Jupitermedia Corporation Reports Record Results for Its Third Quarter Ended September 30, 2005

Highlights for the third quarter include:

-- Operating income before depreciation and amortization grew 124% to $10.5 million

-- Overall gross margins improved to 67%, with gross margins for Online Images improving to 70%

-- Operating margins for Online Images, excluding depreciation and amortization, grew to 43%

Revenues for the third quarter of 2005 were $34.4 million comparedto revenues of $15.8 million for the same period last year, anincrease of 118%. Net income for the third quarter was $60.4 million,or $1.62 per diluted share, compared to net income of $5.1 million, or$0.15 per diluted share, for the same period last year. Net income forthe third quarter of 2005 included a gain of $29.1 million, net ofincome taxes, related to the sale of Jupitermedia's Search EngineStrategies events and ClickZ.com Network, as well as a $23.5 millionbenefit from the reversal of the valuation allowance related todeferred income tax assets.

As a result of the sale of the Search Engine Strategies events,these financial results reflect Jupitermedia's Events segment as adiscontinued operation in accordance with Statement of FinancialAccounting Standards No. 144. Prior year financial results have beenpresented to reflect Jupitermedia's Events segment as a discontinuedoperation.

"Our financial results for the third quarter included recordrevenues, operating income and net income," stated Jupitermedia'sChairman and CEO Alan M. Meckler. "We have been emphasizing thedevelopment of our JupiterImages division and the third quarterillustrates continued organic and overall growth in the sales anddistribution of commercial images. The acquisitions of PictureArts inJuly and BananaStock in October further solidifies JupiterImages'position as a leader in stock imagery. We have made eight major imagesacquisitions since June 2003: ArtToday, Comstock, Thinkstock, Hemera,Dynamic Graphics, Goodshoot, PictureArts and BananaStock. We plan tocontinue our acquisitions program in the coming months. Our employeesare working hard to shape and integrate these acquisitions so thatJupitermedia continues to grow as a powerful creator and distributorof a wide range of commercial images. The full benefit of thisintegration will be more apparent in future quarters. In the meantimewe continue to evolve as a company making positive financial progressnot only with JupiterImages, but with our JupiterWeb andJupiterResearch divisions as well," added Meckler.

Jupitermedia Corporation 3rd Quarter 2005 Financial ResultsConference Call Alert

Jupitermedia Corporation invites you to participate in itsconference call reviewing 2005 third quarter results, scheduled forWednesday, November 2, 2005 at 11:00 am EST.

The conference call number is (800) 289-0518 for domesticparticipants and (913) 981-5532 for international participants; passcode "883 4011." Please call five minutes in advance to ensure thatyou are connected prior to the presentation. The conference callreplay will be available until Tuesday, November 15, 2005. Replay callnumbers are (888) 203-1112 for domestic participants and (719)457-0820 for international participants: pass code: "883 4011."

Acquisitions

In July, Jupitermedia acquired PictureArts Corporation(www.picturearts.com) for $63.2 million in cash, subject to certainpost-closing adjustments. The acquisition includes PictureArts'quality brands: Brand X Pictures, FoodPix, Botanica and Nonstock, aswell as its image distribution business.

In October, Jupitermedia acquired all of the shares of BananaStockLimited (www.bananastock.com) for approximately U.S. $19.0 million incash, subject to certain post-closing adjustments. BananaStock, basedin Oxfordshire, United Kingdom, is a leading resource for royalty freedigital images for business users and creative professionals.

Online Image Offerings

In July, Jupitermedia announced an agreement with Corbis(www.corbis.com), a leading media services company, to distribute itsComstock Images and Thinkstock Images collections. Under the terms ofthe agreement, Corbis started distributing select Comstock andThinkstock images worldwide through its Web site www.corbis.com inSeptember.

In August, Jupitermedia announced the launch of JupiterImagesUnlimited (www.jiunlimited.com), the first subscription service thatallows unlimited access, at multiple resolutions, to over 330,000 ofJupiterImages' highest quality wholly owned stock photos.JupiterImages' brands included in this new offering are Brand X,Comstock Images, Creatas Images, Goodshoot, IT Stock Free, ThinkstockImages, Photos.com, AbleStock.com and PhotoObjects.net.

In August, Jupitermedia announced that Adobe(R) Stock Photos, astock photography service that offers designers one-stop shopping forhigh-quality, royalty-free images for layout and design, added CreatasImages (www.creatas.com), Goodshoot (www.goodshoot.com), IT StockImages (www.itstockfree.com) and Thinkstock Images(www.thinkstock.com) to its collection. This is in addition toComstock Images (www.comstock.com), which was one of the five premiercollections that was part of Adobe(R) Stock Photos when it waslaunched with Adobe Creative Suite 2 in April.

