a non-cash charge of $54.2 million for the year ended December 31, 2001 related to the impairment of acquired goodwill and trademarks.

          Loss on investments and other, net.  During the year ended December 31, 2000 and 2001, Jupitermedia determined that the declines in value from Jupitermedia’s accounting basis for certain of our investments in internet.com venture fund portfolio companies was other than temporary.  Jupitermedia recognized losses totaling $216,000 related to investment impairment, net of a gain on the distribution of GOTO.com common stock received from internet.com Venture Fund I LLC for the year ended December 31, 2000 and recognized losses of $1.9 million related to investment impairments for the year ended December 31, 2001.

          Interest income.  Interest income was $4.8 million for the year ended December 31, 2000 and $1.4 million for the year ended December 31, 2001.  This change was due to lower levels of cash in 2001.

          Provision for income taxes.  Jupitermedia recorded a provision for income taxes of $205,000 and $2,000 for the years ended December 31, 2000 and 2001, respectively, related to foreign income taxes.  This change was due to a decrease in income in certain foreign locations.

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          Minority interests.  Minority interests represent the minority stockholders’ proportionate share of losses of Jupitermedia’s majority-owned consolidated international subsidiaries.

          Equity loss from international and venture fund investments, net.  Equity loss represents Jupitermedia’s net equity interests in the investments in international joint ventures and the internet.com venture funds.  Equity loss was $1.5 million for the year ended December 31, 2000 and $2.4 million for the year ended December 31, 2001, representing a 64.3% increase.  This was primarily due to an increase in the writedowns of portfolio investments by the internet.com venture funds.

Liquidity and Capital Resources

          Since inception, we have funded operations primarily with cash proceeds from our initial and follow-on public offerings of our common stock. On June 25, 1999, we completed our initial public offering of 3,400,000 shares of our common stock at $14.00 per share.  Net proceeds to Jupitermedia aggregated $43.0 million.  On February 1, 2000, we completed our follow-on public offering of 3,750,000 shares of common stock priced at $60.00 per share, of which 1,750,000 shares were sold by Jupitermedia and 2,000,000 shares were sold by Penton Media, Inc.  Net proceeds received by Jupitermedia from the follow-on offering were $98.3 million.  Jupitermedia did not receive any of the proceeds from the sale of shares by Penton Media, Inc.

          As of December 31, 2002, Jupitermedia had total current assets of $35.8 million and total current liabilities of $14.5 million, or working capital of $21.3 million.

          Net cash used in operating activities was $1.4 million for the year ended December 31, 2000 and $5.4 million for the year ended December 31, 2001.  Net cash provided by operating activities was $2.1 million for the year ended December 31, 2002.  Net cash used in operating activities for the year ended December 31, 2000 was a result of our net losses adjusted for depreciation and amortization, non-cash barter transactions, provision for losses on accounts receivable, and increases in accounts payable and accrued expenses offset by increases in accounts receivable, resulting from an increase in sales, and prepaids and other.  Net cash used in operating activities for the year ended December 31, 2001 was primarily a result of our net losses adjusted for depreciation and amortization, impairment of intangibles, non-cash barter transactions, provision for losses on accounts receivable and decreases in accounts payable and accrued expenses, offset by decreases in accounts receivable and prepaids and other.  Net cash provided by operating activities for the year ended December 31, 2002 was primarily a result of our net losses adjusted for depreciation and amortization and non-cash barter transactions as well as an increase in accounts payable and accrued expenses offset by decreases in deferred revenues and increases in unbilled accounts receivable.

          Net cash used in investing activities was $55.3 million for the year ended December 31, 2000, $29.5 million for the year ended December 31, 2001 and $1.6 million for the year ended December 31, 2002.  Net cash used in investing activities was primarily a result of acquisitions of businesses and capital expenditures.  Capital expenditures were $3.7 million for the year ended December 31, 2000, $1.9 million for the year ended December 31, 2001 and $166,000 for the year ended December 31, 2002.

