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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2003

OR

For the transition period from                                 to                                 

Commission file number: 333-76331

Jupitermedia Corporation

(Exact name of Registrant as specified in its charter)

(203) 662-2800

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x    No ¨

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).  Yes ¨    No x

The aggregate market value of voting common stock held by non-affiliates of the registrant as of June 30, 2003, based upon the last sale price of such common stock on that date as reported by the Nasdaq National Market was $51,362,843.

The number of shares of the outstanding registrant’s Common Stock as of March 2, 2004, was 26,147,079.

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 2004 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.

Jupitermedia Corporation

Annual Report on Form 10-K

Table of Contents

“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 make successful acquisitions and ability to integrate acquired businesses, products and personnel into its existing businesses; Jupitermedia’s dependence on a limited number of advertisers; and Jupitermedia’s ability to protect its intellectual property rights. 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.

Part I

ITEM 1. BUSINESS

Overview

Jupitermedia is a leading global provider of original online information, images, research and events for information technology (“IT”), business and creative professionals. We develop and disseminate vertically focused, original content and provide access to one of the largest online image libraries, all of which provide our users with the knowledge and tools that they need to accomplish their day-to-day job functions. We deliver our content through a number of our proprietary channels, including our extensive online media networks, our online images networks, our proprietary research business, and our trade shows and conferences.

We operate four interrelated and complementary businesses through some of the most well known brands targeted at IT, business and creative professionals:

We have developed and branded these businesses in a manner which enables us to cross-leverage and cross-promote the content and users of each. For example, many of the users of our online media networks also attend our events, subscribe to our research and utilize our images products. Similarly, many attendees at our conferences also use our online networks and subscribe to our research, and many of our research clients use our online networks and attend our events.

Our Strategy

Our objective is to strengthen our position as a leading provider of original online information, images, research and events for information technology, business and creative professionals. We intend to achieve this objective by continuing to execute on the following strategies:

Leverage Our Interrelated and Complementary Business Segments. We operate in four interrelated and complementary business segments. We will continue to cross-leverage and cross-promote our various products and service offerings among the users of our online networks, users of our image and research offerings, and attendees to our events.

Identify and Define Emerging Technologies and New Business Opportunities. We continually search for emerging technologies and topics that are of interest to IT, business and creative professionals. We believe that our creative and entrepreneurial culture enables us to identify technology and business shifts before these changes are apparent to most of our users and competitors.

Create and Monetize New Offerings and Services. We expect to strengthen our existing offerings of products and services by continuing to improve our original content, images, research and events available for our users, clients and customers. We expect to continue to identify emerging technologies and topics of interest and then create original content, images, research and events for those topics through internal development and strategic acquisitions. We expect to continue to develop additional revenue sources through the launch of new content areas, images, research coverage topics and events.

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Grow Through Targeted Acquisitions. We have made a number of acquisitions since our inception and we expect to continue to aggressively pursue strategic acquisition opportunities to strengthen our offerings and services. We may also acquire IT and Internet related media properties, images and graphics related properties to obtain valuable content, images, brands, expertise and access to new users, advertisers and vendors. Although we are currently considering potential strategic acquisitions, we have no binding commitments or agreements with respect to any such acquisitions. We intend to use the experience gained from our numerous acquisitions in order to identify, evaluate, acquire and integrate other media and image properties which are complementary to our business. Our recent acquisitions of ArtToday, one of the leading paid subscription resources on the Web, and DevX.com and its leading developer-oriented readership, are complementary to our other online properties and have expanded and diversified our revenue sources.

Segments

We operate in four business segments under the following brands:

Segment financial data for the years ended December 31, 2001 through 2003 appears in Note 7 to the Consolidated Financial Statements.

Online media

The following is a brief description of each of our Online media networks:

We generate our Online media revenues primarily from advertising sold on our Web sites, e-mail newsletters, online discussion forums and moderated e-mail discussion lists. We typically provide guarantees of a minimum number of advertising impressions or times that users of our Web sites and related media properties

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view an advertisement. Revenues from advertising on our Online media networks were 58.4%, 46.3% and 39.4% of consolidated revenues for the years ended December 31, 2001, 2002 and 2003, respectively.

