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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

         (Mark One)

         [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2003

OR

         [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________to _________

Commission file number 0-20939

CNET Networks, Inc.
(Exact name of registrant as specified in its charter)

Delaware                                                     13-3696170
(State or other jurisdiction of incorporation or organization)         (I.R.S. Employer Identification No.)

235 Second Street, San Francisco, CA 94105
(Address of principal executive offices including zip code)

Telephone Number (415) 344-2000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

                                        Title of each class                                   Name of each exchange on which registered
None                                                                        None

Securities registered pursuant to Section 12(g) of the Act:

Title of class
Common Stock, $0.0001 par value

         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 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 (229.405 of this chapter) is not contained herein, and will not be contained, to the best of the 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 [X] NO [ ]

         The aggregate market value of common equity held by non-affiliates computed by reference to the price at which the stock was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter approximated $830.7 million.

         The total number of shares outstanding of the issuer’s common stock (its only class of equity securities), as of February 25, 2004 was 142,722,362.

         Information is incorporated by reference into Part III of this Form 10-K from the registrant’s definitive proxy statements for its 2003 annual meeting of stockholders, which will be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934.

PART I.

Item 1. Business

OVERVIEW

CNET Networks, Inc. is a leading global media company. Known for its editorial expertise, CNET Networks combines its award-winning content with the power of interactive technology to inform and connect buyers, users and sellers of personal technology, games and entertainment, and business technology. CNET Networks has a strong presence in the United States and in 15 countries internationally.

With an average of 66.3 million unique users per month during the fourth quarter 2003, CNET Networks has established a leadership position in the creation, management, and monetization of interactive content. Our products and services provide a platform for advertisers to create brand awareness and sell products to our targeted audiences.

CNET Networks’ portfolio of online brands encompasses three distinct content categories: personal technology, games and entertainment, and business technology. The personal technology category is anchored by top brands such as CNET.com, Download.com and Shopper.com. The games and entertainment category primarily consists of the GameSpot and MP3.com brands. MP3.com was added to the portfolio in late 2003. Industry leading brands such as ZDNet, TechRepublic, News.com and Builder.com are components of the business technology category.

We use our unbiased editorial, technical and programming expertise and our product database to provide new product information, product reviews, pricing and availability to help individuals and businesses make informed decisions across each of these content categories. We believe our content environments provide a highly relevant and targeted platform for marketers to reach consumers.

We have built scalable technology platforms that support our online properties in the U.S. across each of our content categories. The delivery of our Internet sites relies on sophisticated systems to deliver search results, content and advertising, enable commerce and create data collection and registration systems.

In addition to our Internet operations, we also have publishing operations. Our Computer Shopper magazine boasts a total average paid circulation of more than 500,000 copies per month and a total readership of more than three million per month. We also publish technology and game oriented publications in Australia, China, France, Korea, Singapore and the United Kingdom with an aggregate monthly circulation of more than 400,000 copies.

Through our CNET Channel business, we license our comprehensive product database to U.S. and European online computer retailers, resellers, wholesale distributors and e-commerce companies. CNET Channel also operates ChannelOnline, an Internet browser-based application for Value Added Resellers (VARs) that streamlines transactions through a centralized product procurement marketplace using our standardized product data.

We earn revenues from:

CNET Networks, Inc. was incorporated in the state of Delaware in December 1992. Our principal executive offices are located at 235 Second Street, San Francisco, California 94105. Our phone number is (415) 344-2000. Our periodic and current reports are available, free of charge, on our website, www.cnetnetworks.com, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.

MARKET OPPORTUNITY

The Internet has emerged as a global medium enabling millions of people to share information, communicate and conduct business electronically. The growth in Internet users combined with the interactive nature of the medium has created a powerful channel for conducting commerce. We believe that buyers of high value products, such as technology and consumer electronics products, typically research product capabilities and compare prices before making a purchase decision. The interactive nature of the Internet has caused the Internet to emerge as the medium that best allows buyers to complete that research. We feel that content sites like those created by CNET Networks, which use strong brands and original content to create rich informational environments, are effective at creating demand for products. We also believe that the identifiable brands and editorial expertise that go into creating content sites are difficult for new entrants to replicate, while providing margins that are attractive over the long-term. CNET Networks is a leader and innovator in creating focused content in the categories of personal technology, games and entertainment, and business technology which gives advertisers the ability to deliver targeted messages to buyers.