          Net cash provided by financing activities was $98.7 million for the year ended December 31, 2000 and $55,000 for the year ended December 31, 2001 and was related primarily to proceeds from our public offering and the exercise of stock options, respectively.  Net cash used in financing activities was $98,000 for the year ended December 31, 2002 and was related to the purchase of treasury stock offset by proceeds received from the exercise of stock options. 

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          In October 2001, Jupitermedia announced that its Board of Directors had authorized the expenditure of up to $1.0 million to repurchase the Company’s outstanding common stock.  Any purchases under Jupitermedia’s stock repurchase program may be made, from time-to-time, in the open market, through block trades or otherwise, at the discretion of Company management.  Depending on market conditions and other factors, these purchases may be commenced or suspended at any time or from time-to-time without prior notice.  In September 2002, Jupitermedia announced that it purchased 65,000 shares of Jupitermedia common stock at $1.60 per share as part of its stock repurchase program.

          Jupitermedia believes the combination of cash on hand and operating cash flow will provide sufficient liquidity for the next twelve months. However, if there were to be a further downturn in the general economy, particularly related to technology advertising, there would be a corresponding negative impact on Jupitermedia’s liquidity. In addition, any future acquisitions that require cash may affect our liquidity.

Contractual Obligations

          The following table represents our expected cash requirements for contractual obligations outstanding as of December 31, 2002 (in thousands):

          Jupitermedia has employee agreements with both its President and Chief Operating Officer and its Chief Financial Officer that provide twelve months and six months of severance, respectively, to be paid upon termination.

Related Party Transactions

          Jupitermedia, Internet World Media, Inc. and Penton Media, Inc. entered into a services agreement in November 1998, whereby Jupitermedia agreed to provide certain services to Internet World Media, Inc. and Penton Media, Inc. in return for services to be provided to Jupitermedia by Internet World Media, Inc. and Penton Media, Inc.  This services agreement expires November 23, 2003.

          I-Venture Management LLC, a wholly owned subsidiary of Jupitermedia, serves as the managing member of internet.com Venture Fund I LLC, internet.com Venture Fund II LLC and internet.com Venture Partners III LLC.  Certain directors and officers of Jupitermedia serve as directors and officers of I-Venture Management LLC.

          A non-interest bearing loan of $178,000 was made to Jupitermedia’s Chairman and Chief Executive Officer in 1997 that is still outstanding and is included in Investments and other assets as of December 31, 2002.

Recent Accounting Pronouncements

          In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, “Business Combinations”, and SFAS No. 142, “Goodwill and Other Intangible Assets”.  SFAS No. 141 requires that the purchase method of accounting be used for all business combinations subsequent to June 30, 2001 and specifies criteria for recognizing intangible assets acquired in a business combination.  SFAS No. 142

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requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually.  Intangible assets with finite useful lives will continue to be amortized over their estimated useful lives.  On January 1, 2002, SFAS No. 142 became effective and as a result, Jupitermedia ceased amortizing the remaining goodwill.  Jupitermedia completed the transitional goodwill impairment test as required by SFAS No. 142 during the first quarter of 2002.  This impairment test is required to be performed at adoption of SFAS No. 142 and at least annually thereafter.  On an ongoing basis (absent any impairment indicators), Jupitermedia expects to perform the impairment test during the fourth quarter, in connection with Jupitermedia’s annual budgeting process.  Based on Jupitermedia’s impairment test during the fourth quarter of 2002, it was determined that none of Jupitermedia’s recorded goodwill was impaired. Impairment adjustments recognized after adoption, if any, are required to be recognized as operating expenses.

          Also in July 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations”.  SFAS No. 143 addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs.  The standard is effective for fiscal years beginning after June 15, 2002.  Jupitermedia’s management does not expect the adoption of SFAS No. 143 to have a material impact on Jupitermedia’s financial results.

          In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”.  This standard addresses financial accounting and reporting for the impairment or disposal of long-lived assets.  The standard is effective for fiscal years beginning after December 15, 2001.  Adoption of SFAS No. 144 did not have a material impact on Jupitermedia’s financial results.