We also generate online media revenues from the following:

Custom Online Publishing. We offer custom online publishing programs developed in conjunction with our customers to help them achieve their marketing objectives. Depending on customer requirements, these programs offer prominent placement within the most relevant sections of our networks, which ensures that our customers’ messages and offers are seen by the appropriate audience.

Permission Based Opt-in E-Mail List Rentals. We offer for rental our permission based opt-in e-mail list names relating to over 230 IT and Internet-specific topics. Our 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. We offer paid subscription services to our customers for our e-mail newsletters and services SearchEngineWatch.com, TheCounter.com, TheGuestbook.com, WinDrivers.com, DevXPremierClub and AlertIPO.com. These subscription services are sold through our own networks and through third party relationships.

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

Licensing Agreements. We license certain editorial content, software and brands to third parties for fixed fees and royalties. 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. We also license software to third parties which is used for Web site development. We provide access to limited versions of our editorial content to others at no charge in order to promote our brands and generate traffic.

Webinars. We offer JupiterWebinars, which are objective, educational online forums that provide focused research findings and analysis from our JupiterResearch business and from other notable analysts, journalists and industry experts. JupiterWebinars are free to qualified professionals. We generate revenue from advertiser sponsorships.

Online images

Our JupiterImages network of graphics related Web sites, formerly the ArtToday.com network, includes Photos.com, ClipArt.com, Graphics.com, Animations.com and FlashComponents.com, among others. We believe that ClipArt.com is the largest paid subscription-based graphics resource on the Web with over 2,600,000 clipart images, animations, photos, fonts and sounds.

The JupiterImages network of Web sites has a library of over 3 million online images and, as of January 2004, generated over 85 million page views per month. We generate our Online images revenue primarily from paid subscriptions, which are offered based on a variety of prices and terms, to access our image libraries. Once a customer becomes a subscriber, they have the ability to obtain copies of images within our image libraries. Paid subscriptions are primarily sold online through our networks and through third party relationships. We also license a portion of our images to third parties for royalties based on the licensee’s revenues generated by the licensed images.

Research

JupiterResearch covers a variety of sectors and industries to provide clients with original and proprietary information to understand how the Internet and new technologies impact marketing and commerce. JupiterResearch provides objective insight and analysis, backed by proprietary data in the form of forecasts,

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consumer surveys and executive surveys. JupiterResearch analysts bring to clients domain expertise, a crucial element to put into context both specific data and changing events. We believe that our expertise with business and technology enables us to offer our clients the best available research on how the Internet and new technologies impact marketing and commerce.

JupiterResearch consists of two main product lines: syndicated research and custom research and consulting.

Syndicated Research. Syndicated research delivers data and original and proprietary analysis through both written research reports and 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 look 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, either as a package of all research and reports covering our primary business areas or on a selective, area-by-area or market-by market basis. Our research coverage areas include the following 18 primary business areas and 14 vertical markets:

Custom Research and Consulting. Our Custom Research and Consulting products address our clients’ 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 JupiterResearch’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.

Events

JupiterEvents produces offline conferences and trade shows focused on IT and business-specific topics that are aligned with our online media properties. JupiterEvents include an extensive conference program that

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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 events through our online media networks. 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.

Events scheduled for 2004, some of which are produced in multiple cities in both the United States and around the world each year, include:

Venture Fund Investments

We are the portfolio manager of, and an investor in, internet.com Venture Fund I LLC, or Fund I, a $5.0 million venture fund formed in March 1999, internet.com Venture Fund II LLC, or Fund II, a $15.0 million venture fund formed in September 1999, and internet.com Venture Partners III LLC or Fund III, 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 our business. In February 2003, the operating agreement of Fund II was amended to provide for the cessation of fund investments and dissolution of Fund II following year-end 2003. In October 2002, the operating agreement of Fund III was amended to reduce Fund III’s committed capital from $75.0 million to $22.5 million and to provide for the cessation of fund investments, dissolution of the fund and the distribution of the fund assets following year-end 2003. Both Fund II and Fund III are in the process of dissolution and final distributions are expected to be made following such dissolutions. We invested $700,000 in Fund I, $1.8 million in Fund II and $3.1 million in Fund III, all of which are now fully invested. The remaining $4.3 million of capital raised and funded in Fund I, $13.2 million raised and funded in Fund II and $19.4 million raised and funded in Fund III were sourced from third party investors. We no longer have any outstanding capital commitments related to these three venture funds. The aggregate carrying value of our investments in these funds was $710,000 as of December 31, 2003.

