<Page>

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

----------------------

FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE PERIOD ENDED SEPTEMBER 30, 2001
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: 000-26891

HOTJOBS.COM, LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 13-3931821
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

406 WEST 31ST STREET, 9TH FLOOR
NEW YORK, NEW YORK 10001

------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)

(212) 699-5300

--------------

(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

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 such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes (X) No ( )

As of October 31, 2001, there were 38,658,899 shares of the registrant's common
stock outstanding.

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HOTJOBS.COM, LTD.
TABLE OF CONTENTS

<Table>
<Caption>
PAGE NUMBER
-----------

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets as of September 30, 2001
(Unaudited) and December 31, 2000..................................... 1

Unaudited Condensed Consolidated Statements of Operations for the
Three and Nine Months Ended September 30, 2001 and 2000............... 2

Unaudited Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 2001 and 2000......................... 3

Notes to Unaudited Condensed Consolidated Financial Statements......... 5

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................. 11

Item 3. Quantitative and Qualitative Disclosures About Market Risk................ 32

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.......................................................... 33

Item 6. Exhibits and Reports on Form 8-K........................................... 33
</Table>

<Page>

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

HOTJOBS.COM, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
SEPTEMBER 30, DECEMBER 31,
2001 2000
------------- -------------
(Unaudited)

ASSETS
Current assets:
Cash and cash equivalents ............................................... $ 27,293,253 $ 50,848,905
Marketable securities ................................................... 51,707,720 48,248,750
Accounts receivable, net ................................................ 17,942,644 22,202,430
Prepaid expenses and other current assets ............................... 8,465,003 7,019,347
------------- -------------
TOTAL CURRENT ASSETS ............................................. 105,408,620 128,319,432
Property and equipment, net ................................................. 27,371,340 24,469,855
Goodwill, net ............................................................... 25,748,772 37,735,269
Other assets ................................................................ 199,703 211,328
------------- -------------
TOTAL ASSETS ..................................................... $ 158,728,435 $ 190,735,884
============= =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit .......................................................... $ 333,333 $ 333,333
Accounts payable and accrued expenses ................................... 21,101,156 32,162,821
Deferred revenue - current portion ...................................... 12,423,428 15,755,917
Other current liabilities ............................................... 2,877,794 4,003,741
Notes payable - current portion ......................................... -- 28,077
Current installments of obligations under capital leases ................ 72,992 193,799
------------- -------------
TOTAL CURRENT LIABILITIES ........................................ 36,808,703 52,477,688
Line of credit, excluding current portion ................................... 166,667 416,667
Deferred revenue, excluding current portion ................................. 803,258 1,114,014
Obligations under capital leases, excluding current installments ............ -- 22,796
------------- -------------
TOTAL LIABILITIES ................................................ 37,778,628 54,031,165

Stockholders' equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares
issued and outstanding at September 30, 2001 and December 31,
2000, respectively ...................................................... -- --
Common stock, $0.01 par value, 100,000,000 shares authorized;
38,646,574 and 36,786,865 shares issued and outstanding at
September 30, 2001 and December 31, 2000, respectively .................. 386,466 367,869
Deferred compensation ....................................................... (1,196,620) (3,649,919)
Additional paid-in capital .................................................. 226,536,442 223,527,846
Accumulated deficit ......................................................... (104,752,650) (83,549,677)
Accumulated other comprehensive (loss) gain ................................. (23,831) 8,600
------------- -------------
TOTAL STOCKHOLDERS' EQUITY ........................................ 120,949,807 136,704,719
------------- -------------
Commitments and contingencies ...............................................
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........................ $ 158,728,435 $ 190,735,884
============= =============
</Table>

See accompanying notes to unaudited condensed consolidated
financial statements.

1
<Page>

HOTJOBS.COM, LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- --------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
Revenues:

e- Recruitment .......................................................... $ 22,012,473 $ 21,682,374 $ 74,225,146 $ 49,846,626
Software ................................................................ 4,786,970 4,552,730 15,289,690 8,382,918
Career expos ............................................................ -- 1,394,331 1,101,539 4,026,193
Other ................................................................... 702,916 1,185,509 1,938,662 2,788,856
------------ ------------ ------------ ------------
Total revenues ................................................... 27,502,359 28,814,944 92,555,037 65,044,593

Cost of revenues, excludes non-cash compensation included below of $5,053
for both the three months ended September 30, 2001 and 2000 and $15,159
and $16,364 for the nine months ended September 30, 2001 and 2000,
respectively ............................................................. 4,522,138 7,387,962 17,984,104 14,916,188
------------ ------------ ------------ ------------
Gross profit ..................................................... 22,980,221 21,426,982 74,570,933 50,128,405

Operating expenses:
Product development, excludes non-cash compensation included below of
$1,444 and $61,720 for the three months ended September 30, 2001 and
2000, respectively, and $93,483 and $185,161 for the nine months ended
September 30, 2001 and 2000, respectively ............................ 1,926,807 3,756,088 7,811,695 7,614,877
Sales and marketing, excludes non-cash compensation
included below of $47,284 and $48,005 for the three months ended
September 30, 2001 and 2000, respectively, and $141,852 and $144,015
for the nine months ended September 30, 2001 and 2000, respectively .. 13,425,692 21,067,943 51,721,814 61,226,615
General and administrative, excludes non-cash
compensation included below of $174,009, and $366,601 for the three
months ended September 30, 2001 and 2000, respectively, and $668,124
and $1,032,857 for the nine months ended September 30, 2001 and 2000,
respectively ......................................................... 7,604,352 6,024,256 21,683,446 14,156,705
Non-cash compensation ................................................... 227,790 481,379 918,618 1,378,397
Amortization of goodwill ................................................ 3,995,499 4,038,260 11,986,497 6,138,862
Restructuring charges ................................................... -- -- 3,268,214 --
Merger costs ............................................................ 546,280 -- 1,331,280 --
------------ ------------ ------------ ------------
Total operating expenses ......................................... $ 27,726,420 $ 35,367,926 $ 98,721,564 $ 90,515,456
------------ ------------ ------------ ------------
Loss from operations ............................................. (4,746,199) (13,940,944) (24,150,631) (40,387,051)
Other income (expense) ..................................................... 776,100 1,826,128 2,947,658 5,478,792
------------ ------------ ------------ ------------
Net loss ......................................................... $ (3,970,099) $(12,114,816) $(21,202,973) $(34,908,259)
============ ============ ============ ============

Basic and diluted net loss per common share ................................ $ (0.10) $ (0.33) $ (0.56) $ (1.03)
============ ============ ============ ============

Weighted average shares outstanding
used in basic and diluted net loss per
common share calculation ................................................ 38,376,712 36,289,591 37,623,786 33,986,438
============ ============ ============ ============
</Table>

See accompanying notes to unaudited condensed consolidated
financial statements.

2
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HOTJOBS.COM, LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
NINE MONTHS ENDED SEPTEMBER 30,
------------------------------
2001 2000
------------- -------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ................................................................. $ (21,202,973) $ (34,908,259)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization ......................................... 19,725,517 9,408,642
Provision for doubtful accounts ....................................... 7,718,905 2,622,318
Non-cash compensation ................................................. 918,618 1,378,397
Loss on disposal of fixed assets ...................................... 48,363 --
Changes in operating assets and liabilities, net of effect of
acquisition:
Accounts receivable ................................................. (3,494,905) (12,666,649)
Prepaid expenses and other current assets ........................... (1,455,379) (1,537,415)
Accounts payable and accrued expenses ............................... (11,030,608) 14,523,883
Deferred revenue .................................................... (3,681,225) 5,128,781
Other ............................................................... (308,258) 701,847
------------- -------------
NET CASH USED IN OPERATING ACTIVITIES ........................... (12,761,945) (15,348,455)
------------- -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ..................................................... (10,670,028) (17,561,834)
Purchase of marketable securities ........................................ (132,569,127) (234,165,222)
Sale of marketable securities ............................................ 129,180,000 246,475,000
Restricted cash .......................................................... -- (1,800,000)
Proceeds from disposal of fixed assets ................................... 23,243 --
Purchase of trademark .................................................... -- (34,898)
Cash acquired on acquisition, net of cash paid ........................... -- 663,971
Note receivable .......................................................... -- (400,000)
------------- -------------
NET CASH USED IN INVESTING ACTIVITIES ........................... (14,035,912) (6,822,983)
------------- -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock for the Employee Stock Purchase Plan ..... 1,009,817 880,185
Payment of note payable .................................................. (28,077) (214,837)
Proceeds from line of credit ............................................. -- 334,828
Repayment of line of credit .............................................. (250,000) (166,667)
Proceeds from exercise of options ........................................ 2,709,868 635,659
Principal payments under capital lease obligations ....................... (143,603) (153,354)
------------- -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES ....................... 3,298,005 1,315,814
------------- -------------
EFFECT OF FOREIGN EXCHANGE RATES ON CASH .................................... (55,800) (19,637)
------------- -------------
NET DECREASE IN CASH AND CASH EQUIVALENTS ....................... (23,555,652) (20,875,261)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ............................ 50,848,905 88,372,658
------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD .................................. $ 27,293,253 $ 67,497,397
============= =============
</Table>

3
<Page>

HOTJOBS.COM, LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

<Table>
<Caption>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
2001 2000
---------------- ------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid ............................................ $ 54,017 $ 112,612
NON-CASH TRANSACTIONS:
Barter transaction ........................................ $ -- $ 25,000
Stock issued for purchase of trademark .................... $ -- $ 12,562
Issuance of common stock and assumption of Resumix
outstanding options in exchange for the capital stock of
Resumix, net of cash received and paid ................. $ -- $ 48,013,799
</Table>

See accompanying notes to unaudited condensed consolidated
financial statements.

4
<Page>

HOTJOBS.COM, LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1) DESCRIPTION OF BUSINESSS

HotJobs.com, Ltd. ("HotJobs") is a leading provider of comprehensive
recruiting solutions for employers, staffing firms and job seekers. HotJobs'
solutions include HotJobs.com, its popular consumer job board;
AgencyExchange, a business-to-business exchange for staffing firms; applicant
tracking software; HotJobs Career Expos; and online advertising. HotJobs.com
allows, for a fee, member employers access to a database of job seekers and a
back-end system that provides them with the tools to post, track and manage
job openings. HotJobs.com also allows job seekers to identify, research,
evaluate and apply to job opportunities from employers, staffing firms or
both, while enabling them to restrict access to their resumes.

The majority of HotJobs' revenues are derived from employer memberships to
HotJobs.com. HotJobs operates in a highly competitive environment and
inherent in its business are various risks and uncertainties, including its
limited operating history and unproven business model and the timing and cost
of the consummation of its transaction with TMP Worldwide, Inc. ("TMP"), as
well as the risk of non-consummation. HotJobs' success may depend in part
upon the emergence of the Internet as a recruiting medium, prospective
product and service development efforts and the acceptance of its products
and services by the marketplace.

HotJobs was incorporated in Delaware on February 20, 1997 (inception) as Hot
Jobs, Inc. On September 23, 1998, Hot Jobs, Inc. changed its name to
HotJobs.com, Ltd. On May 11, 2000, HotJobs acquired Resumix, Inc. ("Resumix")
pursuant to which Resumix became a wholly owned subsidiary of HotJobs. On
June 29, 2001, HotJobs entered into a merger agreement with TMP. The
transaction is subject to the approval of HotJobs' stockholders, regulatory
approval and other customary closing conditions.

2) BASIS OF PRESENTATION

The unaudited interim condensed consolidated financial statements of HotJobs
as of September 30, 2001 and for the three months and nine months ended
September 30, 2001 and 2000, included herein have been prepared in
accordance with the instructions for Form 10-Q under the Securities Exchange
Act of 1934, as amended, and Article 10 of Regulation S-X under the
Securities Act of 1933, as amended. Certain information and note disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations relating to interim consolidated
financial statements.

In the opinion of management, the accompanying unaudited interim condensed
consolidated financial statements reflect all adjustments, consisting only
of normal recurring adjustments, necessary to present fairly the financial
position of HotJobs at September 30, 2001 and the results of its operations
for the three and nine months ended September 30, 2001 and 2000 and its cash
flows for the nine months ended September 30, 2001 and 2000.