          In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections”. The standard is effective for fiscal years beginning after May 15, 2002.  Jupitermedia’s management does not expect the adoption of SFAS No. 145 to have any impact on Jupitermedia’s financial results.

          In June 2002, the FASB issued SFAS No. 146, “Accounting for Exit or Disposal Activities”. SFAS No. 146 will be effective with respect to disposal activities initiated by us after December 31, 2002. 

          In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation Transition and Disclosure, and Amendment of SFAS No. 123,” to provide alternative methods for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation as required by SFAS No. 123.  SFAS No. 148 also amends the disclosure provisions of SFAS No. 123 and APB No. 28, “Interim Financial Reporting,” to require disclosure in the summary of significant accounting policies of the effects of an entity’s accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements.  While SFAS No. 148 does not amend SFAS No. 123 to require companies to account for employee stock options using the fair value method, the disclosure provisions of SFAS No. 148 are applicable to all companies with stock-based employee compensation, regardless of whether they account for that compensation using the fair value method of SFAS No. 123 or the intrinsic value method of APB No. 25.  Since Jupitermedia accounts for its stock-based compensation under APB No. 25, and has no current plans on switching to SFAS No. 123, the impact of SFAS No. 148 will be limited to the annual and interim reporting of the effects on net (loss) income and (loss) earnings per share as if Jupitermedia accounted for stock-based compensation under SFAS No. 123.  SFAS No. 148 is effective for fiscal years ending after December 15, 2002.  Jupitermedia has adopted the disclosure provisions of SFAS No. 148.

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Critical Accounting Policies

          Our significant accounting policies are described in Note 3 to the consolidated financial statements included in Item 8 of this Form 10-K.  Our critical accounting policies are as follows:

          Revenue recognition.  The following is a summary of revenue recognition policies for each of our reporting segments:

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          Estimating allowances for doubtful accounts. Our management must make estimates of the amount of our accounts receivables that may be not collected. Management specifically analyzes accounts receivable by reviewing historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. Our accounts receivable balance was $7.5 million, net of allowance for doubtful accounts of $1.1 million, as of December 31, 2002.

          Valuation of long-lived assets. We assess the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors we consider important which could trigger an impairment review include the following:

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          When we determine that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more of the above indicators of impairment, we measure any impairment based on estimated fair values.  Fair values have been determined based upon estimated future cash flows. Long-lived assets, including goodwill and intangible assets were $9.8 million as of December 31, 2002.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

          We have no derivative financial instruments or derivative commodity instruments.  We invest our excess cash in debt instruments of the U.S. Government and its agencies.  Interest rates for our investments were approximately 1.20% at December 31, 2002.

          We invest in equity instruments of privately held, online media and technology companies for business and strategic purposes.  These investments are included in Investments and other assets and are accounted for under the cost method, as we do not have the ability to exert significant influence over the investee or their operations.  For these non-quoted investments, our policy is to regularly review the assumptions underlying the operating performance and cash flow forecasts in assessing the carrying values.  We identify and record impairment losses on long-lived assets when events and circumstances indicate that such assets might be impaired. 

          Our transactions are generally conducted, and our accounts are denominated, in United States dollars.  Accordingly, we are not exposed to significant foreign currency risk.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Jupitermedia Corporation
Index to Consolidated Financial Statements

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          Jupitermedia Corporation dismissed Arthur Andersen LLP on May 9, 2002, and subsequently engaged Deloitte & Touche LLP as its independent auditors.  The predecessor auditors’ report appearing below is a copy of Arthur Andersen LLP’s previously issued opinion dated March 14, 2002. In fiscal 2002, Jupitermedia Corporation adopted the provisions of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”).  As discussed in Note 5 to the financial statements, Jupitermedia Corporation  has presented transitional disclosures for 2000 and 2001 required by SFAS No. 142.  The Arthur Andersen LLP report does not extend to these transitional disclosures.  These disclosures are reported on by Deloitte & Touche LLP as stated in their report appearing on the following page. Since Jupitermedia Corporation is unable to obtain a manually signed audit report, a copy of Arthur Andersen LLP’s most recent signed and dated report has been included to satisfy filing requirements, as permitted under Rule 2-02(e) of Regulation S-X.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of Jupitermedia Corporation:

          We have audited the accompanying consolidated balance sheets of Jupitermedia Corporation (a Delaware Corporation) and subsidiaries as of December 31, 2000 and 2001, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years ended December 31, 1999, 2000 and 2001.  These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

          In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Jupitermedia Corporation and subsidiaries as of December 31, 2000 and 2001, and the results of their operations and their cash flows for the years ended December 31, 1999, 2000 and 2001, in conformity with accounting principles generally accepted in the United States.