Through I-Venture Management LLC, we earn management fees for the day-to-day operation and general management of our venture funds. In addition, through I-Venture Management LLC, we are entitled to up to 20% of the realized gains on investments made by these funds, after an 8% per annum preferred return to investors. Due to the scheduled liquidation and dissolution of Fund II and Fund III, these fees will be negligible in 2004 and in the future.

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 December 31, 2003, Mr. Meckler beneficially owned approximately 52.4% 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.

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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 and Sales

Our marketing efforts are directed largely at acquiring advertising and research clients, subscribers to our paid subscription products, and exhibitors, sponsors and attendees for our events.

We employ a combination of online and offline advertising and promotional campaigns to promote our content offerings and services to our users, advertisers and vendors. User advertising includes cross-promotion on our networks, advertising in trade publications and at trade shows and promotional links from Web sites that attract demographically similar audiences. We use public relations, user groups, trade shows, including both JupiterEvents and third-party industry events, and speaking engagements to generate publicity for our products and services. We also use print advertising in various industry related trade publications, highly targeted traditional direct mail campaigns by mailing postcards and/or brochures to select lists in targeted geographic areas. We barter a portion of the unsold advertising impressions generated by our networks, exhibition and sponsorship positions at our events as well as attendee passes to our events in exchange for advertising and promotion in media properties owned by third parties. Barter represents non-cash transactions where we deliver advertisements on our networks in exchange for services of other companies, primarily advertisements on their Web sites or in their publications. The primary reason for entering into such transactions is that they enable us to benefit from marketing exposure without using cash.

We sell most of our Online media, Research and Events products through separate direct sales forces. Our U.S. sales forces operate 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 and a number of European countries. Sales 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. Our Online images products are sold primarily on our Web sites.

Geographic Financial Information

The following table sets forth, for the periods indicated, a year-over-year comparison of the percentage of our revenues by geographic region:

Recent Developments

On June 30, 2003, we acquired all of the stock of ArtToday, an Arizona corporation, pursuant to a stock purchase agreement, dated as of June 24, 2003, by and between Jupitermedia and International Microcomputer Software, Inc. (“IMSI”). The consideration paid consisted of cash in the amount of $13.0 million and 250,000 shares of Jupitermedia’s common stock. Additional cash earn out payments may be made based on net revenue targets achieved by ArtToday for the period from July 1, 2003 to December 31, 2003; for the period from January 1, 2004 to June 30, 2004; and for the period from July 1, 2004 to June 30, 2005. Based upon the results of ArtToday for the period from July 1 to December 31, 2003, IMSI was paid $1.0 million in February 2004, representing the maximum amount that could have been earned for this earn-out period. In 2004, we renamed our Online images business that was formerly known as ArtToday to JupiterImages.

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On July 11, 2003, we acquired the assets of DevX.com from DevX.com, Inc., a Delaware corporation (n/k/a XD Remainder Corp.) (“DevX”), pursuant to an asset purchase agreement, dated July 11, 2003, between DevX and Jupitermedia. The consideration paid consisted of cash in the amount of $2.25 million and 200,000 shares of Jupitermedia’s common stock plus the assumption of certain liabilities including accounts payable and obligations to fulfill contractual commitments.

On August 27, 2003, we filed a registration statement on Form S-3 with the Securities and Exchange Commission (“SEC”) to permit the resale from time to time of the shares of common stock issued to IMSI and DevX in connection with the acquisitions. On September 10, 2003, the SEC declared such registration statement effective.

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, moderated e-mail discussion lists and research reports 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 over 50 other countries for a number of our trademarks and service marks. We have encountered obstacles to registration of some marks in several of these countries. 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.

