CMGI Announces Preliminary Q3 Results and Updates Financial Guidance.

Business/Technology Editors

ANDOVER, Mass.--(BUSINESS WIRE)--May 21, 2002

CMGI, Inc. (Nasdaq: CMGI), a leading diversified Internet operating and development company, today reported that net revenue for the third fiscal quarter ended April 30, 2002 was approximately $188 million based on preliminary estimates, compared to $210.8 million for the second fiscal quarter of 2002.

In addition, CMGI's operating loss, excluding the effects of charges related to in-process research and development, depreciation, amortization, long-lived asset impairment and restructuring ("pro forma operating loss"), for the third quarter of 2002 was approximately $54 million based on preliminary estimates, compared to a pro forma operating loss of $42.4 million for the second quarter of 2002.

CMGI's results for the third quarter primarily reflect lower than expected operating results at the Company's uBid and Engage operating subsidiaries, as well as approximately $8 million in one-time charges related to the renegotiation and write-off of real estate lease obligations at the Company's Engage and AltaVista operating subsidiaries. uBid's results primarily reflect lower than expected revenues and gross margins during the quarter, as well as systems-related issues. In addition to the lease-related charge, Engage's results reflect a combination of a revenue shortfall and higher than expected costs during the quarter.

Commenting on today's announcement, George McMillan, CEO of CMGI, said, "We are not satisfied with the results for the third quarter. We are taking immediate and decisive actions to remedy the major contributing factors. Last week we completed the installation of a new executive management team for uBid, led by seasoned e-commerce veterans Christian Feuer and Robert Tomlinson. We expect that Christian, Bob and their team will quickly address the challenges that face uBid's business."

In a separate press release, CMGI announced today a proposal to acquire the outstanding shares of Engage not already held by CMGI.

Thomas Oberdorf, CFO of CMGI, added, "The real estate lease transactions during the quarter are examples of our continuing cost-savings efforts and the strengthening of our balance sheet."

CMGI Updates Financial Guidance

CMGI also today revised its financial outlook for the remainder of fiscal year 2002. Due to continued uncertainty in the markets for Internet products and services, CMGI's previously stated net revenue target of $205 million to $215 million and pro forma operating loss target of $22 million to $27 million for the fourth fiscal quarter of 2002 are not likely to be attained. As a result, CMGI's previously stated net revenue target of $825 million and pro forma operating loss target of $165 million to $175 million for the full fiscal year 2002 are not likely to be attained. Despite these challenges, CMGI today reaffirmed that it expects to reach break-even on a pro forma operating basis, both on a consolidated basis and for the Company's eBusiness and Fulfillment segment in the first half of fiscal 2003.

CMGI also reaffirmed that it expects to exit fiscal 2002 with a consolidated cash and cash equivalents balance in excess of $275 million, which is expected to adequately fund CMGI's operations to pro forma operating profitability and beyond. CMGI now expects consolidated cash and cash equivalents usage during the fourth quarter of fiscal 2002 to be in excess of $35 million, and decline throughout fiscal 2003.

CMGI will review final results for the third quarter on its previously scheduled earnings conference call, Tuesday, June 11, 2002, after the market close. Additional details on the company-hosted conference call will be released the week of June 3, 2002.

About CMGI and @Ventures

CMGI, Inc. (Nasdaq: CMGI), a leading diversified Internet operating and development company, is comprised of established and emerging companies, including both CMGI operating businesses and investments made through its venture capital affiliate, @Ventures. CMGI companies span a range of vertical market segments including e-business and fulfillment; enterprise software and services; and managed application services.

CMGI's majority-owned operating companies include Engage (Nasdaq: ENGA), NaviSite (Nasdaq: NAVI), AltaVista, Equilibrium, ProvisionSoft, SalesLink, Tallan, uBid and Yesmail. @Ventures has ownership interests in more than 30 companies, with a focus on identifying, investing in and developing emerging technology companies and eBusinesses.

CMGI's corporate headquarters is located at 100 Brickstone Square, Andover, MA 01810. @Ventures has offices there, as well as at 3000 Alpine Road, Menlo Park, CA 94028. For additional information, see http://www.cmgi.com and http://www.ventures.com.

This release contains forward-looking statements which address a variety of subjects including, for example, the expected financial results of CMGI and its operating companies for the remainder of fiscal 2002 and beyond, and the expected ability of CMGI to reduce its cash usage, preserve its capital resources, grow its businesses and reach profitability. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: CMGI's success, including its ability to decrease its cash burn rate, improve its cash position, grow its businesses and revenues and reach profitability, depends on its ability to operate its businesses in accordance with its business strategy and the continued and increased demand for and market acceptance of CMGI's and its operating companies' products, services, web sites and the Internet in general; CMGI may experience difficulties integrating technologies, operations and personnel in accordance with its business strategy; and increased competition and technological changes in the markets in which CMGI competes. For a detailed discussion of cautionary statements that may affect CMGI's future results of operations and financial results, please refer to CMGI's filings with the Securities and Exchange Commission, including CMGI's most recent Quarterly Report on Form 10-Q. Forward-looking statements represent management's current expectations and are inherently uncertain. We do not undertake any obligation to update forward-looking statements made by us.