In October, Jupitermedia announced a new image collection entitled(re)view. An archive of retro, rights-managed imagery, (re)view willlaunch in December 2005 with 4,000 select images atwww.jupiterimages.com.

In October, Jupitermedia announced an exclusive worldwidepartnership with Photographic Youth Music Culture Archive (PYMCA), arights-managed image company based in London, U.K. The PYMCAcollection is scheduled to launch in early 2006 atwww.jupiterimages.com.

Online Media Offerings

In September, Jupitermedia announced the launch of "Adobe(R)LiveCycle Developer Source" (www.devx.com/Adobe), to assistapplication development professionals in creating applications forAdobe LiveCycle(TM), a key component of the Adobe Intelligent Documentplatform.

Research Services

In September, Jupitermedia announced the appointment of Oren WebMarketing to provide research sales and support in the Israeli market.Oren Web Marketing is headed by Haim Oren. Together with his Israeliteam of experienced research sales professionals, Oren will beresponsible for providing sales and sales support to JupiterResearchmedia, telecommunications, financial and other industry clients inIsrael.

Conferences and Trade Shows

In August, Jupitermedia announced that it closed the sale of itsSearch Engine Strategies trade shows and its ClickZ.com Network of Websites for $43 million in cash, subject to certain post-closingadjustments. The purchaser is London Stock Exchange listed mediacompany Incisive Media plc (INM.L). As a result of the sale of theSearch Engine Strategies events, Jupitermedia's Events segment is nowbeing presented as a discontinued operation in accordance withStatement of Financial Accounting Standards No. 144.
Jupitermedia Corporation
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2004 and 2005
(unaudited)
(in thousands, except per share amounts)

Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2004 2005 2004 2005
-------- -------- ------- --------
Revenues $ 15,779 $ 34,351 $43,815 $ 88,493
Cost of revenues 5,377 11,478 15,479 30,973
-------- -------- ------- --------

Gross profit 10,402 22,873 28,336 57,520
-------- -------- ------- --------

Operating expenses:
Advertising, promotion and
selling 3,031 7,035 9,529 17,603
General and administrative 2,668 5,320 7,263 13,160
Depreciation 129 656 594 1,366
Amortization 360 1,239 1,477 2,944
-------- -------- ------- --------
Total operating expenses 6,188 14,250 18,863 35,073
-------- -------- ------- --------

Operating income 4,214 8,623 9,473 22,447

Gain on sale of assets, net 5 13,265 124 13,224
Interest income 55 74 82 288
Interest expense (39) (677) (101) (965)
-------- -------- ------- --------

Income before income taxes,
minority interests and equity
income (loss) from investments,
net 4,235 21,285 9,578 34,994
Provision (benefit) for income
taxes 5 (22,153) 145 (20,541)
Minority interests (20) (18) (57) (49)
Equity income (loss) from
investments, net (108) - (117) 132
-------- -------- ------- --------
Income from continuing operations 4,102 43,420 9,259 55,618
Income from discontinued
operations, net of taxes 957 1,104 946 1,488
Gain on sale of discontinued
operations, net of taxes - 15,854 - 15,854
-------- -------- ------- --------
Net income $ 5,059 $ 60,378 $10,205 $ 72,960
======== ======== ======= ========

Earnings per share:
Basic:
Continuing operations $ 0.13 $ 1.25 $ 0.33 $ 1.64
Discontinued operations 0.03 0.49 0.03 0.51
-------- -------- ------- --------
$ 0.16 $ 1.74 $ 0.36 $ 2.15
======== ======== ======= ========
Diluted:
Continuing operations $ 0.12 $ 1.16 $ 0.30 $ 1.52
Discontinued operations 0.03 0.46 0.03 0.48
-------- -------- ------- --------
$ 0.15 $ 1.62 $ 0.33 $ 2.00
======== ======== ======= ========
Shares used in computing earnings
per share:
Basic 31,382 34,749 28,448 33,936
======== ======== ======= ========
Diluted 34,141 37,323 30,815 36,401
======== ======== ======= ========