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

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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 content, software and brands are maintained by such licensees, we cannot be sure that such licensees will not take actions that might decrease the value of our brands, proprietary rights or reputation, which would harm our business, prospects, financial condition, results of operations and cash flows.

Domain Names

We own registrations and numerous 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 comparable domain names 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.

The results of our Research business vary with the amount of custom research projects performed during each period.

The results of our Events business vary with the topics, frequency and timing of the events we produce.

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 individuals and companies, many of which are focused on IT, the Internet and graphics.

The following table sets forth, for the periods indicated, a year-over-year comparison of the percentage of our revenues derived from the 20 largest customers in each segment. One customer accounted for 11% of our Online media revenues in 2003. No customer accounted for more than 10% of our consolidated revenues during any of the periods presented.

If we were to lose one or more of our significant customers, our future financial statements could be negatively affected.

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Backlog

The following is a summary of our backlog for each of our segments as of December 31, 2002 and 2003 (in thousands):

Our Online media backlog consists of commitments for advertising, opt-in e-mail, list rental, e-commerce and licensing arrangements on our networks and subscriptions to our paid subscription services. Our Online images backlog consists of subscriptions to our JupiterImages products. Our Research backlog consists of subscriptions to our research products. Our Events backlog consists of prepayments of attendee registration fees and contracts for exhibition space and sponsorships.

Substantially all of our backlog as of December 31, 2003 will be recognized as revenue in 2004.

Competition

Online media

The market for Internet-based services is 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. Competitive factors in this industry include editorial quality, quantity and quality of the users of our networks, customer service, pricing and the strength of our complementary offerings. 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., International Data Group, Open Source Development Network, Inc., TechTarget and Ziff-Davis Inc. We also compete for circulation and advertising impressions with general interest portal and destination Web sites as well as traditional media.

Online images

The market for visual content is highly competitive. Competitive factors in this industry include the quality, relevance and diversity of our image library, the quality of our contributing photographers, customer service, pricing, accessibility of our images and our speed of fulfillment. Our primary competitors include Getty Images, Inc., Corbis Corporation and Comstock, Inc. We also compete with smaller image aggregators throughout the world.

Research

Competitive factors in the market for research products and services include the quality, relevance and timeliness of our research and analysis, customer service and price. Our principal competitors are Forrester Research, Inc., Gartner Inc., META Group Inc. and IDC, a subsidiary of International Data Group. 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 International Data Group and MediaLive

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International, Inc. Competitive factors in this industry include the availability of desirable venues and dates, the ability to provide topics that meet the needs of our customers, the ability to attract qualified attendees and the ability to provide high-quality show services, exhibitions space, marketing and sponsorship opportunities. 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 December 31, 2002 and 2003:

ITEM 2. PROPERTIES

The following table sets forth a list of our current office leases:

In addition, we lease small office locations in 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.

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ITEM 3. LEGAL PROCEEDINGS

A complaint was filed in Delaware Chancery Court (the “Court”) on June 16, 1999 by a former shareholder of Mecklermedia Corporation (“Mecklermedia”) alleging that Messrs. Alan M. Meckler and Christopher S. Cardell, each an executive officer and director of Jupitermedia, as well as the other former directors of Mecklermedia, breached their fiduciary duties of care, candor and loyalty in connection with the approval of both the sale of Mecklermedia to Penton Media, Inc. (“Penton Media”) in November 1998 and the related sale of 80.1% of the Internet business of Mecklermedia to Mr. Meckler. Jupitermedia was also named as a defendant. The action was brought as a class action purportedly on behalf of a class of all shareholders of Mecklermedia (other than any defendant) whose shares were acquired by Penton Media, and seeks damages from all defendants and the imposition of a constructive trust on the benefits obtained by any defendant, including Mr. Meckler’s holdings of Jupitermedia.

On or about November 7, 2000, defendants were served with an amended complaint, which named three additional plaintiffs. As with the original complaint, the amended complaint asserted that the former directors of Mecklermedia breached their fiduciary duties of care, candor, loyalty and good faith to the Mecklermedia shareholders in connection with approving the Penton Media transaction and the related sale of 80.1% of the Internet business of Mecklermedia to Mr. Meckler. The amended complaint asserted claims for damages, and also named Jupitermedia as a defendant seeking that a constructive trust be established consisting of any benefits derived by the defendants in respect of the alleged breaches but not seeking damages against us.

