S-1 1 s1.txt SWITCHBOARD INCORPORATED FORM S1 As filed with the Securities and Exchange Commission on October 23, 2003 Registration No. [333]-[ ] -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM S-1 REGISTRATION STATEMENT Under The Securities Act of 1933, as Amended ------------------ SWITCHBOARD INCORPORATED (Exact Name of Registrant As Specified In Its Charter) ------------------ Delaware 7375 04-3321134 (State or Other Primary Standard (I.R.S. Employer Jurisdiction of Incorporation Industrial Classification Identification or Organization) Code Number Number) 120 Flanders Road Westborough, Massachusetts 01581 (508) 898-8000 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) ------------------ Dean Polnerow President & Chief Executive Officer Switchboard Incorporated 120 Flanders Road Westborough, Massachusetts 01581 (508)898-8000 (Name and Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) ------------------ Copies to: Steven M. Peck, Esq. Marc M. Rossell, Esq. Weil, Gotshal & Manges LLP Shearman & Sterling LLP 100 Federal Street 599 Lexington Ave. Boston, Massachusetts 02110 New York, New York 10022 (617)772-8300 (212)848-4000 ------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable on or after this Registration Statement is declared effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of -------- 1933 check the following box: [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box ----------- and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, -------- please check the following box. [ ] ------------------ CALCULATION OF REGISTRATION FEE

(1) Pursuant to Rule 457(c) under the Securities Act, this per share amount is based on the average high and low prices of our common stock on October 20, 2003 as reported on the NASDAQ National Market. Estimated solely for the purpose of calculating the registration fee. ------------------ The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED ___________ 23, 2003 PROSPECTUS [SWITCHBOARD/LOGO APPEARS HERE] 8,815,171 Shares Common Stock -------------------------------------------------------------------------------- The selling stockholders identified in this prospectus are selling 8,715,171 shares of our common stock, and we are selling an additional 100,000 shares. We will not receive any of the proceeds from the sale of the shares sold by the selling stockholders. The selling stockholders have granted the underwriters a 30-day option to purchase up to an additional 1,322,250 shares from them to cover over-allotments, if any. Our common stock is listed on the Nasdaq National Market under the symbol "SWBD." The last reported sale price on October 20, 2003 was $7.60 per share. -------------------------------------------------------------------------------- INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 7. --------------------------------------------------------------------------------

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The shares will be ready for delivery on or about _________ __, 2003 -------------------------------------------------------------------------------- Thomas Weisel Partners LLC SG Cowen The date of this prospectus is ____________ ___, 2003 TABLE OF CONTENTS

