USWeb/CKS Reports Record Revenues for Second Quarter

1999 SANTA CLARA, Calif. (PROTEXT) - Breaks 100 Million DollarQuarterly Revenue Mark; Attains Sequential Quarterly RevenueIncrease of 20%; Realizes Record Margins While AchievingSignificant Milestones and Scale USWeb/CKS (Nasdaq: USWB), the leader in strategic Internet andmarketing communications services, today reported that itsfinancial results for the second quarter of 1999 included record-high quarterly revenues. Revenues for the second quarter of 1999 were $101.0 millionand net income before non-cash charges and after the applicationof an assumed 38% effective tax rate was $10.0 million or $0.12per diluted share. Including non-cash charges, the companyreported a net loss for the quarter of $22.6 million or $0.29 pershare. Compared to the prior year, second quarter revenuesincreased 87%, from $54.0 million. In the second quarter of 1998,net income before non-cash charges and after the application ofan assumed 38% effective tax rate was $3.0 million or $0.05 perdiluted share, and net loss including non-cash charges was $61.1million or $1.08 per share. Non-cash charges include a provision for contract loss orrecovery (which represents the value of certain warrants grantedin a strategic relationship), stock compensation, acquired in-process technology, amortization of intangible assets, anddepreciation and amortization. "Reaching the $100 million quarterly revenue mark demonstratesthat the hard work performed over the past two quarters is payingoff," said Robert Shaw, CEO of USWeb/CKS. "We grew the business20% sequentially while at the same time improving operatingmargins to 15%, before non-cash charges, which highlights theleverage in our business model." Leadership Milestones Shaw continued, "We are recognized as an industry powerhouseand intend to capitalize on our strong position. USWeb/CKS isfast becoming one of the most important companies in the digitaleconomy -- reaching a scale and critical mass very few Internetprofessional services firms can match." * First pure-play Internet professional services firm to reach$100 million quarterly revenue milestone * Unequaled insight: Market-leading vision and expertiseacross strategy, marketing and technology disciplines * Unparalleled scale: Over 2,900 employees provide the talentand market-leading expertise in 40 offices in 10 countries thatallows USWeb/CKS the ability and scale to execute at Internetspeed * Industry-leading experience: Over 4,000 client projects andengagements which represents more experience than any otherInternet professional services firm * Size and scope of client work expanded. Top client revenuefor the quarter, annualized: - Top 10 clients was $8.5 million, 18% growth from lastquarter - Top 30 clients was $5.0 million, 17% growth from lastquarter * Major client wins and successes demonstrate high demand forUSWeb/CKS's time-to-value proposition - delivering breakthroughresults fast. Standout examples include: branding and e-commercesolution for Mars Music; online pharmacy for Walgreens; e-commerce platform for Williams-Sonoma brands; Internet-based datawarehousing applications for 20th Century Fox; site redesign andbranding for AOL; and hot start ups such as Ask Jeeves, MyPointsand RePlay Networks * Recruiting magnet: The Company recruited over 500 people in90 days while maintaining a healthy 80% annualized retention rate * Completed on-time deployment of phase one integrated back-office systems * USWeb/CKS's intranet, a cornerstone competitive factor forthe Company, won significant industry recognition as a nextgeneration knowledge management system Shaw continued to highlight that, "our people are USWeb/CKS'smost important asset and our second quarter results are a clearreflection of the caliber of people we recruit and retain. We'vebegun to put into place creative programs and initiatives thatcontinue to make USWeb/CKS a fun and exciting place to work,attracting talented professionals from leading firms anduniversities internationally." About USWeb/CKS USWeb/CKS is the leading professional services firm that workswith clients to define strategies and implement innovative waysto build their businesses through a combination of expertise instrategy, Internet technology and marketing communications.USWeb/CKS helps clients differentiate their products andservices, strengthen customer relationships, leverage humancapital, and improve business efficiency in the new electroniceconomy. The Company provides a broad selection of services frombrand development and advertising to business process automationand e-commerce solutions. The Company headquarters are in SantaClara, California. Additional information about USWeb/CKS isavailable by calling 408-987-3200 or at http://www.uswebcks.com. This press release contains "forward-looking statements" (asdefined under securities law) regarding potential opportunitiesfor USWeb/CKS to continue and build leadership in its markets andto attract and retain talented employees. USWeb/CKS's actualfuture results, including those in achieving its leadership,hiring, retention, timing, market share and financial goals, maydiffer materially and adversely from those discussed in thispress release. Factors that may cause such a differences includethe rate of adoption of Internet technology by largeorganizations and the level of investment these organizationsmake in Internet-related professional services, the Company'sability to differentiate itself from competitors and win newclients, the risks associated with implementation of theCompany's products and service offerings, technical challenges,the Company's ability to attract, retain and motivate talentedemployees, timing in delivering completed projects, costsassociated with formation of Internet data centers, risksrelating to the integration of acquired entities, includingdifficulties in integration or loss of customers or employees,and diversion of management and employee time and attention fromother aspects of the Company's business. Current revenue growthpatterns are not necessarily indicative of future performance.For additional information about factors that could affect theCompany's business, see the company's documents filed with theUnited States Securities and Exchange Commission.