The results of operations for such periods are not necessarily indicative of
results expected for the full year or for any future period. These condensed
consolidated financial statements should be read in conjunction with the
audited consolidated financial statements as of December 31, 2000 and the
three years then ended and related notes included in HotJobs' Form 10-K
filed with the Securities and Exchange Commission on March 30, 2001. Certain
reclassifications have been made to the 2000 financial statements to conform
to the current year presentation.

3) DEFINITIVE MERGER AGREEMENT

5
<Page>

HotJobs expects the transaction to close either in the fourth quarter of
2001 or the first quarter of 2002. The Boards of Directors of both companies
have approved the transaction, which is expected to be tax-free to the
shareholders of both companies. The merger is subject to the approval of
HotJobs' shareholders, regulatory approval and other customary closing
conditions.

The transaction is being accounted for as a pooling-of-interests under U.S.
generally accepted accounting principles.

4) ACQUISITION OF RESUMIX, INC.

On May 11, 2000, HotJobs acquired Resumix in a merger in which a wholly
owned subsidiary of HotJobs was merged with and into Resumix, with the
result that Resumix is now a wholly owned subsidiary of HotJobs.

In connection with the acquisition and in exchange for 100% of the
outstanding capital stock of Resumix, HotJobs issued 3,560,019 shares of its
common stock, of which 359,282 of these shares were held in escrow until May
11, 2001, and were subsequently released, and paid a total of $392,456 in
cash to certain non-accredited investors of Resumix. In addition, HotJobs
assumed Resumix's existing stock option plans, resulting at the time in the
potential additional issuance of approximately 1.1 million shares of
HotJobs' common stock upon the exercise of these options. The total purchase
price for the acquisition, including approximately $1.8 million of
acquisition expenses, was approximately $45.6 million. The excess of the
purchase price over the fair value of the assets acquired of approximately
$47.9 million has been recorded as goodwill and is being amortized on a
straight-line basis over three years.

Resumix is based in Sunnyvale, CA and has developed Artificial Intelligence
search capabilities for its recruiting software products. The acquisition
has been accounted for by the purchase method and, accordingly, the results
of operations of Resumix have been included in HotJobs' consolidated
financial statements from May 11, 2000.

The following unaudited pro forma financial information for the nine months
ended September 30, 2001 and 2000 presents the combined results of
operations of HotJobs and Resumix as if the acquisition had occurred as of
the beginning of the respective periods, after giving effect to certain
adjustments, including the amortization of goodwill. The pro forma financial
information does not necessarily reflect the results of operations that
would have occurred had HotJobs and Resumix each constituted a single entity
during such periods.

UNAUDITED PRO FORMA FINANCIAL INFORMATION
-----------------------------------------
(In Millions Except Per Share Amounts)

NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------
2001 2000
----------- -----------

Revenues................................................... $ 92.6 $ 71.9
====== ======

Net loss................................................... $(21.2) $(44.6)
====== ======

Basic and diluted net loss per common share................ $ (0.56) $ (1.25)
======= =======

Weighted average shares outstanding used in
basic and diluted net loss per common share................ 37.6 35.7
==== ====
</Table>

6
<Page>

5) RECENT ACCOUNTING PRONOUNCEMENTS

a) On July 20, 2001, the Financial Accounting Standards Board ("FASB")
issued Statement No. 141, "BUSINESS COMBINATIONS" and Statement No. 142,
"GOODWILL AND OTHER INTANGIBLE ASSETS." Statement 141 requires that the
purchase method of accounting be used for all business combinations
initiated after June 30, 2001, as well as all purchase method business
combinations completed after June 30, 2001. Statement 141 also specifies
criteria that intangible assets acquired in a purchase method business
combination must meet in order to be recognized and reported apart from
goodwill, noting that any purchase price allocable to an assembled workforce
may not be accounted for separately. Statement 142 will require that
goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead tested for impairment at least annually in accordance
with the provisions of Statement 142. Statement 142 will also require that
intangible assets with definite useful lives be amortized over their
respective estimated useful lives to their estimated residual values, and
reviewed for impairment in accordance with SFAS No. 121, "ACCOUNTING FOR THE
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED
OF."

HotJobs is required to adopt the provisions of Statement 141 immediately,
except with regard to business combinations initiated prior to July 1, 2001,
which it expects to account for using the pooling-of-interests method, and
Statement 142 effective January 1, 2002. Furthermore, any goodwill and any
intangible asset that is acquired in a purchase business combination
completed after September 30, 2001 and determined to have an indefinite
useful life will not be amortized, but will continue to be evaluated for
impairment in accordance with the appropriate pre-Statement 142 accounting
literature. Goodwill and intangible assets acquired in business combinations
completed before July 1, 2001 will continue to be amortized in accordance
with the guidelines in effect prior to the adoption of Statement 142.

Upon adoption of Statement 142, Statement 141 will require that HotJobs
evaluate its existing goodwill that was acquired in a prior purchase
business combination and make any necessary reclassifications in order to
conform with the new criteria in Statement 141 for recognition apart from
goodwill. Upon adoption of Statement 142, HotJobs will be required to
reassess the useful lives and residual values of all intangible assets
acquired in purchase business combinations and make any necessary
amortization period adjustments by the end of the first interim period after
adoption. In addition, to the extent an intangible asset is identified as
having an indefinite useful life, HotJobs will be required to test the
intangible asset for impairment in accordance with the provisions of
Statement 142 within the first interim period. Any impairment loss will be
measured as of the date of adoption and recognized as the cumulative effect
of a change in accounting principle in the first interim period.

In connection with the transitional goodwill impairment evaluation,
Statement 142 will require HotJobs to perform an assessment of whether there
is an indication that goodwill is impaired as of the date of adoption. To
accomplish this, HotJobs must identify its reporting units and determine the
carrying value of each reporting unit by assigning the assets and
liabilities, including the existing goodwill and intangible assets, to those
reporting units as of the date of adoption. HotJobs will then have up to six
months from the date of adoption to determine the fair value of each
reporting unit and compare it to the reporting unit's carrying amount. To
the extent a reporting unit's carrying amount exceeds its fair value, an
indication exists that the reporting unit's goodwill may be impaired, and
HotJobs must then perform the second step of the transitional impairment
test. In the second step, HotJobs must compare the implied fair value of the
reporting unit's goodwill, determined by allocating the reporting unit's
fair value to all of it assets and liabilities in a manner similar to a
purchase price allocation in accordance with Statement 141, to its carrying
amount, both of which would be measured as of the date of adoption. This
second step is required to be completed as soon as possible, but no later
than the end of the year of adoption. Any transitional impairment loss will
be recognized as the cumulative effect of a change in accounting principle
in HotJobs' Statements of Operations.

As of the date of adoption, HotJobs expects to have unamortized goodwill in
the amount of approximately $21.8 million which will be subject to the
transition provisions of Statements 141 and 142. Amortization expense
related to goodwill was approximately $10.2 million and approximately $12.0
million for the year ended December 31, 2000 and the nine months ended
September 30, 2001, respectively. Because of the extensive effort needed to
comply with adopting Statements 141 and 142, it is not practicable to
reasonably estimate the impact of adopting these Statements on HotJobs'
financial statements at the date of this Report, including

7
<Page>

whether any transitional impairment losses will be required to be recognized
as the cumulative effect of a change in accounting principle.

b) HotJobs adopted SFAS No. 133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND
HEDGING ACTIVITIES," as amended by SFAS No. 137, effective January 1, 2001.
SFAS No. 133 establishes accounting and reporting standards for derivative
instruments, including derivative instruments embedded in other contracts,
and for hedging activities. The adoption of SFAS No. 133 had no impact on
HotJobs' financial statements, as HotJobs currently does not use derivative
instruments.

6) BUSINESS SEGMENT REPORTING

Effective July 1, 2001, HotJobs changed the composition of its reportable
segments. Prior to July 1, 2001, HotJobs was organized as a single business
segment for making operating decisions and assessing performance. Beginning
July 1, 2001, HotJobs is reporting two segments, namely, e-Recruitment
and Software. Segment information is only available for periods, which
commenced January 1, 2001, as systems were not in place prior to January 1,
2001 to capture this information. The All Other category primarily includes
revenues from banner advertising and career expos and the expenses
associated with providing these services, as well as corporate overhead
expenses, restructuring charges, and non-cash compensation expense.

SEGMENT INFORMATION
-------------------
(In Millions)

For The Three Months Ended September 30, 2001
--------------------------------------------------------------------------
e-RECRUITMENT SOFTWARE ALL OTHER TOTAL

Revenues $ 22.0 $ 4.8 $ 0.7 $ 27.5
============= ======== ========= ========

Operating Income (Loss) $ 4.0 $ (3.2)(a) $ (5.5) $ (4.7)
============= ======== =========

Other Income (Expense) 0.7
--------

Net Loss $ (4.0)
========
<Caption>

For The Nine Months Ended September 30, 2001
--------------------------------------------------------------------------
e-RECRUITMENT SOFTWARE ALL OTHER TOTAL

Revenues $ 74.2 $ 15.3 $ 3.1 $ 92.6
============= ======== ========= ========

Operating Income (Loss) $ 10.9 $ (11.1)(a) $ (23.9) $ (24.1)
============= ======== =========

Other Income (Expense) 2.9
--------

Net Loss $ (21.2)
========
<Caption>

As of September 30, 2001
--------------------------------------------------------------------------
e-RECRUITMENT SOFTWARE ALL OTHER TOTAL

Total Assets $ 52.0 $ 31.1(a) $ 75.6(b) $ 158.7
============= ======== ========= ========
</Table>

(a) Includes amortization of goodwill of $4.0 and $12.0 for the three and nine
months ended September 30, 2001, respectively, and a goodwill balance of $25.7
as of September 30, 2001.

(b) Includes corporate cash, cash equivalents and marketable securities of
$74.3.

8
<Page>

7) NON-CASH COMPENSATION

In connection with the granting of options in 1999, HotJobs recorded net
deferred compensation of approximately $7.5 million. For financial reporting
purposes, the deferred compensation is being amortized as non-cash
compensation over the vesting period of the related options. Accordingly,
HotJobs amortized $227,790 and $481,379 of deferred compensation as non-cash
compensation for the three month periods ended September 30, 2001 and 2000,
respectively, and $918,618 and $1,378,397 for the nine month periods ended
September 30, 2001 and 2000, respectively. The deferred compensation
remaining at September 30, 2001 of approximately $1.2 million will be
amortized as non-cash compensation as the related options vest.

8) RESTRUCTURING CHARGES

In the nine months ended September 30, 2001, HotJobs recorded charges of
$3,268,214 relating to the restructuring of its operations. The charges
consisted of $2,936,214 associated with a reduction in HotJobs' workforce,
which included approximately $842,000 of non-cash compensation expense
related to the acceleration of the vesting of options of certain terminated
employees, and $332,000 associated with the closing of certain offices. As
of September 30, 2001, substantially all of these charges have been
incurred.

9) EMPLOYEE STOCK PURCHASE PLAN

Under the HotJobs Employee Stock Purchase Plan (the "ESPP"), which became
effective on August 10, 1999, participating employees could purchase shares
of HotJobs common stock through periodic payroll deductions at 85% of its
fair market value on the employee's entry date into the offering period or
the end of an offering period, whichever was lower. The ESPP is designed to
comply with the requirements of Section 423 of the Internal Revenue Code.

The plan has a series of successive offering periods, each with a maximum
duration of 24 months. The initial offering period began on August 10, 1999
and ended on the last business day in July 2001. As a result of the
agreement to merge with TMP, a new purchase period did not begin after the
July 31, 2001 purchase date. The maximum number of shares of HotJobs common
stock available for sale under the ESPP is 250,000 shares, plus an automatic
annual increase on the first trading day of each calendar year of the lesser
of 500,000 shares, or an amount equal to one percent (1%) of the total
number of shares of common stock outstanding on the last trading day of the
immediately preceding calendar year.

On January 31, 2000, the first purchase date under the plan, employees
purchased 58,718 shares of HotJobs common stock for $399,282, or $6.80 per
share. On July 31, 2000, employees purchased 62,434 shares of HotJobs common
stock for $480,903, or an average of $7.70 per share. On January 31, 2001,
employees purchased 62,138 shares of HotJobs common stock for $518,698, or
an average of $8.35 per share. On July 31, 2001, employees purchased an
aggregate of 62,418 shares of HotJobs common stock for $491,119, or an
average of $7.87 per share.