------------------ You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the common stock. In this prospectus "Company," "we," "us" and "our" refer to Switchboard Incorporated and its subsidiaries. Unless otherwise indicated, all information in this prospectus assumes no exercise of the underwriters' over-allotment option. PROSPECTUS SUMMARY The following summary highlights information contained elsewhere in this prospectus. It does not contain all of the information you should consider. Before you decide to invest in our common stock, you should read the entire prospectus carefully, including the risk factors and the consolidated financial statements and related notes included in this prospectus. You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock. We undertake no obligation to update this prospectus for any events occurring after the date of this prospectus. Our Company We are a leading provider of local online advertising solutions for merchant and national advertisers, enabled by our innovative, consumer-oriented online yellow and white pages directory technology. We generate revenue primarily from advertising that is placed in the Switchboard-powered yellow pages platforms of our licensees, as well as our own directory website, www.switchboard.com. We license our yellow pages platform to Internet portals, traditional yellow pages publishers and newspaper publishers. Through our website and our licensee network of Switchboard-powered yellow pages platforms, we provide merchant and national advertisers an innovative and effective way to connect with online consumers performing local business searches, thus helping these businesses establish and grow their online presence. As with the traditional paper-based yellow pages, merchants that advertise directly with us or through one of our licensees are able to get their message in front of consumers at the time they are looking for that merchant's products or services. Each month, millions of consumers seek the businesses they need through our consumer-oriented directories. For decades, yellow pages directories have been a primary source of local merchant information for consumers. According to The Kelsey Group, the yellow pages industry generates an estimated $14 billion in annual advertising sales in the United States, and is experiencing a migration from paper-based consumer searches to online searches. The Kelsey Group reported an increase in online searches to 13% of total yellow pages searches in 2002 as compared to 10% in 2001 and 2% in 2000, and projects that online and wireless searches will account for 40% of lookups by 2006. As the volume of directory references made online continues to grow, we believe merchants will continue to shift marketing expenditures away from print yellow pages providers to online yellow pages providers. Further, one of the fastest growing segments of online advertising is paid search. We believe that "pay for placement" and "pay for performance" advertising business models have significantly contributed to the success of paid search. According to the Interactive Advertising Bureau, paid search accounted for approximately $900 million, or 15% of online advertising spending in 2002 and is expanding into the local online advertising market with its "pay for performance" model. Our Business Merchant and national advertisers pay to advertise in the Switchboard-powered directories of our licensees and/or in our directory. Consumers access our directory platform through one of the Internet brands of our licensees or through our website, www.switchboard.com, to locate business and residential information locally and nationally. The advertising placed in our directories is sold by various local and national sales channels and our own direct sales force. Our directory technology creates powerful advertising opportunities for merchants, and, like the print yellow pages, the advertising content itself creates a more useful experience for consumers. We believe that by increasing our advertising content, we can drive more usage to our own website, and to the websites of our licensees. By increasing our consumer audience, we, in turn, increase the value and reach of our advertising products. Our Advertising Products We offer a variety of advertising products tailored to the needs of small local businesses, large national advertisers, e-tailers and other advertisers seeking increased online exposure. These advertising products are an integral part of our directory platform, and are enhanced by our strong technology and substantial merchant information database. Our advertising products include: Subscriptions for Prominent Placement - Advertisers pay for prominent placement in the Switchboard-powered directories of our licensees and/or in our directory. 1 Local Performance Based Advertising (LocalClicks(SM)) - Advertisers pay for links contained within local business listings. Our recently released LocalClicks(SM) products permit consumers to link directly from yellow pages listings to extended business information, business services and products available for online purchase. For example, an automobile manufacturer may buy, in a single ad purchase, paid links embedded in the listings of all their dealerships nationwide. Content Targeted Advertising - Advertisers pay for contextually relevant clicks on our site. Utilizing the extensive proprietary merchant information we have gathered, we are able to offer highly relevant local content-targeted advertisements on yellow pages results pages. For example, we have an agreement with Google Inc. to share in the revenue generated when Switchboard.com users click on content-targeted advertisements provided through the Google AdSense(TM) program. Google selects advertisements based on a real-time analysis of the merchant information available on each Switchboard yellow pages results page. Banner Advertising - National advertisers pay for traditional site wide and category specific banner advertising. Selling our Advertising Products Our online advertising products are sold by the sales forces of our directory platform licensees, our own direct sales force, and third party sales channels. We license a complete suite of products to enable Internet portals, traditional yellow pages publishers, and newspaper publishers to offer local online advertising solutions and yellow and white page directories under their own brands. In addition to a set-up fee, our licensees typically pay us either a fixed fee for each merchant promoted in their directory platform or a percentage of the revenue generated from those merchant advertisements. America Online, Inc., ("AOL") our largest licensee, constituted approximately 47% of our revenue during the six months ending June 30, 2003. We have recently amended our arrangement with AOL; see "Prospectus Summary - Recent Developments." We also use our own direct sales force and third party sales forces to sell advertising into the www.switchboard.com website. The Audience for our Advertising Products Our licensees have their own respective online audiences, or consumer reach, and the advertisements they sell into their Switchboard-powered directories are made visible to those audiences. Furthermore, our own website, www.switchboard.com, is one of the leading destinations on the Internet where consumers search for local merchants. Advertisements placed by our direct and third party sales forces on www.switchboard.com are visible to millions of consumers each month. Directory advertisements sold into www.switchboard.com are typically made visible in the directories of a subset of our licensees who agree to display directory advertisements sold by other sales forces. The combined audience of www.switchboard.com and these licensees adds overall value and reach for our advertisers. Our Technology and Content Our directory platform is made up of a suite of proprietary software components that enable us, and our licensees, to develop and manage an online directory business. Our directory platform includes a specialized local business search engine; a combination of proprietary and licensed merchant information; a proprietary, highly scalable, high performance database; and a comprehensive suite of advertising and merchant management tools. Our sophisticated business search technology permits merchants to be found using searchable "copy points" (proprietary enhanced data about a merchant's products and services that we gather ourselves) and geo-targeting. Our high performance database and data management systems allow the regular updates of local merchant information, and the rapid injection and tracking of paid links embedded into thousands of local merchant listings. Our Strategy We intend to grow our business by focusing on the following key strategies: * Promoting the development of local online advertising solutions and the online yellow pages market by licensing our directory technology to major media and local advertising companies; 2 * Increasing the number of paying merchants in our directory and those of our licensees; * Expanding the audience for our advertising products; and * Continuing to innovate new product and service offerings to deliver a superior consumer experience and enhanced value to merchants that advertise with us and with our licensees. Recent Developments For the nine months ended September 30, 2003, net revenue increased to $11.4 million from $8.4 million in the corresponding period in 2002. The increase in net revenue during the nine months ended September 30, 2003 was also attributable to increases in merchant network revenue and national advertising and site sponsorship revenue. Net revenue for the nine months ended September 30, 2002 included amortization of consideration given to AOL of $2.0 million, which is recorded as a reduction of revenue in the period. There was no corresponding amortization of consideration given to AOL in the nine months ended September 30, 2003. For the nine months ended September 30, 2003, net income increased to $l.3 million, or $0.07 per share, from a net loss of $3.8 million, or $0.20 per share, in the corresponding period in 2002. The increase in net income in the nine months ended September 30, 2003 was primarily due to increased revenue, as well as a decrease in operating expenses. A table summarizing financial results follows:

