INDEPENDENT AUDITORS' REPORT
The Board of Directors
We have audited the accompanying consolidated balance sheets of Lycos, Inc. as of July 31, 1998 and 1997
and the related consolidated statements of operations, stockholders' equity and cash flows for each of the years
in the three year period ended July 31, 1998. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these consolidated financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. 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 consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Lycos, Inc. at July 31, 1998 and 1997, and the results of its operations and
cash flows for each of the years in the three year period ended July 31, 1998, in conformity with generally
accepted accounting principles.
August 18, 1998, except for the restatement related to acquired in-process technology referred to in Note 1, as
to which the date is March 22, 1999.
CONSOLIDATED BALANCE SHEETS
/s/ KPMG Peat Marwick LLP
JULY 31, 1998 JULY 31, 1