10) COMMITMENTS AND CONTINGENCIES

In January 2001, HotJobs entered into a five-year lease agreement in Coral
Gables, Florida with total minimum lease payments of $791,560. In March
2001, HotJobs entered into a five-year lease agreement in Washington, D.C.
with total minimum lease payments of $880,034. As of September 30, 2001,
HotJobs has approximately $16.0 million of office lease commitments.

As of September 30, 2001, HotJobs has commitments of approximately $7.7
million for various advertising campaigns through January 2003, including
broadcasting, print, online and outdoor advertising.

11) BASIC AND DILUTED NET LOSS PER COMMON SHARE

HotJobs computes net loss per share in accordance with SFAS No. 128,
"COMPUTATION OF EARNINGS PER SHARE," and the SEC Staff Accounting Bulletin
No. 98 ("SAB 98"). Under the provisions of SFAS No. 128 and SAB 98, basic
net loss per share is computed by dividing the net loss available to common
shareholders for the

9
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period by the weighted average number of common shares outstanding during
the period. Diluted net loss per share is computed by dividing the net loss
for the period by the weighted average number of common and common
equivalent shares outstanding during the period. As HotJobs had a net loss
in each of the periods presented, basic and diluted net loss per share is
the same. Diluted net loss per share for the three and nine months ended
September 30, 2001 and 2000 does not include the effects of options to
purchase shares of common stock, as the effect of their inclusion is
anti-dilutive during each period.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The information in this Report contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such statements are
based upon current expectations, assumptions, estimates and projections about
HotJobs and our industry. These forward-looking statements are subject to the
many risks and uncertainties that exist in our operations and business
environment that may cause actual results, performance or achievements of
HotJobs to be different from those expected or anticipated in the
forward-looking statements. Any statements contained herein that are not
statements of historical fact may be deemed to be forward-looking statements.
For example, words such as "may", "will", "should", "estimates", "predicts",
"potential", "continue", "strategy", "believes", "anticipates", "plans",
"expects", "intends", and similar expressions are intended to identify
forward-looking statements. HotJobs' actual results and the timing of certain
events could differ significantly from those anticipated in such forward-looking
statements. Factors that might cause or contribute to such a discrepancy
include, but are not limited to, those discussed elsewhere in this Report in the
section entitled "Risk Factors" and the risks discussed in our other Securities
and Exchange Commission ("SEC") filings. The forward-looking statements included
in this Report reflect the beliefs of our management on the date of this Report.
HotJobs undertakes no obligation to update publicly any forward-looking
statements for any reason, even if new information becomes available or other
events or circumstances occur in the future.

HotJobs is a leading provider of comprehensive recruiting solutions for
employers, staffing firms and job seekers. Our solutions include HotJobs.com,
our popular consumer job board; AgencyExchange, a business-to-business exchange
for staffing firms; applicant tracking software; HotJobs Career Expos; and
online advertising. The majority of our revenues are derived from employer
memberships to HotJobs.com.

Our revenues are classified as follows:

o e-RECRUITMENT FEES, consisting of subscription fees paid by employers for
membership to HotJobs.com and by staffing firms for membership to
AgencyExchange, as well as fees derived from single-ad job postings on
HotJobs.com. We sell memberships to HotJobs.com and AgencyExchange on a
per-recruiter basis for the Resume Search and Professional Desktops and
on a per-job basis for the Job Post Desktop. We bill the employer or
staffing firm monthly, quarterly, semi-annually or annually. We recognize
subscription revenue over the subscription term. Single-ad job postings
are billed when service is provided. We recognize revenue from single-ad
job postings over the period of delivery of service.

o SOFTWARE FEES, consisting mainly of license, maintenance and hosting fees
generated from our software customers. We recognize software license fees
for our client/server software upon the delivery of the software, and we
recognize license fees for our hosted ASP software ratably over the
four-year estimated useful life of the software, in accordance with
Statements of Position 97-2 and 98-9 issued by the American Institute of
Certified Public Accountants and Staff Accounting Bulletin No. 101 issued
by the SEC. We provide maintenance and hosting services to our customers
on a monthly basis, and we recognize revenues over the period of delivery
of service.

o CAREER EXPOS FEES, consisting of fees from employers that rent booths at,
and purchase sponsorships of, our HotJobs Career Expos. We recognize
HotJobs Career Expos fees in the month in which the HotJobs Career Expo
takes place.

o OTHER, consisting of fees primarily derived from banner and co-operative
advertising. We recognize revenues related to these services over the
period of delivery of service. In addition, prior to its discontinuation,
the strategic consulting business was formerly included in this category.

We classify our cost of revenues and operating expenses as follows:

o COST OF REVENUES. Cost of revenues primarily consists of compensation and
other costs associated with the operation of our online exchanges as well
as costs incurred to provide maintenance, hosting and training services
for our software products and costs associated with operating our HotJobs
Career Expos.

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o PRODUCT DEVELOPMENT EXPENSE. Product development expense consists
primarily of costs associated with the compensation of product
development personnel. Our product development expense constitutes all of
our research and development expenditures.

o SALES AND MARKETING EXPENSE. Sales and marketing expense consists
primarily of advertising and promotional expenses, sales and marketing
compensation, including base salary and sales commissions, public
relations expenses, conference expenses, printing fees and telemarketing
communications expenses. Sales commissions have remained relatively
constant as a percentage of revenues. However, the timing and magnitude
of marketing initiatives have caused, and will continue to cause,
fluctuations in sales and marketing expense as a percentage of revenues.

o GENERAL AND ADMINISTRATIVE EXPENSE. General and administrative expense
consists primarily of compensation for administrative and executive
staff, fees for professional services, bad debt expense and general
office expense.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, our results of
operations expressed as a percentage of total revenues:

<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
2001 2000 2001 2000
---- ---- ---- ----

Revenues:
e-Recruitment fees .............................................. 80% 75% 80% 77%
Software fees ................................................... 17 16 17 13
Career expo fees ................................................ -- 5 1 6
Other ........................................................... 3 4 2 4
---- ---- ---- ----
Total revenues ............................................... 100 100 100 100
Cost of revenues ................................................ 16 26 19 23
---- ---- ---- ----
Gross profit ................................................. 84 74 81 77

Operating expenses:
Product development ............................................. 7 13 9 12
Sales and marketing ............................................. 49 73 56 94
General and administrative ...................................... 28 21 23 22
Non-cash compensation ........................................... 1 2 1 2
Amortization of goodwill ........................................ 14 14 13 9
Restructuring charges ........................................... -- -- 4 --
Merger costs .................................................... 2 -- 1 --
---- ---- ---- ----
Total operating expenses ...................................... 101 123 107 139
---- ---- ---- ----
Loss from operations ..................................... (17) (49) (26) (62)
Other income (expense) ............................................. 3 7 3 8
---- ---- ---- ----
Net loss ............................................ (14)% (42)% (23)% (54)%
==== ==== ==== ====
</Table>

We have incurred losses in every fiscal period since our inception. For the nine
months ended September 30, 2001, we incurred a net loss of approximately $21.2
million. As of September 30, 2001, we had an accumulated deficit of
approximately $104.8 million. Our net loss and resulting accumulated deficit are
primarily due to the costs we incurred to develop our online employment
exchanges and software products as well as to expand our sales and marketing
programs, and the amortization of goodwill relating to the acquisition of
Resumix.

We intend to devote resources to advertising and brand-marketing programs
designed to attract new employers to subscribe to, and new job seekers to use,
HotJobs.com, as well as to attract staffing firms to subscribe to
AgencyExchange. As of September 30, 2001, we had commitments of approximately
$7.7 million for various

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<Page>

advertising campaigns through January 2003. These commitments include
broadcasting, print, online and outdoor advertising.

We expect to incur additional losses for the remainder of 2001, including the
amortization of goodwill relating to Resumix. To the extent that increases in
our operating expenses precede and are not subsequently followed by commensurate
increases in revenue or we are unable to adjust operating expense levels
accordingly, our operating losses may exceed our expectations for 2001. We
cannot be sure we will ever achieve or sustain profitability other than on a pro
forma basis, if at all.

Our strategy contemplates that revenue from employer memberships to HotJobs.com
will likely be the single largest source of revenue for us in the immediate
future.

DEFERRED COMPENSATION

We amortized approximately $228,000 and approximately $481,000 for the three
months ended September 30, 2001 and 2000, respectively, and approximately
$919,000 and approximately $1.4 million for the nine months ended September 30,
2001 and 2000, respectively, of deferred compensation as non-cash compensation
expense. For the nine months ended September 30, 2001, we recorded approximately
$842,000 of deferred compensation as restructuring charges as a result of the
acceleration of the vesting of options of certain terminated employees. Deferred
compensation and additional paid-in-capital were both reduced by approximately
$692,000 and approximately $46,000 for the nine months ended September 30, 2001
and 2000, respectively, as a result of the forfeitures of options due to
employees leaving HotJobs prior to vesting in all of their options. Deferred
compensation represents the difference between the exercise price of stock
options granted and the fair value of the underlying common stock at the date of
grant. The remaining deferred compensation at September 30, 2001 of
approximately $1.2 million will be amortized over the remaining vesting period
of the options. Based on the current remaining vesting period of outstanding
options, the remaining deferred compensation would be amortized as follows:

FOR THE PERIOD:

October through December 2001........................ $227,000
Full Year 2002....................................... $714,000
Full Year 2003....................................... $256,000

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

REVENUES

Our total revenues decreased to approximately $27.5 million for the three months
ended September 30, 2001 from approximately $28.8 million for the three months
ended September 30, 2000. Our total revenues increased to approximately $92.6
million for the nine months ended September 30, 2001, from approximately $65.0
million for the nine months ended September 30, 2000. The decrease in our total
revenues for the three months ended September 30, 2001 versus the three months
ended September 30, 2000 was primarily due to the absence of revenues from
career expos in the three months ended September 30, 2001. The increase in our
total revenues for the nine months ended September 30, 2001 versus the nine
months ended September 30, 2000 was due to increased revenues in the
e-Recruitment and software categories, which was partially offset by a decrease
in career expos revenues and other revenues.

e-RECRUITMENT FEES. e-Recruitment fees increased to approximately $22.0 million
for the three months ended September 30, 2001, from approximately $21.7 million
for the three months ended September 30, 2000, and to approximately $74.2
million for the nine months ended September 30, 2001, from approximately $49.8
million for the nine months ended September 30, 2000. The increase in
e-Recruitment fees for the three months ended September 30, 2001 versus the
three months ended September 30, 2000 resulted primarily from the introduction
of AgencyExchange in 2001, which was partially offset by fewer single ad
postings. The increase in e-Recruitment fees for the nine months ended September
30, 2001 compared to the nine months ended September 30, 2001 resulted

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<Page>

primarily from an increase in the number of employers subscribing to
HotJobs.com during the period, as well as the introduction of AgencyExchange
in 2001, which was partially offset by fewer single ad postings.

SOFTWARE FEES. Software fees increased to approximately $4.8 million for the
three months ended September 30, 2001, from approximately $4.6 million for the
three months ended September 30, 2000, and to approximately $15.3 million for
the nine months ended September 30, 2001, from approximately $8.4 million for
the nine months ended September 30, 2000. The increase in software fees for both
periods resulted primarily from the increased revenue generated by Resumix. The
nine months ended September 30, 2001 included Resumix revenues for the entire
period presented, whereas the nine months ended September 30, 2000 only included
Resumix revenues from May 11, 2000, the date we acquired Resumix.

CAREER EXPOS FEES. We recorded no revenues from career expos for the three
months ended September 30, 2001, as compared to recorded revenues of
approximately $1.4 million for the three months ended September 30, 2000, and
recorded revenues from career expos decreased to approximately $1.1 million
for the nine months ended September 30, 2001, from approximately $4.0 million
for the nine months ended September 30, 2000. No career expos revenues were
recorded in the three months ended September 30, 2001, as career expos were
suspended during the quarter for the remainder of the year due to the current
economic climate. The decrease in career expos fees for the nine months ended
September 30, 2001 compared to the nine months ended September 30, 2000 also
resulted from a decrease in the number of exhibitors at HotJobs Career Expos
held in the 2001 versus 2000.

OTHER. Other revenues decreased to approximately $703,000 for the three months
ended September 30, 2001, from approximately $1.2 million for the three months
ended September 30, 2000, and to approximately $1.9 million for the nine months
ended September 30, 2001, from approximately $2.8 million for the nine months
ended September 30, 2000. Other revenues decreased primarily as a result of
lower co-operative advertising revenues.