Revenues from our personal technology content categories have historically come from traditional personal technology categories, such as desktop and notebook computers. However, the definition of personal technology products has been expanding rapidly to include products such as cellular telephones, televisions, cameras, etc. This expansion is reflected in industry research. Interactive Data Corporation (IDC) expects total worldwide IT spending is expected to increase 5% to $915 billion in 2004 from $871 billion in 2003. Of that spending, IDC expects personal computer spending to increase 4% to $152 billion and peripherals, which includes many consumer electronics products such as PDA’s, are expected to increase 11% to $68 billion in 2004 as compared to 2003. The Consumer Electronics Association expects U.S. manufacturer-to-dealer sales of consumer electronics products could increase 5% to $101 billion in 2004. We expect the overall growth of consumer electronics to be an added growth opportunity for us going into 2004 as consumer adoption of these products increases. We are in a superior position to educate consumers on these new products and innovations through our editorial reviews and at the same time provide marketers with the right audience to showcase their products.

In addition, another area of opportunity for us is continued growth in our games and entertainment properties. GameSpot is well-positioned within the 18-34 male demographic and at the forefront in providing information to consumers of the $10 billion U.S. video game market (source: The NPD Group). We believe that our current games and entertainment sites, along with addition of sites such as the recently acquired MP3.com, are an attractive environment for marketers to target a highly relevant demographic.

As a leading interactive content provider, we should benefit from the expected overall increase in online advertising dollars. According to eMarketer, the U.S. online advertising market is expected to grow 13% in 2004 and represent over $7.5 billion in advertising spending. We are positioned to capture an increased share as more marketing dollars shift to online from traditional media.

PRODUCTS AND SERVICES

U.S. MEDIA

We surround the buying process with content and commerce services in the areas of personal technology, games and entertainment, and business technology. In our U.S. Media business, we derive revenue from three primary sources: marketing services; licensing, fees and users; and publishing.

Internet

Our U.S. Media Internet business includes all aspects of our U.S.-based online media brands. This business offers information and commerce services in areas of personal technology, games and entertainment, and business technology to millions of users each day. Our online content properties are the leading sources of information for people who want to learn what is new in personal technology, games and entertainment, and business technology, including what to buy, where to buy it and how to use it. This content is delivered using sophisticated and scalable technology platforms that include several key components, such as content and advertising delivery, comprehensive product and user data powering commerce services, and search functionality.

CONTENT CATEGORIES AND BRANDS

SCALABLE TECHNOLOGY PLATFORMS

Personal Technology

Our personal technology category includes sites such as CNET.com and Download.com, which enables consumers to make informed and educated technology and consumer electronics purchasing decisions. CNET.com provides expert and unbiased advice on technology and consumer electronics products and services to inform users and expedite purchasing. Through detailed reviews, recommendations and product specifications, pricing and availability information, CNET.com and Shopper.com, a price-comparison shopping site, give users one of the most up-to-date and efficient shopping resources on the Internet. Download.com is a trusted source for information for buyers and sellers of try-before-you-buy software, enabling IT professionals, developers, business users and personal technology enthusiasts to experience a hands-on evaluation of products they are considering for purchase. With millions of visitors each day and tens of thousands of content titles represented, Download.com is an established and active marketplace for digital content distribution.

Games and Entertainment

Our Internet network includes game and entertainment content sites such as GameSpot and MP3.com. GameSpot, the Internet’s most highly trafficked gaming site (complimented by GameFaqs and GameRankings.com), gives users instant access to thousands of game reviews, previews, downloads, guides, hints and news stories related to games and gaming. CNET Networks acquired the MP3.com domain and brand in December 2003. CNET plans on relaunching the MP3.com site as a comprehensive music information site in mid-2004.