Segment Information

The following tables summarize the results of the segments ofJupitermedia for the three and nine months ended September 30, 2004and 2005. Online images consists of the JupiterImages business thatincludes Brand X, FoodPix, Botanica, Nonstock, Comstock Images,Creatas Images, PictureQuest, Liquid Library, Thinkstock Images,Thinkstock Footage, Goodshoot, Photos.com, Ablestock.com,PhotoObjects.net, Clipart.com and Animations.com. Online mediaconsists of the JupiterWeb business that includes the internet.com,EarthWeb.com, DevX.com and Graphics.com Networks. Research representsthe JupiterResearch business. Other includes corporate overhead,depreciation, amortization and venture fund related activities.
(unaudited) Three Months Ended Nine Months Ended
(in thousands) September 30, September 30,
------------------- ------------------
2004 2005 2004 2005
------- ------- ------- --------
Revenues:
Online images $ 6,797 $24,011 $15,045 55,905
Online media 6,692 7,775 21,913 24,651
Research 2,279 2,557 6,822 7,913
Other 11 8 35 24
------- ------- ------- --------
15,779 34,351 43,815 88,493
------- ------- ------- --------
Cost of revenues:
Online images 1,250 7,277 3,028 17,397
Online media 2,781 2,917 8,551 9,443
Research 1,346 1,284 3,900 4,133
------- ------- ------- --------
5,377 11,478 15,479 30,973
------- ------- ------- --------
Gross profit:
Online images 5,547 16,734 12,017 38,508
Online media 3,911 4,858 13,362 15,208
Research 933 1,273 2,922 3,780
Other 11 8 35 24
------- ------- ------- --------
10,402 22,873 28,336 57,520
------- ------- ------- --------
Advertising, promotion and
selling:
Online images 694 4,550 2,250 9,709
Online media 1,602 1,703 5,046 5,411
Research 735 782 2,233 2,483
------- ------- ------- --------
3,031 7,035 9,529 17,603
------- ------- ------- --------
General and administrative:
Online images 288 1,913 805 3,594
Online media (12) (149) 222 195
Research 104 173 478 580
Other 2,288 3,383 5,758 8,791
------- ------- ------- --------
2,668 5,320 7,263 13,160
------- ------- ------- --------

Depreciation 129 656 594 1,366
Amortization 360 1,239 1,477 2,944

Operating income:
Online images 4,565 10,271 8,962 25,205
Online media 2,321 3,304 8,094 9,602
Research 94 318 211 717
Other (2,766) (5,270) (7,794) (13,077)
------- ------- ------- --------
$ 4,214 $ 8,623 $ 9,473 $ 22,447
------- ------- ------- --------


Jupitermedia Corporation
Consolidated Balance Sheets
December 31, 2004 and September 30, 2005
(in thousands, except share and per share amounts)

December 31, September 30,
2004 2005
------------ -------------
(unaudited)
ASSETS

Current assets:
Cash and cash equivalents $ 30,179 $ 20,247
Accounts receivable, net of allowances
of $966 and $1,562, respectively 13,724 23,692
Unbilled accounts receivable 1,530 1,531
Prepaid expenses and other 2,633 4,216
Assets of discontinued operations 1,789 -
---------- ----------
Total current assets 49,855 49,686

Property and equipment, net of accumulated
depreciation of $9,256 and $10,780,
respectively 2,339 10,045
Intangible assets, net of accumulated
amortization of $5,371 and $8,309,
respectively 20,939 42,968
Goodwill 41,967 158,781
Deferred income taxes - 11,014
Investments and other assets 1,197 2,000
---------- ----------
Total assets $ 116,297 $ 274,494
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 2,060 $ 5,071
Accrued payroll and related expenses 1,666 3,115
Accrued expenses and other 4,642 13,352
Current portion of long-term debt - 10,000
Deferred revenues 12,023 15,568
Liabilities of discontinued operations 2,891 -
---------- ----------
Total current liabilities 23,282 47,106
---------- ----------

Long-term debt - 26,322
Deferred revenues 510 616
Deferred income tax liabilities 121 -
Other long-term liabilities 225 -
---------- ----------
Total liabilities 24,138 74,044
---------- ----------

Stockholders' equity:
Preferred stock, $0.01 par value,
million shares authorized, no shares
issued and outstanding - -
Common stock, $0.01 par value, shares 324 349
authorized, and 32,378,130 and
34,881,241 shares issued at December
31, 2004 and September 30, 2005,
respectively
Additional paid-in capital 215,648 251,532
Accumulated deficit (123,690) (50,730)
Treasury stock, 65,000 shares, at cost (106) (106)
Accumulated other comprehensive loss (17) (595)
---------- ----------
Total stockholders' equity 92,159 200,450
---------- ----------
Total liabilities and stockholders'
equity $ 116,297 $ 274,494
========== ==========