COST OF REVENUES

Cost of revenues decreased to approximately $4.5 million for the three months
ended September 30, 2001, from approximately $7.4 million for the three months
ended September 30, 2000. For the nine months ended September 30, 2001, cost of
revenues increased to approximately $18.0 million, from approximately $14.9
million for the nine months ended September 30, 2000. Cost of revenues as a
percentage of total revenues for the three months ended September 30, 2001 and
2000 were 16% and 26%, respectively. For both the nine months ended September
30, 2001 and September 30, 2000, cost of revenues as a percentage of total
revenues were 19% and 23%, respectively. The decrease in cost of revenues as a
percentage of total revenues in the three and nine months ended September 30,
2001 compared to September 30, 2000 primarily resulted from the reclassification
of costs related to account managers from cost of goods sold to sales and
marketing, as well as the absence of cost of revenues for career expos in the
three months ended September 30, 2001. The implementation, in the second quarter
of 2001, of HotJobs' new customer relationship management system ("CRMS") in
part provided HotJobs' account managers the tools to proactively sell to
customers. Expenses relating to the account managers are now included in sales
and marketing rather than cost of revenues as the account managers'
functionality has shifted to a selling function with the implementation of CRMS.
We incur higher marginal costs on revenues from career expos than with our other
revenue categories. In addition, the nine months ended September 30, 2001
included the client/server software business for the entire period, whereas
the nine months ended September 30, 2000 only included the client/server
software business from May 11, 2000, the date we acquired Resumix. We incur
higher marginal costs on revenues from our client/server software business
than our e-Recruitment and other revenue categories.

OPERATING EXPENSES

PRODUCT DEVELOPMENT EXPENSE. Product development expense decreased to
approximately $1.9 million for the three months ended September 30, 2001, from
approximately $3.8 million for the three months ended September 30, 2000. For
the nine months ended September 30, 2001, product development expense was
approximately $7.8 million, compared to approximately $7.6 million for the nine
months ended September 30, 2000. The decrease in product development expense for
the three months ended September 30, 2001 compared to the same period of 2000
primarily reflects a lower number of employees and the capitalization of costs
related to certain products that have been developed and have reached technical
feasibility but have yet to be marketed. The increase in product development
expense for the nine months ended September 30, 2001 compared to the same period
in 2000 primarily reflects the inclusion of client/server product development
costs for all of the nine months ended September 30,

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<Page>

2001 while for the nine months ended September 30, 2000 costs were only included
from May 11, 2000, the date we acquired Resumix.

SALES AND MARKETING EXPENSE. Sales and marketing expense decreased to
approximately $13.4 million for the three months ended September 30, 2001, from
approximately $21.1 million for the three months ended September 30, 2000. Sales
and marketing expense decreased to approximately $51.7 million for the nine
months ended September 30, 2001, from approximately $61.2 million for the nine
months ended September 30, 2000. The decrease in sales and marketing expense in
both periods was due to lower advertising spending that was partially offset by
additional sales personnel and the reclassification, effective April 1, 2001, of
costs related to account managers to sales and marketing from cost of revenues.

GENERAL AND ADMINISTRATIVE EXPENSE. General and administrative expense increased
to approximately $7.6 million for the three months ended September 30, 2001,
from approximately $6.0 million for the three months ended September 30, 2000.
For the nine months ended September 30, 2001, general and administrative expense
increased to approximately $21.7 million, from approximately $14.2 million for
the nine months ended September 30, 2000. General and administrative expense
increased in both periods primarily due to increased bad debt expense, which
reflects in part the write off of certain aged receivables in the 2001 period,
as well as increased facilities expenses as a result of new offices opened. In
addition, the nine months ended September 30, 2001 included general and
administrative expenses from Resumix for the entire period, whereas the nine
months ended September 30, 2000 only included general and administrative
expenses from Resumix from May 11, 2000, the date we acquired Resumix.

NON-CASH COMPENSATION EXPENSE. We recorded approximately $228,000 and $919,000
of non-cash compensation expense for the three and nine months ended September
30, 2001, respectively, compared to approximately $481,000 and $1.4 million for
the three and nine months ended September 30, 2000, respectively. For accounting
purposes, non-cash compensation expense represents the amortization of a portion
of the deferred compensation, net of options forfeited, recorded in 1999 in
connection with stock options granted below the fair value of the underlying
common stock at the date of grant. Deferred compensation is amortized over the
period during which the related options vest. The deferred compensation of
approximately $1.2 million remaining at September 30, 2001 will be amortized
over the remaining vesting period of the related options.

AMORTIZATION OF GOODWILL. The amortization of goodwill of approximately $4.0
million for each of the three months ended September 30, 2001 and 2000, and
approximately $12.0 million and $6.1 million for the nine months ended September
30, 2001 and 2000, respectively, represents the amortization of the goodwill
related to the Resumix acquisition. The total goodwill of approximately $47.9
million, which resulted from the acquisition of Resumix, is being amortized on a
straight-line basis over three years.

RESTRUCTURING CHARGES. We recorded restructuring charges of approximately $3.3
million for the nine months ended September 30, 2001 for costs related to a
reduction in our workforce, which included approximately $842,000 of non-cash
compensation relating to the acceleration of the vesting of options of certain
terminated employees, and the closing of certain offices.

MERGER COSTS. We incurred merger costs of approximately $546,000 and
approximately $1.3 million for the three months and the nine months ended
September 30, 2001, respectively, relating to our announced merger with TMP. The
costs incurred were for financial advisors, lawyers, accountants and a six-year
tail on our directors and officers insurance policy.

OTHER INCOME (EXPENSE)

For the three months ended September 30, 2001, we recorded other income
(expense) of approximately $776,000, compared to approximately $1.8 million
for the three months ended September 30, 2000. Other income (expense) was
approximately $2.9 million for the nine months ended September 30, 2001,
compared to approximately $5.5 million for the nine months ended September
30, 2000. Other income (expense) in both the three and nine months ended
September 30, 2001 and September 30, 2000 primarily reflects the interest
income earned on the investment of our excess cash and marketable securities.
Interest income decreased in both periods due to lower levels of excess cash
and marketable securities and lower interest rates during each period.

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<Page>

NET LOSS

We recorded a net loss of approximately $4.0 million for the three months ended
September 30, 2001, compared to a net loss of approximately $12.1 million for
the three months ended September 30, 2000. For the three months ended September
30, 2001 and 2000, the basic and diluted net loss per common share was $0.10 and
$0.33, respectively. For the nine months ended September 30, 2001 and 2000, the
net loss was approximately $21.2 million and $34.9 million, respectively, or a
basic and diluted net loss per common share of $0.56 and $1.03, respectively.
The decrease in the net loss for the three months ended September 30, 2001
compared to the three months ended September 30, 2000 was primarily attributable
to lower advertising expenses. The decrease in the net loss for the nine months
ended September 30, 2001 compared to the nine months ended September 30, 2000
reflects increased revenues along with the lower advertising expenses, which
were partially offset by increased bad debt expense that reflects, in part,
the write off of certain aged receivables in the 2001 period.

LIQUIDITY AND CAPITAL RESOURCES

HotJobs believes that cash, cash equivalents and marketable securities on hand
of approximately $79.0 million as of September 30, 2001 will be sufficient to
meet our funding needs for at least the next twelve months.

Net cash used in operating activities was approximately $12.8 million for the
nine months ended September 30, 2001, and approximately $15.3 million for the
nine months ended September 30, 2000. Net cash used in operating activities for
the nine months ended September 30, 2001 primarily resulted from our net loss,
decreases in accounts payable and accrued expenses and deferred revenue, and an
increase in accounts receivable, which were partially offset by depreciation and
amortization and the provision for doubtful accounts. Net cash used in operating
activities for the nine months ended September 30, 2000 mainly resulted from the
net loss and an increase in accounts receivable, which were partially offset by
increases in accounts payable and accrued expenses as well as deferred revenue,
depreciation and amortization and the provision for doubtful accounts.

Net cash used in investing activities was approximately $14.0 million for the
nine months ended September 30, 2001, compared to approximately $6.8 million for
the nine months ended September 30, 2000. Net cash used in investing activities
in the nine months ended September 30, 2001 was primarily for the purchase of
marketable securities of approximately $132.6 million and for capital
expenditures of approximately $10.7 million, which were partially offset by
proceeds of approximately $129.2 million from the sale of marketable securities.
For the nine months ended September 30, 2000, the net cash used in investing
activities was mainly for the purchase of marketable securities of approximately
$234.2 million and for capital expenditures of approximately $17.6 million,
which were partially offset by the sale of marketable securities of
approximately $246.5 million.

Net cash provided by financing activities was approximately $3.3 million for the
nine months ended September 30, 2001, and approximately $1.3 million for the
nine months ended September 30, 2000. Net cash provided by financing activities
for the nine months ended September 30, 2001 consisted primarily of proceeds of
approximately $2.7 million from the exercise of stock options and approximately
$1.0 million from the issuance of stock under the Employee Stock Purchase Plan,
which were partially offset by $250,000 of repayment of the line of credit. For
the nine months ended September 30, 2000, net cash provided by financing
activities resulted mainly from approximately $880,000 from the issuance of
stock under the Employee Stock Purchase Plan, proceeds of approximately $636,000
from the exercise of stock options and proceeds of approximately $335,000 from
the utilization of a line of credit, which were partially offset by the
repayment of approximately $215,000 of a note payable and approximately $167,000
of a line of credit.

As of September 30, 2001, we had approximately $27.3 million of cash and cash
equivalents and approximately $51.7 million of marketable securities. As of
September 30, 2001, principal commitments consisted of approximately $7.7
million for various advertising campaigns through January 2003 and approximately
$16.0 million of office lease commitments through December 2009. We believe that
our existing cash, cash equivalents and marketable securities will be sufficient
to meet our anticipated cash requirements for working capital and capital
expenditures for at least the next 12 months. Our capital requirements will
depend on a number of factors, including market acceptance of our products and
services, the amount of our resources that we devote to our products and
services and our operations and the amount of our resources we devote to
promoting awareness of the HotJobs

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<Page>

brand. In addition, we will continue to evaluate possible investments in
businesses, products and technologies, the consummation of any of which would
increase our capital expenditures.

We have entered into a merger agreement with TMP, which we anticipate
consummating during either the fourth quarter of 2001 or the first quarter of
2002. We currently believe that we have sufficient capital resources to meet our
anticipated working capital and capital expenditure requirements on a standalone
basis beyond the next 12 months. If we were to continue on a standalone basis,
unanticipated events and opportunities could require us to sell additional
equity or debt securities, increase our current line of credit or establish new
credit facilities to raise capital in order to meet our capital requirements,
most of which we cannot currently do without TMP's consent under the terms of
the merger agreement. If we were to sell additional equity or convertible debt
securities, the sale could dilute the ownership of our existing stockholders. If
we were to issue debt securities, increase our credit facility or establish a
new credit facility, our fixed obligations could increase and result in
operating covenants that would restrict our operations. We cannot be sure that
any such financing will be available at all or on terms acceptable to us.

OTHER EVENTS

On June 29, 2001, HotJobs entered into an agreement to merge with TMP, the
parent company of Monster.com. Under the terms of the agreement, each share of
HotJobs common stock outstanding will be exchanged for 0.2195 shares of TMP
common stock. In addition, outstanding HotJobs options will be converted into
TMP options. HotJobs expects the transaction to close in the fourth quarter of
2001 or the first quarter of 2002. The Boards of Directors of both companies
have approved the transaction, which is expected to be tax-free to the
shareholders of both companies. The merger is subject to the approval of
HotJobs' shareholders, regulatory approval and other customary closing
conditions. The transaction is being accounted for as a-pooling-of-interests
under U.S. generally accepted accounting principles.

On August 13, 2001, TMP and HotJobs received a Request for Additional
Information and Documentary Materials (a "Second Request") from the Federal
Trade Commission ("FTC"). The waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, applicable to the merger is
tolled until both TMP and HotJobs substantially comply with the Second Request.
Upon substantial compliance, TMP and HotJobs must observe a 30 calendar day
(extended to the next business day if the 30th day falls on a weekend or federal
holiday) waiting period before closing the transaction. The FTC cannot, without
the parties' consent, extend the waiting period beyond the 30-day period. During
this 30-day waiting period, the FTC can seek a temporary restraining order and
preliminary injunction from a federal district court to prevent the consummation
of the transaction. The FTC can also initiate an administrative hearing at the
FTC seeking to permanently enjoin consummation of the transaction. The FTC may,
in its discretion, grant early termination with respect to the Second Request or
end the litigation process at any time and allow the parties to close.