Business Technology

CNET Networks’ business technology brands include leading sites such as ZDNet, News.com, TechRepublic and Builder.com, which provide business leaders and IT professionals with tools and information to make informed decisions. ZDNet operates a worldwide network of Internet sites that offer content, services and commerce opportunities that enable IT professionals and business influencers to gain an edge in business. Our business technology brands also include our award-winning news site, News.com, which focuses on the latest breaking news and in-depth coverage of industries, such as technology, games and entertainment. TechRepublic serves the needs of IT professionals, providing information and tools for IT decision support and professional advice by job function, and Builder.com provides content and services for the software developer community.

Scalable Technology Platforms

During 2001, 2002 and 2003, we invested approximately $18.4 million in the development of standardized technology platforms to deliver content and advertising, search results, enable commerce and create universal data collection and registration systems. These projects were completed in 2003. This investment has simplified our operations and creates a scalable and leveragable infrastructure. We have transitioned the majority of our U.S. operations to these new platforms.

Supporting our personal technology, games and entertainment, and business technology sites is a common content and advertising delivery platform. The creation of this technology has allowed for the ease of efficient publication of our content and effective delivery of network-wide advertising. In addition, the creation of a standardized platform has enabled us to lower our operating costs.

As part of our technology platform, we provide commerce services across our content categories, which are designed to link buyers and sellers of products and services. We help individuals and businesses decide what products to buy by providing news, reviews, recommendations, detailed product specifications, real-time prices from competing vendors, merchant ratings, product availability and shipping costs. We believe our innovative shopping services are valuable to users because they provide unbiased information and choice. These shopping services are valuable to merchants and advertisers because they provide a platform for creating brand awareness and generating sales leads.

Another important component of our technology platforms is the product data that powers these commerce services. Our product database contains over 1.5 million products and related product images, descriptions and specifications. Because consistent, comprehensive and accurate product data is important not only to our commerce services but also to every business engaged in online commerce, we have been able to leverage this data by licensing it to third parties through our Channel Services business. As we continue to see a convergence of customer relationships between U.S. Media and the Channel Service product offerings, we will evaluate combining the reporting of the results of the Channel Services segment within our U.S. Media segment in 2004.

With the integration of search functionality across our content categories, our users are provided with additional access to relevant contextual content.

Publishing

Computer Shopper magazine is a leading source of technology information and commerce services. Dedicated to helping active buyers of technology products and services, Computer Shopper magazine is a trusted, in-depth reference for expert guidance on what to buy, where to buy, and how to buy technology products and services. Although not a strategic focus, custom publishing (providing printing and distribution of marketing materials for specific customers) has contributed revenue to our publishing business over the last three years.

INTERNATIONAL MEDIA

Internet

CNET Networks provides relevant content in local language to the various markets we serve worldwide. We maintain an Internet presence in 15 countries, including wholly-owned operations in, Australia, France, Germany, Japan, Singapore and the United Kingdom, as well as a number of licensees around the world. In addition to online content, we also produce technology events. We are able to leverage CNET Networks’ online users and infrastructure internationally through our businesses, such as CNET Research, a division that provides global market intelligence information to our clients, and CNET Direct, a one-to-one marketing service for technology marketers, as well as technology events and production throughout Asia. In aggregate, our international Internet sites delivered approximately 7.7 million total page views during 2003, which represented approximately 20% of CNET Networks’ total, worldwide page views in the year ended December 31, 2003.

Publishing

We operate five technology and game oriented print publications in China with a combined circulation of over 300,000 copies per month. In Australia, France, Singapore and the United Kingdom, we publish several print publications which have a combined average monthly circulation of over 100,000 copies.

MARKETING

We design our marketing activities to promote our multiple brands and to attract users, viewers and readers to our online network and print publications. Our marketing programs include Internet and print advertising campaigns, and participation in trade shows, conferences and speaking engagements. In 2003, we spent approximately $16.0 million (which includes approximately $11.9 million in barter advertising expenses) to market our brands and services. We expect to continue to market our brands, products and services in the future.

CUSTOMERS

For the year ended December 31, 2003, there was no single customer that contributed more than 10% of our revenues. Our top one hundred advertisers contributed approximately 78%, 75% and 80% of our U.S. revenues in 2003, 2002 and 2001, respectively.