Jupitermedia Corporation
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2004 and 2005
(unaudited)
(in thousands)

Nine Months Ended
September 30,
--------------------
2004 2005
-------- ---------
Cash flows from operating activities:
Income from continuing operations $ 9,259 $ 55,618
Adjustments to reconcile income from continuing
operations to net cash provided by operating
activities:
Depreciation and amortization 2,071 4,310
Provision (benefit) for losses on accounts
receivable (388) (267)
Minority interests 57 49
Equity (income) loss from investments, net 117 (132)
Gain on sale of assets, net (124) (13,224)
Deferred income taxes - (24,084)
Cash flows from discontinued operations 1,075 631
Changes in current assets and liabilities (net
of businesses acquired):
Accounts receivable 2,116 (2,661)
Unbilled accounts receivable (173) (1)
Prepaid expenses and other 278 (1,105)
Accounts payable and accrued expenses (184) (1,524)
Deferred revenues 790 (587)
-------- ---------
Net cash provided by operating activities 14,894 17,023
-------- ---------

Cash flows from investing activities:
Additions to property and equipment (269) (2,316)
Acquisitions of businesses and other (27,233) (111,358)
Proceeds from sales of assets and other 191 42,940
Distribution from internet.com venture funds 148 -
-------- ---------
Net cash used in investing activities (27,163) (70,734)
-------- ---------

Cash flows from financing activities:
Proceeds from issuance of common stock, net 30,340 -
Borrowings under credit facilities 13,000 87,998
Debt issuance costs - (257)
Repayment of borrowings under credit facility (13,000) (51,677)
Proceeds from exercise of stock options 5,069 7,715
-------- ---------
Net cash provided by financing activities 35,409 43,779
-------- ---------

Net increase (decrease) in cash and cash
equivalents 23,140 (9,932)
Cash and cash equivalents, beginning of period 9,567 30,179
-------- ---------
Cash and cash equivalents, end of period $ 32,707 $ 20,247
======== =========

Supplemental disclosures of cash flow:
Cash paid for income taxes $ - $ 806
======== =========
Cash paid for interest $ 13 $ 245
======== =========

Non-cash investing activities:
Common stock issued for acquisitions $ 541 $ 21,611
======== =========

Business Outlook

Jupitermedia's financial guidance is prepared in accordance withaccounting principles generally accepted in the United States ofAmerica. Historical results below have been adjusted to conform tothis presentation. The amounts below reflect the preliminaryallocation of the purchase prices paid by Jupitermedia in connectionwith its recent acquisitions of Thinkstock Images, Megapixel.net,Hemera Technologies Inc., Creatas, L.L.C., the parent company ofDynamic Graphics, Inc., GraphicDesignForum.com, JGuru.com, GoodshootS.A.S, PictureArts Corporation and BananaStock Ltd., and are subjectto change pending a final allocation of these amounts. The followingforward looking-statements reflect Jupitermedia's expectations as ofNovember 1, 2005. Due to potential changes in general economicconditions and the various other risk factors discussed below and inJupitermedia's reports filed with the Securities and ExchangeCommission from time to time, actual results may differ materially.Jupitermedia intends to continue its practice of not updatingforward-looking statements until its next quarterly resultsannouncement, other than in publicly available statements.
Future Expectations

(In millions except for Actual Actual Actual
earnings per diluted share) Q1 2005 Q2 2005 (A) Q3 2005 (A)
(A)
--------- ----------- ------------
Revenues $ 22.3 $ 31.9 $ 34.4
Cost of revenues, advertising,
promotion & selling, and
general & administrative
expenses $ 15.4 $ 22.6 $ 23.8
EBITDA (Earnings before
interest, taxes, depreciation
and amortization) $ 6.9 $ 9.3 $ 10.6
Depreciation and amortization $ 1.1 $ 1.3 $ 1.9
Gain on sale of assets, net
(B) $ - $ - $ 13.3
Interest expense, net $ - $ 0.1 $ 0.6
Provision (benefit) for income
taxes (C) $ 0.7 $ 0.9 $(22.2)
Equity income $ - $ 0.1 $ -
Income from continuing
operations $ 5.1 $ 7.1 $ 43.4
Income (loss) from
discontinued operations, net
of taxes (A) $ 0.4 $ (0.1) $ 1.1
Gain of sale of discontinued
operations, net of taxes (B) $ - $ - $ 15.9
Net income $ 5.5 $ 7.0 $ 60.4
Diluted share count 35.7 36.8 37.3
Earnings per diluted share:
Continuing operations $ 0.15 $ 0.19 $ 1.16
Discontinued operations $ 0.01 $ - $ 0.46
Net income $ 0.16 $ 0.19 $ 1.62