On or about October 9, 2001, with leave of the 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 April 1, 2002. On November 6, 2002, the Court issued an opinion denying 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.

On February 28, 2003, Jupitermedia filed a lawsuit in the United States District Court for the District of Colorado alleging that the defendants, Michael Anderson, Prime Directive, Inc. and Part-15 Corporation are knowingly and willfully using the name “WISPCON” to advertise, promote and conduct a variety of Internet / information technology trade shows, where such name is deliberately and confusingly similar to the plaintiffs’ pre-existing use in connection with their own Internet / information technology trade shows of the trademarked, service marked and branded name “ISPCON.” We own 49.9% of the ISPCON joint venture, pursuant to which we provide marketing, sales and other event support for the ISPCON trade shows. We are seeking injunctive relief and damages under a variety of legal theories, including trademark infringement, unfair competition, trademark dilution, deceptive trade practices, interference with contract and unjust enrichment. Defendants filed a motion to dismiss for lack of personal jurisdiction, which is pending, but also have filed an Answer and Counterclaim. Defendants seek injunctive relief and damages on their counterclaim for what they allege is the plaintiffs’ wrongful use of the name “WISPCON.” Discovery has commenced in the case. We intend to vigorously defend ourselves against the defendants’ counterclaim.

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

Our common stock 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 March 1, 2004, there were 75 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. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon our financial condition, results of operations and capital requirements.

EQUITY COMPENSATION PLAN INFORMATION

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ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated 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.”

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

Overview

We are a leading global provider of original online information, images, research and events resources for information technology (“IT”), business and creative professionals. Our operations are classified into four principal segments: Online media, Online images, Research and Events.

Online media. Online media includes JupiterWeb, which consists of our internet.com, EarthWeb.com, DevX.com and ClickZ.com networks of over 150 Web sites and over 150 e-mail newsletters that generated, as of January, 2004, over 200 million page views monthly.

We generate our Online media revenues from:

The principal costs of our Online media business relate to payroll for our editorial, technology and sales personnel as well as technology related costs for facilities and equipment.

Online images. Online images include our JupiterImages network, which is one of the largest paid subscription-based graphics resources on the Web.

We generate our Online images revenues primarily from paid subscriptions that provide access to our image libraries. Customers may purchase subscriptions, which are offered based on a variety of prices and terms, to access our image libraries. Once a customer becomes a subscriber, they have the ability to obtain copies of images within our image libraries.

The principal costs of our Online images business relate to production and marketing personnel, technology infrastructure, royalties for images that we license, lead generation fees for sales referrals and credit card processing fees.

Research. Research includes our JupiterResearch business, which provides clients with original and proprietary information to better understand how the Internet and new technologies impact marketing and commerce.

We generate our Research revenues primarily from the sale of our syndicated research products. These products deliver data and analysis via written research reports and analyst inquiry. Our syndicated research is typically sold on an annual subscription basis. We also generate revenue through the sale of our custom research product, which delivers specific research based on the needs of our customers. The results of our Research business vary with the amount of custom research projects performed during each period.

The principal costs of our Research business relate to analyst and sales personnel and costs to acquire third party research data.

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Events. Events include our JupiterEvents business that produces offline events focused on IT and business-specific topics that are of interest to our users.

We generate our Events revenues from attendee registrations, the purchase of exhibition space by exhibitors who pay a fixed price per square foot of booth space and advertiser and vendor sponsorships. The results of our Events business vary with the topics, frequency and timing of the events we produce.

The principal costs of our Events business relate to operations and sales personnel, venue and speaker costs and advertising expenses to attract attendees to our events.

