MarketScape Inc.

Company and Market Backgrounder

MarketScape is the leading provider of Hybrid Web/CD-ROM Publishing solutions. MarketScape's WebCD combines the best of the Internet and CD-ROM to help Web site owners generate more revenue while slashing print and distribution costs. Industry leaders like Microsoft, Ziff-Davis, Intel and HP are using WebCD to deploy mission critical applications in electronic marketing and electronic publishing. Founded in 1995, the company is headquartered in Colorado Springs, CO. Contact MarketScape toll free at 1-888-GO-WEBCD, phone 719-593-9890, fax 719-532-0165, email info@marketscape.com or on the World Wide Web at http://www.marketscape.com

The Hybrid Web/CD Publishing Market

The continued explosion in the adoption of the Internet by business has created a crowded medium where a company's product message and service offerings are increasingly lost in the noisy and competitive Web environment. Meanwhile, the Internet download delays frustrate end-users and strains forever-scarce network resources. The need for businesses to ensure their important and/or high-bandwidth content reaches its intended audience (whether or not they have convenient Internet access) is of high value to both users and providers of Internet information.

One solution lies in the ability for businesses to easily publish and proactively distribute "hybrid Internet applications". These applications enable corporations to combine content from their Internet/Intranet with other files that are normally inappropriate for delivery over the public Web site due to their large size or sensitive nature. A company's prospects, customers and sales teams can now run a Web site from a local CD-ROM or hard drive in the widely accepted Web browser environment, while using the Internet to conduct electronic commerce and provide real-time content updates. Delivering Net-Connected, but Net-Optional Web content by CD-ROM opens up practical, high-payback applications in Interactive Marketing (promotion, commerce and sales training) and Electronic Publishing.

Product Strategy and Offering

MarketScape has become the leading vendor of Direct Web/CD Publishing tools through its early market penetration, technical advantages and strategic relationships. MarketScape products share a common core "packaging" technology. Packaging is the process of retrieving specific Web content and adjusting hypertext links for redistribution via CD-ROM or other electronic media. This core technology enables rapid development of follow-on products.

WebCD first shipped in October 1996 and is being aggressively promoted through direct mail, PR, direct sales and distribution alliances. It is enjoying widespread market and industry acceptance. BYTE Magazine gave WebCD 5-stars and its prestigious 1997 Editor's Choice award. MarketScape continues to enhance WebCD, most recently adding built-in multimedia support so firms can combine engaging presentations with existing Web content.

MarketScape's WebCD Service Group offers the benefits of one-stop CD-ROM production, competitive prices and complete project management for the customer who is short on time or resources. The result is a high-quality WebCD, in virtually any quantity, with minimum impact on a customer's time.

The Market for WebCD

INTERACTIVE MARKETING 
WebCD is the direct marketing arm of e-commerce
The "build it and they will come" phase of Web marketing is over. The advent of data broadcasting, e-mail notification, "company-tuned" off-line browsers, intelligent agents and smart bookmarks are all aimed at providing the marketer with a better, proactive way to deliver messages. WebCD provides the benefits of proactive delivery but with a unique twist --product messages are sent via a physical media. This allows marketers to take advantage of proven direct mail, product packaging, and trade show distribution techniques to push their messages to carefully targeted audiences. And WebCD's hybrid approach breaks the Internet bandwidth barrier, letting buyers experience a rich, compelling multimedia presentation of products and services that rivals their television and video game experiences. Most importantly, WebCD is commerce enabled. A proactively delivered WebCD provides awareness and builds brand preference better than a Web site on its own, while linking to the live site for transactions. Buyers shop off-line, without the delays associated with the Internet, while seamlessly using the Internet to conduct electronic sales transactions.

ELECTRONIC PUBLISHING 
WebCD publishes documentation that is never out of date
For the first time, organizations can publish and distribute manuals, catalogs, and training materials that never fall out of date. WebCD makes this possible by using the Internet for real-time content updates. And the ability to commerce-enable publications allows innovative companies to explore cross-selling, merchandising, and upgrade opportunities. In addition, WebCD leverages the industry trend towards HTML as the preferred electronic publishing format. WebCD's use of HTML lowers content creation costs and improves usability. Here's why: 1) existing Web content can be reused; 2) investments in Web content authoring tools are leveraged; 3) documents are authored once in HTML and distributed by both the Web and CD-ROM; 4) HTML enables rich data types and is inherently cross-platform; and 5) readers embrace the familiar, standard Web browser interface. With WebCD, documentation managers slash the cost of authoring, printing, and distributing documentation while improving usability and customer satisfaction.