GEOGRAPHIC REGIONS

We have wholly-owned operations in Australia, France, Germany, Japan, Singapore, Switzerland and the United Kingdom. In addition, we have an international presence through majority-owned joint ventures in China and Korea. We also have license arrangements in various other countries throughout the world. Revenue is attributed to individual countries according to the international online property or print publication that generated the revenue. Non-U.S. sourced revenues accounted for 21%, 17% and 14% of net revenues during the years ended December 31, 2003, 2002 and 2001, respectively. No single foreign country accounted for more than 10% of net revenues for the year ended December 31, 2003.

EMPLOYEES

At December 31, 2003, 2002 and 2001, we had approximately 1,700, 1,800 and 2,000 employees on a worldwide basis.

INTELLECTUAL PROPERTY

Our success and ability to compete are dependent in part on the goodwill associated with our trademarks, trade names, service marks and other proprietary rights and on our ability to use U.S. and foreign laws to protect our intellectual property, which includes our original content, our editorial features, the technology that we use to deliver our products and services, the various databases of information that we maintain and make available through our Internet sites or by license, and the appearance of our Internet sites.

We have obtained federal trademark registrations for a number of our marks in the United States, including CNET, ZDNet, TechRepublic, GameSpot and Computer Shopper. U.S. trademark registrations may be renewed indefinitely based on our continued use. While we have applied for and obtained registration of many of our marks in countries outside of the U.S. where we do business, we have not been able to obtain registration of all of our key marks in such jurisdictions, in some cases due to opposition by people employing similar marks. We also claim common law protection on certain names and marks that we have used in connection with our business activities.

We rely on copyright law to protect our original content. We rely on trade secret, copyright laws, patent laws, confidentiality agreements with our employees and third parties, and protective contractual provisions to protect the proprietary technologies that we have developed. We have over 20 patent applications pending with respect to certain of our software systems, methods and related technologies, of which nine were filed in 2003. We have been issued four U.S. patents. U.S. patents have a duration of 20 years. We can offer no assurance that patents for any other applications will be granted. We cannot assure you that intellectual property laws, our agreements or our patents will be sufficient to prevent others from copying or otherwise obtaining and using our content or technologies or that others have not developed or will not develop technologies that are similar or superior to ours.

We also rely on certain technology licensed from third parties. We may be required to license additional technology in the future for use in managing our Internet sites and providing related services to users and advertising customers.

Notwithstanding the efforts that we have taken to ensure that we have sufficient rights to the intellectual property that we use, we could still be subject to claims of infringement. These claims could result in costly litigation and the need to develop alternative trademarks, content or technology or to enter into costly royalty or licensing agreements, which could have a material adverse effect on our business, results of operations and financial condition. We are a defendant in pending litigation in which a jury found that our use of the name “mySimon” infringes the trademark rights of a third party. This litigation is more fully described under Item 3 – “Legal Proceedings”.

COMPETITION

The market for Internet content and services is intensely competitive and rapidly evolving. It is not difficult to enter this market, and current and new competitors or companies from traditional media can launch new Internet sites rapidly.

We compete for advertisers, users and business partners with numerous companies offering information and content in our primary areas of focus: personal technology, games and entertainment, and business technology. These companies generally fall into the following categories:

We believe that the Internet offers a competitive advantage over other media for creating a rich and interactive environment for both users and marketers. Within the Internet, we believe that CNET’s significant experience and editorial expertise and strong brands provide us with many advantages over our competitors. However, we cannot assure you that we will compete successfully with current or future competitors. Increased competition could result in price reductions, reduced margins or loss of market share, any of which could have a material adverse effect on our future revenue and profits. If we do not compete successfully for new users and advertisers, our financial results may be materially and adversely affected.

SEASONALITY AND CYCLICALITY

We believe that marketing spending on the Internet, as in traditional media, fluctuates significantly with economic cycles and during the calendar year, with spending being weighted towards the end of the year to reflect trends in the retail industry. Our historical revenues have exhibited some degree of seasonality with higher revenues in the fourth quarter due to increased marketing spending by our customers and with lower revenues in the first quarter reflecting lower levels of marketing spending. Marketing expenditures account for a majority of our revenues. Fluctuations in marketing expenditures generally, or with respect to Internet-based marketing specifically, could therefore have a material adverse effect on our business, financial condition or operating results.