          As discussed in Note 3 to the consolidated financial statements, in 2000, the Company changed its accounting for Web site development costs and for barter transactions in accordance with Emerging Issues Task Force Issue No. 00-2 and Issue No. 99-17, respectively.

Stamford, Connecticut
March 14, 2002

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INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Stockholders of
Jupitermedia Corporation
Darien, Connecticut

          We have audited the accompanying consolidated balance sheet of Jupitermedia Corporation and subsidiaries (the “Company”) as of December 31, 2002, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the year ended December 31, 2002.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on the financial statements based on our audit.  The consolidated financial statements of the Company as of December 31, 2001 and for the years ended December 31, 2000 and 2001, prior to the addition of the transitional disclosures described in Note 5 and prior to the restated disclosures for reportable segments described in Note 7 to the consolidated financial statements, were audited by other auditors who have ceased operations.  Those auditors expressed an unqualified opinion on those financial statements in their report dated March 14, 2002.

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

          In our opinion, such 2002 consolidated financial statements present fairly, in all material respects, the financial position of Jupitermedia Corporation and subsidiaries as of December 31, 2002, and the results of their operations and their cash flows for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America.

          As described in Note 5 to the consolidated financial statements, effective January 1, 2002, the Company changed its method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standards No. 142.

          As discussed above, the consolidated financial statements of Jupitermedia Corporation and subsidiaries as of December 31, 2001, and for the years ended December 31, 2000 and 2001 were audited by other auditors who have ceased operations.  As described in Note 5, these financial statements have been revised to include the transitional disclosures required by Statement of Financial Accounting Standards No. 142 “Goodwill and Other Intangible Assets” (“SFAS No. 142”), which was adopted by the Company as of January 1, 2002.  Our audit procedures with respect to the disclosures in Note 5 related to 2000 and 2001 included (i) agreeing the previously reported net loss to the previously issued financial statements and the adjustments to reported net loss representing amortization expense recognized in those periods related to intangible assets and goodwill that are no longer being amortized, as a result of initially applying SFAS No. 142 to the Company’s underlying records obtained from management, and (ii) testing the mathematical accuracy of the reconciliation of adjusted net loss to reported net loss, and the related per share amounts.  In addition, as described in Note 7, the Company changed the composition of its reportable segments in 2002, and the amounts disclosed in the 2000 and 2001 financial statements relating to reportable segments have been restated to conform to the 2002 composition of reportable segments.  We audited the adjustments that were applied to the restated disclosures for reportable segments reflected in the 2000 and 2001 financial statements.  Our procedures included (1) comparing the adjustment amounts of

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segment revenues, cost or revenues and operating expenses and operating income (loss), to the Company’s underlying analysis obtained from management, and (2) testing the mathematical accuracy of the reconciliations of segment amounts to the consolidated financial statements.  In our opinion, the transitional disclosures for 2000 and 2001 in Note 5 and the adjustments applied to the restated disclosures in Note 7 are appropriate.  However, we were not engaged to audit, review, or apply any procedures to the 2000 and 2001 financial statements of the Company other than with respect to such disclosures referred to above in Notes 5 and 7 and, accordingly, we do not express an opinion or any other form of assurance on the 2000 and 2001 financial statements taken as a whole.

DELOITTE & TOUCHE LLP
Stamford, Connecticut
February 11,  2003

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Jupitermedia Corporation

Consolidated Balance Sheets

December 31, 2001 and 2002

(in thousands, except share and per share amounts)