Q4 2005 Total 2005 Total 2006
------------- ------------- ------------
Revenues $35.5-36.5 $124.1-125.1 $163.0-165.0
Cost of revenues, advertising,
promotion & selling, and
general & administrative
expenses $23.3-24.3 $85.1-86.1 $109.0-111.0
EBITDA (Earnings before
interest, taxes, depreciation
and amortization) $12.2 $39.0 $53.0-55.0
Depreciation and amortization $2.3 $6.6 $10.0
Gain on sale of assets, net
(B) $- $13.3 $-
Interest expense, net $0.6 $1.3 $2.0
Provision (benefit) for income
taxes (C) $3.7 $(16.9) $16.5-17.5
Equity income $- $0.1 $-
Income from continuing
operations $5.6 $61.4 $24.0-26.0
Income (loss) from
discontinued operations, net
of taxes (A) $- $1.4 $-
Gain of sale of discontinued
operations, net of taxes (B) $- $15.9 $-
Net income $5.6 $78.2-79.2 $24.0-26.0
Diluted share count 37.4 36.8 37.6
Earnings per diluted share:
Continuing operations
$0.15 $1.66-1.68 $0.64-0.69
Discontinued operations $- $0.47 $-
Net income $0.15 $2.13-2.15 $0.64-0.69

Notes:

(A) The results of our Events segment have been presented as partof discontinued operations in accordance with Statement of FinancialAccounting Standards No. 144.

(B) The total gain related to the sale of our Search EngineStrategies Events and ClickZ.com Network was $29.1 million, net ofincome taxes. The gain related to the ClickZ.com portion of the salewas recorded as part of continuing operations. The gain related to theSearch Engine Strategies Events portion of the sale was recorded netof income taxes and is included as part of our discontinuedoperations.

(C) Jupitermedia recorded a benefit for income taxes of $23.5million from the reversal of the valuation allowance related todeferred income tax assets consisting primarily of goodwill related toJupitermedia's Online Media business, which had previously beenexpensed for book purposes.

About Jupitermedia Corporation

Jupitermedia Corporation (Nasdaq: JUPM) (www.jupitermedia.com),headquartered in Darien, CT, is a leading global provider of originalinformation, images and research for information technology, businessand creative professionals. Jupitermedia includes JupiterImages, oneof the leading images companies in the world with over 7.0 millionimages online serving creative professionals with brands likeBananaStock, Brand X, FoodPix, Botanica, Nonstock, Comstock Images,Creatas Images, PictureQuest, Liquid Library, Thinkstock Images,Thinkstock Footage, Goodshoot, Photos.com, Ablestock.com,PhotoObjects.net, Clipart.com and Animations.com; and JupiterWeb, theonline media division of Jupitermedia which operates four distinctonline networks: internet.com and EarthWeb.com for IT and businessprofessionals; DevX.com for developers; and Graphics.com for creativeprofessionals. JupiterWeb properties include more than 150 Web sitesand over 150 e-mail newsletters that are viewed by over 18 millionusers and generate over 300 million page views monthly. Jupitermediaalso includes: JupiterResearch, a leading international researchadvisory organization specializing in business and technology marketresearch in 18 business areas and 14 vertical markets.

"Safe Harbor" Statement under the Private Securities LitigationReform Act of 1995: Statements in this press release which are nothistorical facts are "forward-looking statements" that are madepursuant to the safe harbor provisions of the Private SecuritiesLitigation Reform Act of 1995. Such forward-looking statements involverisks and uncertainties that could cause actual results to differmaterially from those described in the forward-looking statements. Thepotential risks and uncertainties address a variety of subjectsincluding, for example, the competitive environment in whichJupitermedia competes; the unpredictability of Jupitermedia's futurerevenues, expenses, cash flows and stock price; Jupitermedia's abilityto integrate acquired businesses, products and personnel into itsexisting businesses; Jupitermedia's dependence on a limited number ofadvertisers; and Jupitermedia's ability to protect its intellectualproperty. For a more detailed discussion of such risks anduncertainties, refer to Jupitermedia's reports filed with theSecurities and Exchange Commission pursuant to the Securities ExchangeAct of 1934. The forward-looking statements included herein are madeas of the date of this press release, and Jupitermedia assumes noobligation to update the forward-looking statements after the datehereof.

All current Jupitermedia Corporation press releases can be foundon the World Wide Web athttp://www.jupitermedia.com/corporate/press.html