Item 2. Properties

We are headquartered in San Francisco, California, where we occupy approximately 283,000 square feet of leased office space. In addition to our San Francisco office, we have several leased offices throughout the U.S., including Cambridge, Massachusetts, Louisville, Kentucky and New York City. We also have offices in Europe, Asia and Australia.

During our realignment activities in 2001 and 2002, we abandoned several leased properties. From the time we abandoned those properties through December 31, 2003, we have been able to reach termination agreements or were able to sublease several, but not all of the properties. We currently have several properties that have been abandoned but not subleased. We have an accrued liability of $5.1 million, as of December 31, 2003, related to our abandoned properties. (Also see Footnote (10) of our consolidated financial statements included in Item 8).

Item 3. Legal Proceedings

In August 1999, Simon Property Group (SPG) filed a trademark infringement suit in federal district court in Indianapolis against mySimon, Inc. (mySimon), a subsidiary of CNET acquired on February 29, 2000. SPG alleged that the mySimon trademark infringed SPG’s “Simon” trademark. On August 31, 2000, following a trial on the subject, the jury found in favor of SPG and awarded damages against mySimon in the amount of $11.5 million in compensatory damages, $5.3 million for corrective advertising, and $10.0 million in punitive damages. On September 25, 2000, the court entered an order establishing an escrow for royalties pending final resolution of the litigation where mySimon pays into escrow 2% of its gross cash receipts each month.

On December 7, 2001, mySimon filed a motion for a dismissal of the case or, alternatively a new trial based on newly discovered evidence it believes SPG should have produced prior to the August 2000 trial. On March 26, 2003, the court granted mySimon’s motion for a new trial on all issues, thereby eliminating the original jury verdict. The court also granted mySimon’s motion that sanctions be imposed against SPG and reserved a decision about what the appropriate sanctions should be until later proceedings. No date for a new trial has been set. It is not possible to predict the amount of damages, if any, that could be awarded in a re-trial; however, such amounts could be material to our results of operations and financial condition.

Two shareholder class action lawsuits were filed in the United States District Court for the Southern District of New York on August 16, 2001 and September 26, 2001, against Ziff-Davis, Eric Hippeau and Timothy O’Brien, and investment banks that were the underwriters of the public offering of ZDNet series of Ziff-Davis stock (the ZDNet Offering). One of the complaints also names CNET as a defendant, as successor in liability to Ziff-Davis. The complaints are similar and allege violations of the Securities Act of 1933, and one of the complaints also alleges violations of the Securities Exchange Act of 1934. The complaints allege the receipt of excessive and undisclosed commissions by the underwriters in connection with the allocation of shares of common stock to certain investors in the ZDNet Offering and agreements by those investors to make additional purchases of stock in the aftermarket at pre-determined prices. Plaintiffs allege that the prospectus for the ZDNet Offering was false and misleading and in violation of the securities laws because it did not disclose the arrangements. The action seeks damages in an unspecified amount. The action is being coordinated with over 300 nearly identical actions filed against other companies and their underwriters. On February 19, 2003, the Court granted CNET’s motion to dismiss the Section 10(b) claim with leave to replead, and denied the motion to dismiss the Section 11 claim.

The majority of the issuers, including CNET, and their insurers have entered into a Memorandum of Understanding with the plaintiffs to dismiss the issuers from the litigation in exchange for a “back-stop” guarantee from the issuers and their insurers pursuant to which they will pay the plaintiffs any shortfall between $1 billion and the amounts recovered in the ongoing litigation against the underwriters. The parties are currently negotiating definitive settlement documents, which are subject to the approval of the court. Based on its insurance coverage and the number of issuers participating in the settlement, if the settlement is finalized CNET does not believe that it will face any material liability as a result of the litigation. If the settlement does not occur, CNET intends to seek indemnification from the underwriters, and it is not possible to predict whether the litigation will have a material adverse effect on CNET’s financial condition or results of operations.

There are no other legal proceedings to which we are a party, other than ordinary routine litigation incidental to our business that is not expected to be material to our business or financial condition.

Item 4. Submission of Matters to a Vote of Security Holders

None.

PART II.