Recent Acquisitions

During 2003, we made two significant acquisitions. On June 30, 2003, we acquired all of the stock of ArtToday, Inc. (“ArtToday”) from International Microcomputer Software, Inc. (“IMSI”) for $13.0 million in cash, 250,000 shares of Jupitermedia common stock and an earn-out that could result in an additional $4.0 million in cash consideration over the next two years. Earn-out payments are based on net revenue targets achieved by ArtToday for the period from July 1, 2003 to December 31, 2003; for the period from January 1, 2004 to June 30, 2004; and for the period from July 1, 2004 to June 30, 2005. Based upon the results of ArtToday for the period from July 1, 2003 to December 31, 2003, IMSI was paid $1.0 million in February 2004, representing the maximum amount that could have been earned for this earn-out period. In 2004, we renamed our Online images business that was formerly known as ArtToday to JupiterImages.

In addition, we acquired the assets of DevX.com, Inc. (“DevX.com”) on July 11, 2003 for $2.25 million in cash, 200,000 shares of Jupitermedia common stock and the assumption of certain liabilities. We also made several smaller acquisitions to complement our current product and service offerings.

During 2002, we made one significant acquisition. On July 31, 2002, we acquired certain assets and assumed certain liabilities of the JupiterResearch business from Jupiter Media Metrix, Inc. (“JMXI”) for $250,000 and the assumption of certain liabilities including obligations to fulfill contractual obligations.

In 2004, we expect to continue to develop and expand our current offerings through internal development and, where appropriate opportunities are identified, through acquisitions to drive revenue and earnings growth. In 2004, we expect to see continued growth in our business segments.

Results of Operations

Revenues

The following table sets forth, for the periods indicated, a year-over-year comparison of our revenues by segment (dollars in thousands):

Online media. During 2001, we began to experience a reduction in advertising revenues due to the general downturn in the U.S. economy, particularly related to technology spending. This decrease continued through 2002 and the first quarter of 2003. Beginning with the second quarter of 2003 and throughout the remainder of 2003, we experienced increases in revenues as conditions in the U.S. economy improved and advertisers, particularly technology companies, began to increase their advertising spending.

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The following table sets forth, for the periods indicated, a year-over-year comparison of our Online media revenues, including barter.

The following table sets forth, for the periods indicated, the number of our Online media advertisers and the average revenue derived from each advertiser (dollars in thousands):

In addition, overall revenues from our Online media segment decreased in 2003 as compared to 2002 and 2001 largely as a result of a decrease in barter revenue due primarily from the termination of a services agreement with Penton Media, Inc. in 2003. The decrease in barter revenues from 2001 to 2002 was due to a decrease in the number of barter transactions into which we entered.

We acquired the assets of DevX.com, Inc. on July 11, 2003 and this acquisition contributed $2.0 million to revenues in 2003.

Online images. We acquired ArtToday on June 30, 2003, and therefore there are no financial results for the Online images segment prior to this date. The $4.0 million of revenues in 2003 represents the revenues of ArtToday from July 1 through December 31, 2003. Revenues increased from $1.8 million in the third quarter of 2003 to $2.2 million in the fourth quarter of 2003, an 18.7% increase, due in part to increased average selling prices of our products and services. Subscription bookings for our Online images business increased from $2.1 million in the third quarter of 2003 to $2.5 million in the fourth quarter of 2003, a 19.4% increase.

Research. We acquired our JupiterResearch business on July 31, 2002, and therefore there are no financial results for this segment prior to this date. The $5.1 million of revenues in 2002 from our JupiterResearch business represent the revenues for the period from August 1, 2002 through December 31, 2002.

The results of operations for JupiterResearch presented in the table above for 2002 represent the period from our acquisition date of July 31, 2002 through December 31, 2002. Revenues increased in 2003 due to our ownership of JupiterResearch for a full year in comparison to this five-month period in 2002. Had we owned the JupiterResearch business for the full year ended December 31, 2002, we believe our revenues and costs for this business would have been higher than the amounts presented for the five months ended December 31, 2002. In addition, we believe there would have been a loss from operations for this business during the year ended December 31, 2002. Following our acquisition, we began to see an increase in the renewal rates for our syndicated research contracts as renewing customers were informed of our acquisition and our plans to support and further develop the JupiterResearch business. In addition, we saw continued increases in renewal rates in 2003 as conditions in the U.S. economy improved, as we launched several new research coverage areas and as companies once again began investing in market research. We also saw an increase in the amount of custom research projects completed for our customers.