On October 23, 2001, TMP filed a Registration Statement on Form S-4 with the
Securities and Exchange Commission to register shares of TMP common stock to be
issued in the proposed merger.

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<Page>

RISK FACTORS

AN INVESTMENT IN HOTJOBS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CONSIDER
CAREFULLY THE FOLLOWING INFORMATION ABOUT THESE RISKS, TOGETHER WITH THE OTHER
INFORMATION CONTAINED IN THIS REPORT, BEFORE DECIDING WHETHER TO INVEST IN
SHARES OF OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR
BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS WOULD LIKELY SUFFER. IN
THIS CASE, THE MARKET PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU COULD
LOSE ALL OR PART OF YOUR INVESTMENT.

OUR MERGER WITH TMP IS SUBJECT TO A NUMBER OF CONDITIONS, INCLUDING APPROVAL OF
HOTJOBS' SHAREHOLDERS AND REGULATORY APPROVAL. ADDITIONALLY, EACH OF TMP AND
HOTJOBS MAY TERMINATE THE MERGER AGREEMENT UNDER SPECIFIED CIRCUMSTANCES. WHILE
WE INTEND TO WORK WITH TMP TO COMPLETE THE TRANSACTION PROMPTLY, THERE CAN BE NO
ASSURANCE THAT THE MERGER WILL BE CONSUMMATED. IF THE MERGER IS NOT CONSUMMATED,
THIS COULD HAVE AN ADVERSE EFFECT ON OUR STOCK PRICE AND ON OUR BUSINESS
GENERALLY. IF OUR MERGER WITH TMP IS CONSUMMATED, HOTJOBS WILL BECOME A WHOLLY
OWNED SUBSIDIARY OF TMP, AND SHARES OF HOTJOBS COMMON STOCK WILL BE EXCHANGED
FOR SHARES OF TMP COMMON STOCK. AS HOLDERS OF TMP COMMON STOCK, FORMER HOTJOBS
SHAREHOLDERS WILL BE SUBJECT TO THE RISKS INHERENT IN OWNERSHIP OF TMP COMMON
STOCK, WHICH MAY BE DIFFERENT FROM THE RISKS ASSOCIATED WITH OWNERSHIP OF
HOTJOBS COMMON STOCK. IF THE MERGER IS NOT CONSUMMATED, THE RISKS ASSOCIATED
WITH OWNERSHIP OF HOTJOBS COMMON STOCK SET FORTH BELOW WILL CONTINUE TO APPLY.

THE RISKS SET FORTH IN THE REMAINDER OF THIS SECTION RELATE TO HOTJOBS ON A
STANDALONE BASIS.

RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL

OUR LIMITED OPERATING HISTORY MAKES EVALUATING AN INVESTMENT IN HOTJOBS
DIFFICULT.

We were incorporated and began generating revenues in February 1997.
Accordingly, we have only a limited operating history for you to evaluate our
business and prospects. We face risks and uncertainties relating to our ability
to successfully implement our strategy. You must consider the risks, expenses,
difficulties and uncertainties that a company in a new and rapidly evolving
market like ours faces. Some of these risks include:

o ability to sustain historical revenue growth rates;

o ability to implement our business model and strategy and adapt and modify
them as needed;

o ability to increase awareness of our brand;

o managing our operations, including the integration of acquisitions;

o competition;

o attracting, retaining and motivating qualified personnel;

o maintaining our current, and developing new, strategic relationships;

o ability to anticipate and adapt to the changing Internet market and any
changes in government regulation; and

o attracting and retaining a large number of member employers, staffing firms
and job seekers for our exchanges and licensees for our hiring management
software.

We also depend on the growing use of the Internet for recruiting purposes and on
general economic conditions. If we cannot address these risks and uncertainties
or are unable to execute our strategy, we may not be successful and current
evaluations of our business and prospects may prove to be inaccurate.

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WE FACE TECHNICAL, OPERATIONAL AND STRATEGIC CHALLENGES THAT MAY PREVENT US FROM
SUCCESSFULLY INTEGRATING RESUMIX AND HOTJOBS.

Our acquisition of Resumix involves risks related to the integration and
management of acquired technology, operations and personnel. The integration of
HotJobs and Resumix has been and will continue to be a complex, time-consuming
and expensive process and may disrupt our business if not completed in a timely
and efficient manner. We may not be able to integrate our systems and operate
effectively as a combined organization.

We have in the past and may in the future encounter substantial difficulties,
costs and delays in integrating the Resumix operations, including:

o incompatibility of business cultures and operations;

o potential loss of customers;

o difficulty of incorporating acquired technology into our products and
services;

o potential conflicts in distribution, marketing or other important
relationships;

o difficulty maintaining uniform standards, controls, procedure and
policies;

o the loss of key employees; and

o the potential disruption of HotJobs' core business and the diversion
of management's attention from ongoing business concerns.

In addition, although a legal and financial analysis of Resumix was performed
before we purchased Resumix, it is possible that the analysis did not uncover
every risk inherent in acquiring the business of another company.

WE HAVE NOT BEEN PROFITABLE, AND WE EXPECT OUR LOSSES TO CONTINUE.

We have never been profitable other than on a pro forma basis. For the nine
months ended September 30, 2001, we incurred a net loss of approximately $21.2
million. As of September 30, 2001, we had an accumulated deficit of
approximately $104.8 million. In connection with our acquisition of Resumix, the
three-year amortization of related goodwill will be a charge to our operating
results through December 2001 and subsequently will be periodically reviewed for
impairment. We cannot assure you that we will achieve sufficient revenues to
achieve or sustain profitability other than on a pro forma basis, if at all. Our
ability to be profitable depends on our ability to generate and maintain greater
revenues while incurring reasonable expenses. If our revenues fall below our
expectations, or if our spending levels exceed our expectations or cannot be
adjusted downward, we may not generate sufficient revenues to achieve or sustain
profitability. We achieved profitability on a pro forma basis in the second and
third quarters of 2001, but we cannot assure you that we can sustain this on a
quarterly or annual basis in the future. Our inability to achieve or maintain
profitability or positive cash flow could result in disappointing financial
results, impede implementation of our growth strategy or cause the market price
of our common stock to decrease.

YOU SHOULD NOT RELY ON OUR QUARTERLY OPERATING RESULTS AS AN INDICATION OF OUR
FUTURE RESULTS BECAUSE THEY ARE SUBJECT TO SIGNIFICANT FLUCTUATIONS.
FLUCTUATIONS IN OUR OPERATING RESULTS OR THE FAILURE OF OUR OPERATING RESULTS TO
MEET THE EXPECTATIONS OF PUBLIC MARKET ANALYSTS AND INVESTORS MAY NEGATIVELY
IMPACT OUR STOCK PRICE.

Our quarterly operating results may fluctuate significantly in the future due to
a variety of factors that could affect our revenues or our expenses in any
particular quarter. Fluctuations in our quarterly operating results could cause
our stock price to decline.

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You should not rely on quarter-to-quarter comparisons of our results of
operations as an indication of future performance. Factors that may affect our
quarterly results include:

o mismatches between resource allocation and demand due to difficulties in
predicting demand in new markets;

o changes in our pricing policies or those of our competitors;

o the demand for and acceptance of our Website, products, product
enhancements and services;

o the hiring cycles of employers;

o the timing, amount and mix of subscription, license and service payments;

o the timing and integration of acquisitions;

o changes in general economic conditions, such as recessions, that could
affect recruiting efforts generally and online recruiting efforts in
particular;

o the magnitude and timing of marketing initiatives;

o the maintenance and development of our strategic relationships;

o the introduction, development, timing, competitive pricing and market
acceptance of our products and services and those of our competitors;

o the attraction and retention of key personnel;

o our ability to manage our anticipated growth and expansion;

o our ability to attract and retain customers;

o our ability to attract qualified job seekers; and

o technical difficulties or system downtime affecting the Internet generally
or the operation of our products and services specifically.

As a result of the factors listed above and because the online recruiting
industry is new and it is difficult to predict consumer demand, it is possible
that in some future periods our results of operations may be below the
expectations of public market analysts and investors. This could cause our stock
price to decline. If revenues fall below our expectations in any quarter and we
are unable to quickly reduce our spending in response, our operating results
would be lower than expected and our stock price could fall.

OUR BUSINESS MODEL IS UNPROVEN AND MAY NOT BE ADAPTABLE TO A CHANGING MARKET.

If we are not able to anticipate changes in the recruiting market or if our
business model is not successful, we may not be able to expand our business or
to successfully compete with other companies, which could have a material
adverse effect on our business, results of operations and financial condition.
Our current business model depends to a significant extent on revenue from
employers and staffing firms using our online exchanges and hosting and
maintenance fees associated with our hiring management software.

Our revenue model and profit potential are unproven. If current customers decide
to discontinue any of our services and we are unable to replace them with new
customers, our revenues could fall below our expectations. It is possible that
we will be required to further adapt our business model in response to
additional changes in the recruiting market or if our current business model is
not successful.

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THIS YEAR, WE MADE CHANGES WHICH MAY DECREASE THE NUMBER OF JOB OPPORTUNITIES
AND MEMBER EMPLOYERS AND MAY RESULT IN DECREASED OR LESS PREDICTABLE REVENUE
STREAMS.

In February 2001, we began to offer fixed price packages based on length of
commitment and usage. Customers may purchase a package that allows them to post
jobs on HotJobs.com, search the resume database, or both. It is possible that we
will make additional pricing changes in the future. Because we made this change
recently, we cannot fully assess the impact of the change on our ability to
generate revenue or the success of the change. We do not know whether potential
customers will accept our pricing model. In addition, in June 2001 we entered
into an agreement to merge with TMP. Due to the announcement of the proposed
transaction with TMP, it is possible that certain customers, vendors and
employees of HotJobs may terminate their relationship with HotJobs. In
addition, it is possible that potential customers will determine not to do
business with a company that has agreed to be acquired.

As a result of these changes, the number of job opportunities posted on
HotJobs.com may decrease. In the event the number of job opportunities in our
database materially decreases, job seekers may find that HotJobs.com is not
as useful as other online recruiting sites. A decrease in the number of job
seekers on our Website may cause a further reduction in the number of job
opportunities posted or additional services purchased. Job seekers may not
post their resumes on HotJobs.com, which would reduce the number of employers
willing to pay to access our resume database. These changes may reduce our
revenue.

In addition, customers that sign up for fixed-term commitments have no
obligation to purchase any of our service offerings after their commitment
period expires, and customers that have "good-until-canceled" contracts can
cancel their membership within the specified notice period. As a result, a
customer that generates substantial revenue for us in a particular month may not
do so in a later month. We must continually maintain existing accounts and
establish and develop new accounts with customers. If we fail to do so, our
revenue could fluctuate, which may cause us to fail to meet expectations in the
marketplace and our stock price could decline.

WE MAY NOT BE ABLE TO OBTAIN SUFFICIENT FUNDS TO GROW OUR BUSINESS AND ANY
ADDITIONAL FINANCING MAY BE ON TERMS ADVERSE TO THE INTERESTS OF OUR
STOCKHOLDERS.

Based on our current operating plan, we anticipate that our available funds will
be sufficient to satisfy our anticipated needs for working capital, capital
expenditures and business expansion on a standalone basis for at least the next
12 months. After that time, or in the event that we do not meet our operating
plan, we may need additional capital. We may need to raise additional funds in
order to fund our anticipated growth and brand and product development or for
the acquisition of complementary businesses, technologies and services to the
extent we continue to operate on a standalone basis. Obtaining additional
financing will be subject to a number of factors including:

o market and economic conditions;

o our financial condition and operating performance; and

o investor sentiment.

These factors may make the timing, amount, terms and conditions of additional
financing unattractive for us. If we are able to raise additional funds and we
do so by issuing equity or convertible debt securities, holders of our common
stock may experience significant dilution of their ownership interest and
holders of these securities may have rights, preferences or privileges senior to
those of the holders of our common stock. If we obtain additional financing by
issuing debt securities or establishing a new credit facility, the terms of such
securities or credit facility could restrict or prevent us from paying dividends
and could limit our flexibility in making business decisions.

If additional financing is not available when required or on acceptable terms,
we may be unable to fund our growth, successfully develop our brand and
products, take advantage of business opportunities or respond to competitive

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pressures, any of which could have a material adverse effect on our business.