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

Our common stock is traded on the National Market System of the Nasdaq Stock Market (“Nasdaq”) under the symbol “CNET”.

The following table sets forth the ranges of high and low trading prices of the common stock for the quarterly periods indicated, as reported by NASDAQ.

We have never declared or paid a cash dividend on our common stock. We intend to retain any earnings to cover operations and working capital fluctuations and to fund capital expenditures and expansion. We do not anticipate paying cash dividends on our common stock in the foreseeable future.

At February 25, 2004, the closing price for our common stock as reported by NASDAQ was $9.92, and the approximate number of holders of record of our common stock was 940.

Item 6. Selected Consolidated Financial Data

The following table sets forth selected consolidated financial data and other operating information. The financial data and operating information do not purport to indicate results of operations as of any future date or for any future period. The financial data and operating information is derived from our audited consolidated financial statements and should be read in conjunction with the consolidated financial statements, related notes and other financial information included herein.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation

Overview

CNET Networks, Inc. is a leading global media company. Known for its editorial expertise, CNET Networks combines its award-winning content with the power of interactive technology to inform and connect buyers, users and sellers of personal technology, games and entertainment, and business technology.

We have determined that our business segments are U.S. Media, International Media and Channel Services. U.S. Media consists of an online network focused on three content categories: personal technology, games and entertainment, business technology. International Media includes the delivery of online technology information and several technology and gaming print publications in non U.S. markets. Channel Services includes a product database licensing business and an online technology marketplace for resellers, distributors and manufacturers. As we continue to see a convergence of customer relationships between U.S. Media and the Channel Service product offerings, we will evaluate combining the reporting of the results of the Channel Services segment within our U.S. Media segment in 2004. Within these business segments, we earn revenues from:

We evaluate our revenues according to the classifications listed above. We classify our marketing services revenues and licensing, fee and users revenues as Internet revenues and our publishing revenues as Publishing revenues on our consolidated statements of operations. Revenues for the past three years for these categories are as follows:

We are focused on growing revenues from existing Internet properties by increasing revenues from our key customers and expanding our services where we can meet the needs of both users and marketers.

We had over 66 million unique users in the fourth quarter of 2003 as compared to 55 million unique users in the fourth quarter of 2002, an increase of 20%. Daily page views averaged 38.2 million in 2003 compared with 33.5 million in 2002, a 14% increase. While increases or decreases in unique users and daily average page views are not indicative of increases or decreases in financial results, we believe that these statistics are helpful because they provide insight into the growth of the Internet as an advertising medium resulting from increased user adoption and into user demand for CNET Networks’ properties in particular.

We evaluate our financial performance primarily on the following key measurements:

Operating expenses included in our operating income (loss) before depreciation, amortization and asset impairment consist of cost of revenues, sales and marketing and general and administrative costs, which are primarily cash related expense activities. Noncash related expenses consist of depreciation, amortization of intangible assets and asset impairment and are included in our operating income (loss).

Cost of revenues includes costs associated with the production and delivery of our Internet sites, print publications and creation of our product database and related technology. The principal elements of cost of revenues for our Internet operations are payroll and related expenses for the editorial, production and technology staff and related costs for facilities and equipment. Cost of revenues for our Publishing operations includes payroll and related expenses for editorial personnel and costs to print and distribute our magazines and related costs for facilities and equipment. The majority of our cost of revenues do not necessarily fluctuate proportionately with fluctuations in revenues.

Sales and marketing expenses consist primarily of payroll and related expenses, consulting fees and advertising expenses and related costs for facilities and equipment.

General and administrative expenses consist of payroll and related expenses for executive, finance and administrative personnel, professional fees and other general corporate expenses and related costs for facilities and equipment.

As shown in the table below, we incurred an operating loss of $20.8 million, $381.3 million and $1.9 billion for the years ended December 31, 2003, 2002 and 2001, an operating income before depreciation and amortization of $2.8 million in 2003 and an operating loss before depreciation, amortization and asset impairment of $30.4 million and $89.1 million for 2002 and 2001, respectively. Our net loss and net loss per share for each of the periods was $26.3 million, or $0.19 per share, $360.6 million, or $2.60 per share, and $2.0 billion, or $14.52 per share, respectively.