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The following table sets forth, for the periods indicated, a quarter-by-quarter comparison of the JupiterResearch syndicated renewal rates for 2002 and 2003 since our acquisition in 2002:

The following table sets forth, as of the last day in the periods indicated, a quarter-by-quarter comparison of the JupiterResearch active contracts since our acquisition in 2002 (dollars in thousands):

Active contract value is defined as the total value of all active syndicated research contracts without taking into account the amount of revenue recognized to date or the amount of revenue available to be recognized in the future. The decrease in the number of contracts and the total active contract value from 2002 to 2003 is related to the general downturn in the U.S. economy that began in 2000. During 2003, we have seen an increase in the number of customers and, during the fourth quarter of 2003, we began to see an increase in total value of our active contracts.

Events. The results of our Events business vary with the topics, frequency and timing of the events that we produce. We have made investments in events focused on specific vertical content areas that align with our other properties and, depending upon their success, we may or may not produce the events in the future. The following table sets forth, for the periods indicated, a year-over-year comparison of the number of events we produced and a listing of the amount of our revenues relating to sponsor and exhibitor, paid attendance and barter revenues during the periods shown (dollars in thousands):

Barter revenues vary from 2001 in 2003 in correlation to the number of barter transactions into which we entered.

Other. Other revenues represent management fees from our management of the internet.com venture funds. The year-over-year reduction in revenues from 2001 to 2003 was due to the decrease in the value of the investments within the venture funds. Due to the scheduled liquidation and dissolution of internet.com Venture Fund II LLC and internet.com Venture Partners III LLC, these revenues will be negligible in 2004 and in the future.

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Cost of revenues and gross profit

The following table sets forth, for the periods indicated, a year-over-year comparison of our cost of revenues and gross profit by segment (dollars in thousands):

Cost of revenues

Gross profit

Gross profit %

Online media. Cost of revenues primarily consists of payroll for editorial personnel, freelance costs, communications infrastructure and Web site hosting. Due to the economic downturn in 2001, we reduced the costs associated with our Online media business. The year-over-year reduction in cost of revenues from 2001 to 2003 was due primarily to reduced costs associated with editorial and freelance personnel. In addition, as we were able to obtain economies of scale with certain of our acquisitions, we were able to reduce costs related to communication infrastructure and Web site hosting.

The acquisition of the assets of DevX.com, Inc. added an additional $850,000 to cost of revenues in 2003.

We intend to make investments through internal development and, where appropriate opportunities arise, acquisitions to continue to expand our content offerings. We may need to increase our spending in order to create additional content related to new topics or offerings.

Online images. Cost of revenues primarily consists of payroll costs for production personnel, communications infrastructure, Web site hosting, storage for our image library and royalties. We license a

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portion of our image library from third parties and pay them a portion of the revenues we receive from our customers as royalties. During 2003, royalty expense was $492,000. The amount we will pay in future royalties will vary in correlation to our revenues and the mix in the ownership of the images within our image library.

We intend to make investments through internal development and, where appropriate opportunities arise, acquisitions to continue to expand our image library and to substitute licensed images with images that we own that will result in reduced royalty expenses in the future. As we continue to make investments to increase the size of our image library, we may need to increase our spending for Web site hosting and storage costs.

Research. Cost of revenues primarily consists of payroll costs related to research analysts and costs to acquire third party research data. Cost of revenues increased in 2003 due to our ownership of JupiterResearch for a full year in 2003 in comparison to a five-month period in 2002.

We intend to make investments in new research coverage areas where appropriate and this may result in increased costs related to hiring personnel and acquiring data to produce our research.

Events. Cost of revenues primarily consists of payroll costs related to operations employees and event production costs such as venue and speaker costs. Costs of revenues have increased year-over-year from 2001 to 2003 due to the growth in the size of certain of our events and the launch of first-time events.

We intend to continue to make investments to launch new events that align with our other properties. In addition, depending upon the success of certain events, we may increase the frequency of the number of times we run an event relating to a specific topic.

Advertising, promotion and selling

The following table sets forth, for the periods indicated, a year-over-year comparison of our advertising, promotion and selling expenses by segment (dollars in thousands):