ECONOMIC FLUCTUATIONS MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS,
RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

Online recruiting is a relatively new industry, and we do not know how sensitive
we are to general economic conditions. The level of economic activity and
employment in the United States and abroad may significantly and adversely
affect demand for our services. When economic activity slows, many companies
hire fewer permanent employees, and some companies engage in hiring freezes. A
recession could cause employers to reduce or postpone their recruiting efforts
generally, and their online recruiting efforts in particular. Therefore, a
significant economic downturn or recession, especially in regions or industries
where our operations are heavily concentrated, could have a material adverse
effect on our business, financial condition and operating results. Further, we
may face increased pricing pressures during such periods. There can be no
assurance that during these periods our results of operations will not be
adversely affected.

RISKS RELATED TO OUR MARKETS AND STRATEGY

WE MAY NOT BE ABLE TO DEVELOP AWARENESS OF OUR BRAND NAME.

We believe that continuing to build and maintain awareness of our brand name is
critical to achieving widespread acceptance of our business and to sustain or
increase the number of companies and job seekers who use our products and
services. Brand recognition is a key-differentiating factor among providers of
recruiting services, and we believe it could become more important as
competition in the recruiting market increases. In order to maintain and build
brand awareness, we must succeed in our marketing efforts, provide high quality
services and increase the number of high quality job seekers using HotJobs.com.
If we fail to successfully protect, promote, position and maintain our HotJobs
brand name, incur significant expenses in promoting our brand and fail to
generate a corresponding increase in revenue as a result of our branding
efforts, or encounter legal obstacles which prevent our continued use of our
brand name, our business, results of operations and financial condition could be
materially adversely affected.

WE MAY NOT BE ABLE TO SUCCESSFULLY INTRODUCE NEW OR ENHANCED PRODUCTS AND
SERVICES.

The failure of any new or enhanced products and services to achieve market
acceptance and generate revenue could result in a material adverse effect on our
revenues. In connection with the Resumix acquisition, we acquired several
products that are being offered separately and that are also being integrated
into our existing products and services. We may experience difficulty in
marketing these products in conjunction with our products and services and
integrating these products with our existing product and service offerings. We
have recently introduced, and we expect to continue to introduce enhanced
products and services in order to generate additional revenues, attract and
retain more customers, attract more job seekers to our Website and respond to
competition. Any current or new or enhanced product or service we offer or
introduce, including any new Internet-based service or Resumix product, that is
not favorably received could damage our reputation and the perception of our
brand name. In addition, any of these new products may contain design flaws or
other defects that could require extensive modifications or require us to issue
refunds to our customers. If we are required to bear significant expense as a
result of product modifications or refunds or lose future business as a result
of customer dissatisfaction, our results of operations could be materially
adversely affected.

WE MAY LOSE BUSINESS IF WE FAIL TO KEEP PACE WITH RAPIDLY CHANGING
TECHNOLOGIES AND CUSTOMER NEEDS. To remain competitive, we must continually
improve the responsiveness, functionality and features of our products and
services and develop other products and services that are attractive to job
seekers and our customers. If we are unable to timely and successfully develop
and introduce or acquire new services, products and enhancements to existing
products and services in response to our industry's changing technological
requirements, our revenues could be materially adversely affected. In addition,
our current technology may not meet the future technical requirements of
employers or staffing firms. Trends that could have a critical impact on our
success include:

o rapidly changing technology in online recruiting;

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o evolving industry standards, including both formal and DE FACTO standards
relating to online recruiting;

o developments and changes relating to the Internet;

o evolving government regulations;

o competing products and services that offer increased functionality; and

o changes in employer, staffing firm and job seeker requirements.

WE MAY LOSE JOB SEEKERS IF OUR WEBSITE CONTENT IS NOT ATTRACTIVE TO
THEM. Our future growth depends in part on our ability to attract job seekers
who are qualified for the jobs posted by our customers. This in turn depends in
part on our ability to deliver original and compelling content to these job
seekers. We cannot assure you that our content will be attractive to Internet
users. We also cannot assure you that we will be able to anticipate, monitor and
successfully respond to rapidly changing consumer tastes and preferences to
continue to attract a sufficient number of Internet users to our Website.
Internet users can freely navigate and instantly switch among a large number of
Websites. In addition, many other Websites offer very specific, highly targeted
content. These sites could have greater appeal than our Website to particular
groups within our target audience.

OUR BUSINESS AND GROWTH WILL SUFFER IF WE ARE UNABLE TO HIRE AND RETAIN HIGHLY
SKILLED PERSONNEL.

If we are unable to hire and retain highly skilled personnel, our growth may be
restricted, and the quality of our products and services and our revenues may be
reduced. Our future success depends on our ability to attract, train, motivate
and retain highly skilled employees. We have experienced and expect that we will
continue to experience attrition. In addition, due to the recent decline in our
stock price, the options that we have granted to many of our employees do not
have any current value and will not have any value unless our stock price
increases significantly. Competition for highly skilled employees is intense.
We may be unable to retain our skilled employees or attract, assimilate and
retain other highly skilled employees in the future. We have from time to
time in the past experienced, and we may experience in the future, difficulty
in hiring and retaining highly skilled employees with appropriate
qualifications.

WE MAY NOT BE ABLE TO EFFECTIVELY MANAGE OUR OPERATIONS.

In order to execute our business plan, we must continue to increase our
revenues. If we are not able to manage our operations in an efficient manner,
our expenses could grow disproportionately to revenues or our revenues could
decline, either of which could have a material adverse effect on our business,
results of operations and financial condition.

We have recently experienced a period of rapid growth that has placed
considerable demands on our managerial, operational, financial and information
system resources. Our growth has resulted in increased responsibility for both
existing and new management personnel. Our growth has placed, and any future
growth will continue to place, a significant strain on our management,
operations, systems and resources. We expect that we will need to continue to
improve our financial and managerial controls and reporting systems and
procedures, and will need to continue to train and manage our workforce.

Our success depends to a significant extent on the ability of our executive
officers and other members of senior management to operate effectively both
independently and as a group and on our ability to successfully integrate
Resumix with and into our company. At the end of February 2001, Richard S.
Johnson resigned from the positions of Chief Executive Officer and President. In
connection with Mr. Johnson's resignation, Dimitri J. Boylan became our acting
President and Chief Executive Officer, and he became our President and Chief
Executive Officer on June 29, 2001. Our future success depends significantly on
the ability of Mr. Boylan to successfully assume the duties of Chief Executive
Officer and to effectively work with other members of our senior management.

We will also need to continue to maintain close coordination among our products
and technology, finance and administration and sales and marketing
organizations. We cannot assure you that management will be effective in
attracting and retaining additional qualified personnel, expanding our physical
facilities, integrating acquired

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businesses or otherwise managing growth.

We cannot assure you that our information or telecommunications systems,
procedures or controls will be adequate to support our operations or that our
management will be able to successfully offer our products and services and
implement our business plan. Our future performance may also depend on our
effective integration of additional acquired businesses. Any such integration,
even if successful, may take a significant period of time and expense, and may
place a significant strain on our resources. If we are not able to manage
existing or anticipated growth, our business, results of operations and
financial condition could be materially adversely affected.

INTENSE COMPETITION MAY RENDER OUR SERVICES AND PRODUCTS UNCOMPETITIVE OR
OBSOLETE.

The market for recruiting solutions is intensely competitive and highly
fragmented. The online participants face competition from traditional recruiting
services and other online providers. We expect competition to continue to
increase because there are no substantial barriers to entry into our industry.
We believe that our ability to compete depends upon many factors both within and
beyond our control, including the following:

o the timing and market acceptance of new solutions and enhancements to
existing solutions developed either by us or our competitors;

o the strength and reputation of the HotJobs brand;

o our customer service and support efforts;

o our sales and marketing efforts; and

o the ease of use, performance, price and reliability of solutions developed
either by us or our competitors.

We compete with companies that offer a single database job board solution or
other online recruiting services, as well as newspapers, magazines and other
traditional media companies. We also compete with large Internet information
hubs or portals, recruiting software companies and career expo companies. In
addition, we compete with companies that provide a combination of some or all of
these offerings. We may experience competition from potential customers to the
extent that they develop their own online recruiting offerings internally. In
addition, we compete with traditional recruiting services, such as staffing
firms, for a share of employers' total recruiting budgets. We expect to face
additional competition as other established and emerging companies, including
print media companies and staffing firms with established brands, develop online
recruiting products.

Many of our current and potential competitors have longer operating histories,
significantly greater financial, technical, marketing and other resources and
larger customer bases than we do. These factors may allow them to respond more
quickly than we can to new or emerging technologies and changes in customer
requirements. It may also allow them to devote greater resources than we can to
the development, promotion and sale of their products and services. These
competitors may also engage in more extensive research and development,
undertake more far-reaching marketing campaigns, adopt more aggressive pricing
policies and make more attractive offers to existing and potential employees and
strategic partners. We cannot assure you that our competitors will not develop
or acquire products or services that are equal or superior to our solutions or
that achieve greater market acceptance than our solutions. In addition, current
and potential competitors are making and are expected to continue to make
strategic acquisitions or establish cooperative, and, in some cases, exclusive
relationships with significant companies or competitors to expand their
businesses or to offer more comprehensive solutions.

We are also subject to the risk that our current and potential customers may
perceive our competitors' products or services to be superior to or more
dependable than ours for reasons beyond our control. For example, we believe
that our customers and potential customers closely follow the reports of
third-party companies that attempt to measure the popularity of Websites within
the online recruiting industry. If such a measuring firm were to alter its
methodology for assessing the popularity of Websites in a way that caused our
Website to appear relatively less popular than our competitors', we could lose
current and potential customers. In addition, due to the difficult economic and
financial conditions faced by Internet-oriented companies generally, potential
customers may elect not to purchase our products or services but rather to
obtain the services of one of our larger, better financed and

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better diversified competitors.

We believe that there will be rapid business consolidation in the online
recruiting industry. In recent months, several of our competitors have either
completed or announced acquisitions, and we announced on June 29, 2001 that we
entered into an agreement to be acquired by TMP. Accordingly, new competitors
may emerge and rapidly acquire significant market share. In addition, new
technologies will likely increase the competitive pressures that we face. The
development or acquisition of competing technologies by market participants or
the emergence of new industry standards may adversely affect our revenues and
ultimately our competitive position.

Due to competition, we may experience reduced margins on our products and
services, loss of market share or less use of HotJobs.com by job seekers and our
customers. If we are not able to compete effectively with current or future
competitors as a result of these and other factors, our revenues could be
materially adversely affected.

THE INTERNET IS NOT A PROVEN RECRUITING MEDIUM.

If we are unable to compete with traditional recruiting and job seeking methods,
our revenues could be reduced. The future of our business is dependent on the
acceptance by job seekers, employers and staffing firms of the Internet as an
effective job seeking, recruiting and placement tool. The online recruiting
market is new and rapidly evolving, and we do not yet know how effective online
recruiting is compared to traditional recruiting methods. The adoption of online
recruiting and job seeking, particularly among those companies that have
historically relied upon traditional recruiting methods, requires the acceptance
of a new way of conducting business, exchanging information, advertising and
applying for jobs. Many of our potential customers have little or no experience
using the Internet as a recruiting tool, and only select segments of the
job-seeking population have experience using the Internet to look for jobs.
There can be no assurance that companies will allocate or continue to allocate
portions of their budgets to Internet-based recruiting or that job seekers will
use online job seeking methods. As a result, we cannot be sure that we will be
able to effectively compete with traditional recruiting and job-seeking methods.
If Internet-based recruiting is not widely accepted, our business, results of
operations and financial condition could be materially adversely affected.

WE WILL ONLY BE ABLE TO EXECUTE OUR BUSINESS MODEL IF USE OF THE INTERNET GROWS
AND ITS INFRASTRUCTURE IS ADAPTED TO THAT GROWTH.

If Internet usage does not continue to grow, we may not be able to meet our
business objectives. Increased Internet usage will depend, in large part, upon
the maintenance of the Web infrastructure, such as a reliable network backbone
with necessary speed, data capacity and security, and timely development of
enabling products, such as high-speed modems, for providing reliable Web access
and services and improved content. Internet usage may be inhibited by any of the
following factors:

o The Internet infrastructure may not be able to support the demands placed
on it, or its performance and reliability may decline as usage grows;

o Websites may not be able to provide adequate security and authentication of
confidential information contained in transmissions over the Internet;

o The Internet industry may not be able to adequately respond to privacy
concerns of potential users; and

o Government regulation may decrease the utility of the Internet for some
purposes.