USWEB/CKS

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

June 30, December 31,

1999

1998

(UNAUDITED)

ASSETS Current assets: Cash and cash equivalents

$46,658

$64,956 Short-term investments

35,981

36,230 Accounts receivable, net

137,890

89,038 Other current assets

12,653

9,946 Deferred tax assets

637

637

Total current assets

233,819

200,807 Property and equipment, net

26,589

18,880 Intangible assets, net

198,899

168,335 Deferred income taxes and other assets

18,896

15,152

$478,203

$403,174

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable

$48,863

$38,251 Accrued expenses

68,027

52,908 Deferred revenue

7,834

4,210 Income taxes payable

2,528

3,111 Lease obligations, current

3,076

3,445

Total current liabilities

130,328

101,925 Lease obligations, long-term portion

2,721

1,377

133,049

103,302 Stockholders' equity: Common Stock

72

66 Additional paid-in-capital

666,500

546,976 Accumulated deficit

(321,418) (247,170)

Total stockholders' equity

345,154

299,872

$478,203

$403,174

USWEB/CKS CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share amounts) (Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

1999

1998

1999

1998 Historical Data: Revenues

$100,966

$54,041

$185,078$93,366 Cost of revenues: Services

60,454

32,666

111,826

58,410 Depreciation and

amortization

1,731

1,196

3,285

2,202 Provision for (recovery of)

lost on contract (15,706)

9,430

(4,491)

9,430 Stock compensation 4,763

3,576

9,171

5,257

Total cost of

revenues

51,242

46,868

119,79175,299 Gross profit

49,724

7,173

65,28718,067 Operating expenses: Marketing, sales and

support

9,089

6,961

17,84012,146 General and

administrative

16,285

10,562

29,80619,664 Depreciation and

amortization

740

445

1,356777 Acquired in-process

technology

1,389

18,289

2,21222,612 Stock compensation

9,520

13,534

18,66816,102 Amortization of

intangible assets 35,414

17,364

64,88722,224 Merger and integration

costs

--

--

5,316

--

Total operating expenses

72,437

67,155

140,08593,525 Loss from operations (22,713)

(59,982)

(74,798)(75,458) Interest income, net

1,020

1,051

1,9211,976 Loss before income taxes

(21,693)

(58,931)(72,877)(73,482) Provision for income taxes

880

2,181

1,3712,885

Net loss

$(22,573)

$(61,112)

$(74,248)$(76,367) Net loss per share (1): Basic and diluted

$(0.29)

$(1.08)

$(1.02)$(1.37) Weighted average

shares outstanding

76,804

56,648

72,64855,742 Supplemental Data: Gross profit as reported

$49,724

$7,173

$65,287$18,067 Non-cash and merger

related charges (2) (9,212)

14,202

7,96516,889 Supplemental gross profit

$40,512

$21,375

$73,252$34,956 Net loss before income

taxes as reported $(21,693)

$(58,931)

$(72,877)$(73,482) Non-cash and merger

related charges (2)

37,851

63,834

100,40478,604 Provision for income

taxes (3)

(6,140)

(1,863)

(10,460)(1,946) Supplemental net income

$10,018

$3,040

$17,067$3,176 Supplemental net income per share (1): Basic supplemental net

income per share

$0.13

$0.05

$0.23$0.06 Basic supplemental

weighted average

shares outstanding

76,804

56,648

72,64855,742 Diluted supplemental net

income per share

$0.12

$0.05

$0.20$0.05 Diluted supplemental

weighted average

shares outstanding

85,599

58,322

85,55758,300 (1) Net loss per share is computed in accordance with SFAS No.128, "Earnings Per Share," and SEC Staff Accounting Bulletin No.98 for all periods presented.The computation excludes: (i)acquisition-related shares held in escrow, and (ii) Common Stocksubject to repurchase rights.The computation of net loss anddiluted supplemental net loss per share excludes Common Stockissuable upon exercise of certain employee stock options and uponexercise of certain outstanding warrants, as their effect isantidilutive. (2) Non-cash and merger related charges include provision for(recovery of) loss on contract, which represents the value ofcertain warrants granted in a strategic relationship, merger andintegration costs, stock compensation, acquired in-processtechnology, amortization of intangible assets and depreciationand amortization. (3) Supplemental net income and supplemental net income pershare data include a tax provision at an assumed effective rateof 38% for all periods presented. ots Original Text Service:USWeb/CKS Internet: http://www.newsaktuell.de Contact: GeoffKerr, 408-987-3260, or gkerr@uswebcks.com, or investors, KateWagner, USWeb/CKS, 408/987-3268, kwagner@uswebcks.com, both ofUSWeb/CKS Company News On-Call:http://www.prnewswire.com/comp/126755.html or fax, 800-758-5804,ext. 126755 Web site: http://www.uswebcks.com

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