The Management Team

MarketScape has an experienced, proven management team. Together, they have accumulated more than 40 years of corporate and entrepreneurial experience in the high-tech industry. Former Hewlett Packard employees, three of the team members are also founding members of The Software Edge, developers of the acclaimed Defect Control System (DCS). DCS was the client/server development industry's first dedicated problem tracking system. In 1993 it received Software Development's coveted "Jolt" award for product excellence, and was nominated best in its class by readers of WinTech Magazine. In 1994, INTERSOLV (NASDAQ:ISLI) acquired The Software Edge in a deal that gave investors a 241% internal rate of return.

Bob Pinna is CEO and co-founder. Mr. Pinna has a unique ability to spot new market opportunities, formulate a vision and communicate it effectively. Prior to co-founding MarketScape, Mr. Pinna was CEO and co-founder of The Software Edge, the leader in client/server problem tracking systems. From concept to liquidity, Mr. Pinna bootstrapped this company to success. Mr. Pinna also brings extensive corporate experience to MarketScape. In eight years at Hewlett Packard, he was responsible for numerous innovations and new product concepts in the areas of network management and network test. He participated in setting Internet standards and helped form the direction for HP's OpenView network management platform. Mr. Pinna holds a Bachelor of Computer Science and a Bachelor of Applied Mathematics from the State University of New York at Stony Brook.

Richard Leavitt is VP of Sales and Marketing. Mr. Leavitt brings a wealth of sales and marketing leadership to MarketScape. Prior to joining MarketScape, Mr. Leavitt was the VP of Sales and Marketing for Requisite, Inc., a software company focusing on groupware applications. Mr. Leavitt was VP of Sales and Marketing at The Software Edge from inception until it was sold to INTERSOLV in 1994. After the merger, Mr. Leavitt became a Director of Sales at INTERSOLV until April, 1995. Earlier, he spent five years with Hewlett Packard's electronic measurement division as an "industry expert" where he defined HP's business opportunities in high-speed communications. Mr. Leavitt received a Bachelor of Science in Electrical Engineering from the University of Colorado at Boulder. Mr. Leavitt sits on the board of CADWare Alliance, a Colorado-based software start-up.

Bill Alexander is Chief Financial Officer. Mr. Alexander is a solid financial professional with a proven ability to profitably grow companies. Mr. Alexander managed the financial planning and budgeting for a $60 million Hewlett Packard division. His in-depth entrepreneurial experience includes participation as a founder in three software startups. Mr. Alexander was co-founder and Chief Financial Officer of The Software Edge. He managed the company's profitable growth, secured financing and shepherded the company for acquisition. In 1986, Mr. Alexander co-founded Macropac International which was later sold to Individual Software. In 1989, he formed Griffin Software Inc. to develop a macro package for Microsoft Word. As President of Griffin Software, Mr. Alexander negotiated an exclusive distribution agreement with Individual Software. Mr. Alexander holds a Bachelor of Arts in Economics from Stanford University and an MBA from the University of Texas.

Betsy Perkins is Vice President of Development. Ms. Perkins is a strong engineering professional with expertise in leading rapidly growing, engineering organizations to financial and market success. Her skills include building engineering infrastructures to meet the high demands of schedule pressure, as well as conforming to the quality expectations of today's software market. Ms. Perkins handled all aspects of building and managing software engineering project teams while at Hewlett-Packard and Sun Microsystems. One of Ms. Perkins past achievements was to manage the engineering team which developed GTE Main Street, an interactive cable television system. Ms. Perkins holds a Bachelor of Science degree in Computer Science from the University of Texas at Dallas.

Outside Board of Directors

Carl D. Carman has been Chairman of the Board of Symantec since January 1993. A noted venture capitalist, Mr. Carman first became a director of Symantec when he was elected to represent the Masters Fund. Mr. Carman has been a partner in Hill-Carman Ventures, a venture capital firm, since April 1989.

Jim Hebert is president and co-founder of HAHT Software, a venture-backed company that raised $6.7M from Menlo Ventures, Hummer Winblad and others. HAHT Software has been included in both the Red Herring and Upside lists of "Internet companies to watch closely".

MarketScape has all the ingredients for success: a unique, compelling position in the Internet market, an industry-endorsed product, early customer successes, a high-quality board and a proven management team ready to execute. The company is headquartered at 5475 Mark Dabling Blvd, Suite 210, Colorado Springs, CO 80918. Call toll free at 1-888-GO-WEBCD or 719-593-9890, fax 719-532-0165, email info@marketscape.com or on the World Wide Web at http://www.marketscape.com.