We cannot assure you that the Web infrastructure or Internet industry will be
able to effectively respond to the demands placed on the Web by increased
numbers of users, frequency of use or increased bandwidth requirements of users.

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A FAILURE TO ESTABLISH AND MAINTAIN PARTNERSHIPS AND ALLIANCES WITH OTHER WEB
PROPERTIES COULD LIMIT THE GROWTH OF OUR BUSINESS.

We have entered into arrangements with third parties to increase our member
base, bring traffic to our Website and enhance the HotJobs brand. If any of
our current agreements are terminated, we cannot assure you that we will be
able to replace the terminated agreement with an equally beneficial
arrangement. We also cannot assure you that we will be able to renew any of
our current agreements when they expire or, if we are, that we will be able
to do so on acceptable or favorable terms. We also do not know whether we
will be successful in entering into additional partnerships and alliances or
that any relationships, if entered into, will be on terms favorable to us. In
addition, we are subject to the risk that one or more of the companies with
which we have entered into a strategic partnership could take some action
that would cause HotJobs to be subject to liability or that would damage
HotJobs' reputation.

LOSS OF ANY OF OUR KEY MANAGEMENT PERSONNEL COULD NEGATIVELY IMPACT OUR
BUSINESS.

The loss or departure of any of our officers or key employees could materially
adversely affect our ability to implement our business plan and could lower our
revenues or cause our revenues to fall below our expectations. Our future
success depends to a significant extent on the continued service and
coordination of our management team, particularly Dimitri J. Boylan, our
President and Chief Executive Officer. We do not maintain key person insurance
for any member of our management team. Certain members of our management team
have joined us within the last year. If our key management personnel are not
able to work together effectively or successfully, our business could be
materially adversely affected. In addition, if one or more key employees join a
competitor or form a competing company, though we have non-competition
agreements with each of our key employees, we may lose existing or potential
customers, which could have a material adverse effect on our business, results
of operations and financial condition. Though we have confidentiality agreements
with each of our employees, if we were to lose a key employee, we cannot assure
you that we would be able to prevent the unauthorized disclosure or use of our
procedures, practices, new product development or customer lists.

WE MAY NOT BE SUCCESSFUL IN OUR PLAN FOR INTERNATIONAL EXPANSION.

We may not be able to successfully execute our business plan in foreign markets.
In April 2001, HotJobs announced the creation of a strategic alliance with News
Corp Limited, as a result of which HotJobs combined its Australian customer base
and staff with CareerOne, News Corp's Australian online indirect subsidiary. We
believe that expansion into international markets through a combination of
internal business expansion, strategic alliances, joint ventures and potential
acquisitions will be important in the longer term to continue to grow our
business.

If revenue from international ventures is not adequate to cover our investment
in those ventures, our total revenues could be materially adversely affected. In
addition, if we are forced to discontinue any of our international operations
for the reasons set forth below or other reasons, we could incur material costs
to close down the operation. Our current or future international operations
might not succeed for a number of reasons including:

o difficulties in staffing and managing foreign operations;

o competition from local recruiting services;

o operational issues such as longer customer payment cycles and greater
difficulties in collecting accounts receivable;

o seasonal reductions in business activity;

o language and cultural differences;

o legal uncertainties inherent in transnational operations such as export and
import regulations, tariffs and other trade barriers;

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o taxation issues;

o unexpected changes in trading policies, regulatory requirements and
exchange rates;

o issues relating to uncertainties of laws and enforcement relating to the
regulation and protection of intellectual property; and

o general political and economic trends.

WE MAY NOT BE ABLE TO SUCCESSFULLY MAKE ACQUISITIONS OF OR INVESTMENTS IN OTHER
COMPANIES.

From time to time, we have had discussions with companies regarding our
acquiring, or investing in, their businesses, products, services or
technologies. We cannot assure you that we will be able to identify suitable
acquisition or investment candidates. Even if we do identify suitable
candidates, we cannot assure you that we will be able to make acquisitions or
investments on commercially acceptable terms. Acquiring other businesses and
technologies involves several risks, including:

o availability of financing on terms we find acceptable;

o diversion of our management's attention from other business concerns;

o retention of key personnel of the acquired company;

o entry into markets in which we have little or no direct prior experience;

o inability to identify and acquire businesses on a cost-effective basis;

o inability to manage and integrate acquired personnel, operations, services,
products and technologies into our organization effectively; and

o inability to retain and motivate key personnel and to retain the clients or
goodwill of acquired entities.

In pursuing acquisitions, we may compete with competitors that may be larger and
have greater financial and other resources than we have. Competition for these
acquisition targets could result in increased prices. In addition, in executing
our acquisition strategy, we may incur expenses without being able to identify
suitable acquisition candidates. Furthermore, we may incur debt or issue equity
securities to pay for any future acquisitions, which could have the effects
described in "We may not be able to obtain sufficient funds to grow our business
and any additional financing may be on terms adverse to the interests of our
stockholders."

RISKS RELATED TO THE INTERNET AND OUR TECHNOLOGY INFRASTRUCTURE

WE MAY EXPERIENCE REDUCED VISITOR TRAFFIC, REDUCED REVENUE AND HARM TO OUR
REPUTATION IN THE EVENT OF UNEXPECTED NETWORK INTERRUPTIONS CAUSED BY SYSTEM
FAILURES.

Any system failure, including network, software or hardware failure, that causes
an interruption in the delivery of our products and services or a decrease in
responsiveness of our products and services could result in reduced visitor
traffic, reduced revenue and could materially adversely affect our reputation
and brand. Our servers and software must be able to accommodate a high volume of
traffic. We have experienced system interruptions in the past, and we believe
that these interruptions will continue to occur from time to time in the future.
We believe that visitor traffic is also dependent on the timing and magnitude of
our advertising. We have experienced monthly fluctuations in visitor traffic,
including short-term reductions. Any substantial increase in demands on our
servers will require us to expand and adapt our network infrastructure. If we
are unable to add additional software and hardware to accommodate increased
demand, we could experience unanticipated system disruptions and slower response
times. Any catastrophic failure at one of our co-location facilities could
prevent us from serving our Web traffic for up to several days, and any failure
of one or more of our Internet service providers may adversely affect

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our network's performance. Our customers and job seekers may become dissatisfied
by any system failure that interrupts our ability to provide our products and
services to them or results in slower response times. Our insurance may not
adequately compensate us for any losses that may occur due to any failures in
our system or interruptions in our service.

BREACHES OF OUR NETWORK SECURITY COULD BE COSTLY.

Because we host HotJobs.com and software-related data for many of our customers,
we may be liable to any of those customers that experience losses due to our
security failures. As a result, we may be required to expend capital and
resources to protect against or to alleviate security breaches. A significant
barrier to confidential communications over the Internet has been the need for
security. We may incur significant costs to protect against the threat of
security breaches or to alleviate problems caused by these breaches. If
unauthorized persons penetrate our network security, they could misappropriate
proprietary information or cause interruptions in our services. Misappropriation
of our and our customers' proprietary information or interruptions of our
services could result in reduced visitor traffic and a loss of customers.
Reduced visitor traffic may result in fewer job seekers posting their resumes to
HotJobs.com, which, in turn, may discourage customers from subscribing to
HotJobs.com or AgencyExchange. We generate a substantial portion of our revenue
from these subscription fees. Due to the possibility of liability related to
data we host for our customers and the possibility of a resulting decrease in
the number of job seekers and members to our exchanges, a breach of our network
security could have a material adverse effect on our financial condition and
results of operations.

DISRUPTION OF OUR SERVICES DUE TO UNANTICIPATED PROBLEMS OR FAILURES COULD HARM
OUR BUSINESS.

Our technology resides on computer systems primarily located in co-location
facilities in New York City. Our system's continuing and uninterrupted
performance is critical to our success. Customers and job seekers may become
dissatisfied by any system failure that interrupts our ability to provide our
services to them, including failures affecting our ability to serve Web page
requests without significant delay to the viewer. Sustained or repeated system
failures would reduce the attractiveness of our solutions to customers and job
seekers and result in reduced traffic or contract terminations, fee rebates and
makegoods, thereby reducing revenue.

Slower response times or system failures may also result from straining the
capacity of our software, hardware or network infrastructure. To the extent that
we do not effectively address any capacity constraints or system failures, our
business, results of operations and financial condition could be materially and
adversely affected.

In addition, computer viruses may cause our systems to incur delays or other
service interruptions and could have a material adverse effect on our business,
financial condition and results of operations. In each of 1999 and 2000, we
detected a virus on a file server that supports our office equipment. The
inadvertent transmission of computer viruses could expose us to a material risk
of loss or litigation and possible liability. Moreover, if a computer virus
affecting our system is highly publicized, our reputation could be materially
damaged and our visitor traffic may decrease.

Our operations are dependent on our ability to protect our computer systems
against damage from fire, power loss, water damage, telecommunications failures,
vandalism and other malicious acts, and similar unexpected adverse events. In
addition, interruptions in our solutions could result from the failure of our
telecommunications providers to provide the necessary data communications
capacity in the time frame we require. Despite precautions we have taken,
unanticipated problems affecting our systems have from time to time in the past
caused, and in the future could cause, interruptions in the delivery of our
solutions. Our business, results of operations and financial condition could be
materially and adversely affected by any damage or failure that interrupts or
delays our operations.

WE MAY NOT BE ABLE TO ACCESS THIRD-PARTY TECHNOLOGY UPON WHICH WE DEPEND.

If we lose the ability to access third-party technology which we use, are unable
to gain access to additional products or are unable to integrate new technology
with our existing systems, we could experience delays in our development and
introduction of new services and related products or enhancements until
equivalent or replacement technology can be accessed, if available, or developed
internally, if feasible. If we experience these delays, our revenues could be
reduced or grow slower than expected and our business could be materially
adversely

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affected. We license technology that is incorporated into our services and
related products from third parties. In light of the rapidly evolving nature of
Internet technology, we may increasingly need to rely on technology from these
or other vendors. Technology from our current or other vendors may not continue
to be available to us on commercially reasonable terms, or at all.

INABILITY TO RECOVER IN THE EVENT OF A DISASTER.

Because HotJobs maintains a single Website and series of servers, a loss of
power, services or the destruction of the building where our servers are housed
could result in a lengthy outage while HotJobs secures an alternative site and
works to restore key systems from tape. Any flaws in this process, which might
result from the loss of tapes or errors in the copies of the systems themselves,
could result in a permanent loss of data.

RISKS RELATED TO LEGAL UNCERTAINTY

WE MAY BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATIONS AND LEGAL
UNCERTAINTIES AFFECTING THE INTERNET THAT COULD ADVERSELY AFFECT OUR BUSINESS.

Legal uncertainties and new regulations could increase our costs of doing
business, require us to revise our products or services, prevent us from
delivering our products and services over the Internet or slow the growth of
the Internet, any of which could increase our expenses, reduce our revenues
or cause our revenues to fall below our expectations and materially adversely
affect our business, financial condition and results of operations. Laws and
regulations directly applicable to Internet communications, commerce,
recruiting and advertising are becoming more prevalent, and new laws and
regulations are under consideration by the U.S. Congress and state
legislatures. Any legislation enacted or restrictions arising from current or
future government investigations or policy could dampen the growth in use of
the Internet generally and decrease the acceptance of the Internet as a
communications, commercial, recruiting and advertising medium. The laws
governing the Internet, however, remain largely unsettled, even in areas
where there has been some legislative action. It may take years to determine
whether and how existing laws such as those governing intellectual property,
privacy, libel and taxation apply to the Internet. In addition to new laws
and regulations being adopted, existing laws may be applied to the Internet.
Moreover, the laws and the interpretation of laws concerning the recruiting
industry are constantly changing. New and existing laws may cover issues that
include:

o user privacy;

o civil rights, affirmative action and other employment claims;

o consumer protection;

o libel and defamation;

o copyright, trademark and patent infringement;

o trade secret protection;

o rights of publicity and moral rights;

o database protection;

o domain name registration;

o pricing controls;

o characteristics and quality of products and services;

o sales and other taxes; and

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o other claims based on the nature and content of Internet materials.

In addition, any enhancement of the ability of states to impose sales and use
taxes on products and services sold over the Internet may decrease demand for
the products and services that we sell over the Internet. The U.S. Congress
passed legislation in 1998 creating a three-year moratorium on the ability of
states to impose any new, multiple or discriminatory taxes on Internet-based
transactions. This moratorium expired in October 2001. Failure by Congress to
renew this legislation and the subsequent imposition of new, multiple or
discriminatory state taxes on Internet-based transactions could adversely affect
our future operating results which could result in a decline in our stock price.
In addition, there are various initiatives being considered by Congress that
would eliminate some of the barriers that now prevent states from imposing their
existing sales and use taxes on out-of-state, Internet-based sellers. If passed,
an initiative of this kind could adversely affect our future operating results,
which could result in a decline in our stock price.

WE MAY BE UNABLE TO OBTAIN A U.S. SERVICE MARK REGISTRATION FOR OUR BRAND OR TO
PROTECT OUR OTHER PROPRIETARY INTELLECTUAL PROPERTY RIGHTS.

FAILURE TO OBTAIN A U.S. SERVICE MARK REGISTRATION OF WWW.HOTJOBS.COM
COULD DISRUPT OUR PROMOTION OF THE HOTJOBS BRAND. If we are unable to secure the
nationwide rights to the exclusive use of the WWW.HOTJOBS.COM mark and related
marks, a key element of our strategy of promoting "HotJobs" as a global brand
could be disrupted. Our success depends to a significant degree upon the
protection of our brands and their value, particularly the "HotJobs" brand name.
We are also susceptible to others imitating our brands, particularly "HotJobs".
Our application to obtain a U.S. service mark registration of WWW.HOTJOBS.COM
was approved by the United States Patent and Trademark Office and published for
possible opposition by third parties on April 18, 2000. An opposition was filed
by a third party against the application but was dismissed by the Trademark
Trial and Appeal Board with prejudice in July 2001. In May 1998, a pending
trademark applicant, who has since abandoned its application, made claims
regarding prior use and ownership of "hotjobs" as a trademark. Adverse outcomes
to this or similar claims or any related litigation, should it occur, could
result in our being limited or prohibited from further use of the
WWW.HOTJOBS.COM service mark and related marks in the future.

FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS COULD PERMIT OTHERS TO
APPROPRIATE OUR PROPRIETARY TECHNOLOGY. The unauthorized reproduction or other
misappropriation of our proprietary technology, including our hiring management
software, could enable third parties to benefit from our technology and brand
name without paying us for them. If this were to occur, our revenues could be
materially adversely affected and the value of our brand could be diminished.
The steps we have taken to protect our proprietary rights may not be adequate to
deter misappropriation of proprietary information. We may not be able to detect
unauthorized use of our proprietary information or take appropriate steps to
enforce our intellectual property rights. In addition, the validity,
enforceability and scope of protection of intellectual property in
Internet-related industries is uncertain and still evolving. The laws of other
countries in which we market or may market our services in the future are
uncertain and may afford little or no effective protection of our intellectual
property. If we resort to legal proceedings to enforce our intellectual property
rights, the proceedings could be burdensome and expensive. The proceedings also
could involve a high degree of risk.

DEFENDING AGAINST INTELLECTUAL PROPERTY INFRINGEMENT, SECURITIES LITIGATION AND
OTHER CLAIMS COULD BE TIME CONSUMING AND EXPENSIVE. IF WE ARE NOT SUCCESSFUL IN
DEFENDING AGAINST THESE CLAIMS, WE COULD BE SUBJECT TO SIGNIFICANT DAMAGES AND
THE DISRUPTION OF OUR BUSINESS.

We participate in an industry that has been the subject of extensive litigation.
Litigation brought against us could result in substantial costs to us in
defending against the lawsuit and a diversion of management's attention.
Successful intellectual property infringement claims against us could result in
monetary liability or a material disruption in the conduct of our business. We
cannot be certain that our products, content and brand names do not or will not
infringe valid patents, copyrights or other intellectual property rights held by
third parties, including the right to receive license or royalty payments from
us related to the use and sale of products incorporating technology or software
developed by or in conjunction with third parties. We expect that infringement
claims in our markets will increase in number as more participants enter the
markets. We may be subject to legal proceedings and claims from time to time
relating to the intellectual property of others in the ordinary course of our
business. If we were found to have infringed the intellectual property rights of
a third party, we could be liable to that party for license

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fees, royalty payments, profits or damages, and the owner of the intellectual
property might be able to prevent us from using the technology or software in
the future. If the amount of these payments were significant or we were
prevented from incorporating certain technology or software into our products,
our results of operations could be materially adversely affected. Securities
class action litigation has often been brought against companies that experience
volatility in the market price of their securities. Since our stock price is
volatile, we could be subject to securities litigation. We are also subject to
the risk of litigation in the ordinary course of our business, including
litigation related to employment claims.

We may incur substantial expense in defending any claims brought against us,
regardless of their merit. As a result, due to the diversion of management time,
the expense required to defend the company and the potential liability
associated with any lawsuits, any significant litigation could have a material
adverse effect on our business and results of operations.

WE MAY BE LIABLE AS A RESULT OF INFORMATION RETRIEVED FROM OR TRANSMITTED OVER
THE INTERNET.

We may be sued for defamation, civil rights infringement, negligence, copyright,
patent or trademark infringement, personal injury, product liability or other
legal claims relating to information that is published or made available on
HotJobs.com and the other sites linked to it. These types of claims have been
brought, sometimes successfully, against online services in the past. We could
also be sued for the content that is accessible from HotJobs.com and through
links to other Internet sites or through content and materials that may be
posted by members in chat rooms, online communities or on bulletin boards. In
addition, clients use our hiring management software to evaluate and make
decisions on the resumes of applicants. In the event that one of our clients was
sued alleging employment discrimination, we could be named in that lawsuit. We
have in the past offered e-mail services, which subject us to potential risks,
such as liabilities or claims resulting from unsolicited e-mail or spamming,
lost or misdirected messages, security breaches, illegal or fraudulent use of
e-mail or interruptions or delays in e-mail service. Our insurance may not
adequately protect us against these types of claims. In addition, we could incur
significant costs in investigating and defending such claims, even if we
ultimately are not liable. If any of these events occur, our revenues could be
materially adversely affected.

OTHER RISKS

TERRORIST ATTACKS HAVE CONTRIBUTED TO ECONOMIC INSTABILITY IN THE UNITED STATES;
CONTINUED TERRORIST ATTACKS, WAR OR OTHER CIVIL DISTURBANCES COULD LEAD TO
FURTHER ECONOMIC INSTABILITY AND DEPRESS HOTJOBS' STOCK PRICE.

On September 11, 2001, the United States was the target of terrorist attacks of
unprecedented scope. These attacks have led to instability in the global
financial markets, and have contributed to downward pressure on stock prices of
many United States publicly traded companies. This instability has resulted in a
slowdown in the employment sector as companies assess the impact of the attacks
on their operations and on their employment needs. These attacks may lead to
armed hostilities or to further acts of terrorism and civil disturbances in the
United States or elsewhere, which may further contribute to economic instability
in the United States and could adversely effect HotJobs' business, financial
condition and operating results.

OUR STOCK PRICE MAY EXPERIENCE EXTREME PRICE AND VOLUME FLUCTUATIONS.

The stock market in general and the market prices of shares in technology
companies, particularly those such as ours that offer Internet-based products
and services, have been extremely volatile and have experienced fluctuations
that have often been unrelated or disproportionate to the operating performance
of such companies. The closing market price of our common stock has fluctuated
significantly, from $3.09 to $17.25 in the twelve months ending September 30,
2001, and could continue to be highly volatile and subject to wide fluctuations
in response to many factors, some of which are largely beyond our control. These
factors include:

o quarterly variations in our results of operations;

o adverse business developments;

o changes in financial estimates by securities analysts;

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o investor perception of us, our management and online recruiting services
and the technology sector in general;

o announcements by our competitors of new products and services or
acquisitions; and

o general economic conditions both in the U.S. and in foreign countries.

Our stock price may also experience fluctuations due to approximately $1.2
million in non-cash deferred compensation as of September 30, 2001 that we
expect to amortize through August 2003 and $25.7 million of goodwill as of
September 30, 2001 that we expect to partially amortize through December 2001.

FUTURE SALES OF OUR COMMON STOCK MAY NEGATIVELY AFFECT OUR STOCK PRICE.

The market price of our common stock could decline as a result of sales of a
large number of shares of our common stock in the market or as a result of sales
by our existing stockholders, or the perception that these sales could occur. We
have a large number of shares of common stock outstanding and available for
resale. These sales might make it more difficult for us to sell equity
securities in the future at a time and at a price that we deem appropriate.
Unregistered shares of our common stock currently outstanding are eligible for
sale without registration pursuant to Rule 144 under the Securities Act, subject
to certain conditions of Rule 144 and certain affiliate agreements.

IT MAY BE DIFFICULT FOR A THIRD PARTY TO ACQUIRE HOTJOBS, WHICH COULD DEPRESS
OUR STOCK PRICE.

Delaware corporate law, our amended and restated certificate of incorporation
and bylaws, and our stock option plans contain provisions that could have the
effect of delaying, deferring or preventing a change in control of HotJobs or
our management that stockholders may consider favorable or beneficial. These
provisions could discourage proxy contests and make it more difficult for our
stockholders to elect directors and take other corporate actions. These
provisions could also limit the price that investors might be willing to pay in
the future for shares of our common stock. These provisions include:

o authorization to issue "blank check" preferred stock, which is preferred
stock that can be created and issued by the board of directors without
prior stockholder approval, with rights senior to those of common stock;

o a staggered board of directors, so that it would take three successive
annual meetings to replace all directors;

o prohibition of stockholder action by written consent;

o advance notice requirements for the submission by stockholders of
nominations for election to the board of directors and for proposing
matters that can be acted upon by stockholders at a meeting;

o immediate vesting of options issued under the stock option plans in
connection with a change of control; and

o the payment of a cash distribution for surrendered options with limited
stock appreciation rights upon the successful completion of a hostile
tender offer for more than 50% of our outstanding voting stock.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK. We are exposed to changes in interest rates primarily due
to our investment in short-term marketable securities, which are primarily
comprised of Dutch Auction Rate Securities with longer term maturities that
generally reset at par every 35 days and may include municipal obligations,
money market preferred stock and taxable debt. These investments are classified
as available-for-sale securities and, therefore, any changes in the market's
interest rates affect the value of the investment and such change in value is
recorded as unrealized gains and losses. Due to the short-term maturities of our
cash equivalents and marketable securities portfolio at September 30, 2001, we
have not entered into any financial instruments to manage or reduce the impact
of changes in interest rates. Our interest risk, based on a hypothetical
increase in interest rates of 100 basis points for the financial instruments
included in our portfolio, would be a decrease of approximately $3,000 in the
value of our portfolio.

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MARKET RISKS. Our accounts receivable are subject, in the normal course of
business, to collection risks. We regularly assess these risks and have
established policies and business practices to protect against the adverse
effects of collection risks.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, HotJobs is subject to legal proceedings and claims in the
ordinary course of business, including claims of alleged infringement of
trademarks, copyrights and other intellectual property rights, as well as claims
by former employees. HotJobs is not currently aware of any legal proceedings or
claims that it believes will have, individually or in the aggregate, a material
adverse effect on its financial position or results of operations.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibits are filed as part of this report:

NUMBER DESCRIPTION
--------- ----------------------------------------------------------
3.1* Amended and Restated Certificate of Incorporation.
3.2* Amended and Restated Bylaws.
4.1* Specimen Common Stock Certificate.
4.2 Please see Exhibits 3.1 and 3.2 for provisions of the
Certificate of Incorporation and Bylaws.

* Incorporated by reference to our Registration Statement on Form S-1 (File No.
333-80367), as amended.

(b) Reports on Form 8-K

Report on Form 8-K/A dated June 29, 2001 and filed July 2, 2001, for the
purpose of filing under Item 5 - reporting the execution of the Agreement
and Plan of Merger, dated as of June 29, 2001, among TMP Worldwide, Inc.,
TMP Tower Corp. and HotJobs.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

HOTJOBS.COM, LTD.
(REGISTRANT)

DATED: November 14, 2001 BY: /s/ Lowell W. Robinson
------------------------
Lowell W. Robinson
Chief Financial Officer
(Duly Authorized Officer and
Principal Accounting Officer)