In October 2003, we amended our directory agreement with AOL. The agreement provides for an annual license fee of $4.8 million annually from AOL, in exchange for providing, maintaining and customizing the AOL yellow pages directory platform and including existing AOL yellow pages local advertisers in our www.switchboard.com directory. The agreement was extended through December 2005. In addition, the agreement creates the opportunity for both parties to share in revenue generated from advertising products that combines both AOL's and our consumer audience. The revenue sharing arrangement, based on a percentage of AOL merchant subscription revenue, that was previously in effect has been eliminated. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Significant Relationship" for more information on our relationship with AOL. In September 2003, we entered into a Services Agreement with Monstermoving, Inc. ("Monstermoving"). Pursuant to the agreement, we will provide Monstermoving with the ability to sell directory advertising services on the www.switchboard.com website and a customized private-label yellow pages platform for the Monstermoving Internet property. Monstermoving has agreed to add inclusion in the www.switchboard.com website to each offering it sells to the advertisers on the Monstermoving.com website, and to provide us with a portion of the subscription revenue it receives. 3 Corporate Information We are a Delaware corporation that commenced operations in February 1996. From our inception in February 1996 until our initial public offering in March 2000, we were a unit and later a subsidiary of ePresence, Inc. (formerly Banyan Worldwide) ("ePresence"), the primary selling stockholder in this offering. ePresence currently owns approximately 51.4% of our common stock and will hold 5.7% of our common stock following this offering, or none if the over-allotment option is exercised in full. Our offices are currently located at 120 Flanders Road, Westborough, Massachusetts, 01581, and our phone number is (508) 898-8000. Our website address is www.switchboard.com. Information on our website is not included or incorporated into, and does not otherwise form a part of this prospectus. 4 THE OFFERING Common stock offered by us............................. 100,000 shares Common stock offered by the selling stockholders....... 8,715,171 shares Total.................................................. 8,815,171 shares Common stock to be outstanding after this offering..... 19,000,173 shares Shares of common stock to be owned by the selling stockholders at the close of this offering............................................... 1,087,250 shares Use of proceeds........................................ We intend to use our proceeds from this offering primarily to pay for the expenses of this offering and for general corporate purposes. We will not receive any proceeds from the sale of common stock offered by the selling stockholders. Nasdaq National Market symbol.......................... SWBD

Unless otherwise noted, the information in this prospectus, including the information above: * assumes 18,900,173 shares of common stock outstanding as of September 4, 2003; * excludes 3,279,827 shares of common stock issuable upon the exercise of outstanding stock options as of September 4, 2003 at a weighted average exercise price of $4.73 per share; * excludes 5,403,308 shares of common stock reserved for future issuance under our stock option plans as of September 4, 2003; and * assumes no exercise of the underwriter's over-allotment option to purchase up to 1,322,250 shares of common stock to cover over-allotments. 5 SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA The following table summarizes our consolidated financial data and operating data for the periods presented. You should read this data along with "Management's Discussion and Analysis of Financial Condition and Results of Operation" and our consolidated financial statements and related notes included elsewhere in this prospectus.

------------------ The following table summarizes our balance sheet data as of June 30, 2003. This balance sheet data is presented on an actual basis and as adjusted to give effect to the sale of the shares of common stock in this offering by us at the assumed public offering price of $7.60 per share, after deducting the underwriting discount and estimated offering expenses payable by us.

6 RISK FACTORS You should carefully consider the risks described below before making an investment decision. The risks described below are not the only ones we face. Additional risks we are not presently aware of or that we currently believe are immaterial may also impair our business operations. Our business could be harmed by any of these risks. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. In assessing these risks, you should also refer to the other information contained in this prospectus, including our financial statements and related notes. RISKS RELATED TO OUR BUSINESS If the directory agreement we entered into with America Online, Inc., a subsidiary of Time Warner Inc. ("AOL") (the "Directory Agreement") is not successful, is terminated prematurely or is not renewed on substantially similar or favorable terms, it would have a materially negative effect on our results of operations. Prior to the October 2003 amendment of the Directory Agreement, we shared with AOL specified directory advertisement revenue. The October 2003 amendment extends the initial term of the Directory Agreement through December 2005. Among other things, the October 2003 amendment provides that we will receive $4.8 million annually from AOL in exchange for providing, maintaining and customizing the AOL yellow pages directory platform and including existing AOL yellow pages local advertisers in our switchboard.com directory. In addition, the amendment creates the opportunity for both parties to share in revenue generated from advertising products that combine the consumer audience of both AOL and Switchboard. The revenue sharing arrangement based on a percentage of AOL merchant subscription revenue that was previously in effect has been eliminated. The exact nature and terms of the combined advertising products have yet to be fully defined. Any future growth in revenue under the Directory Agreement is dependent upon the acceptance of these combined products by advertisers and our ability to sell these products, for which we have no prior experience. There can be no assurances that we will be successful in selling these advertisements. Even though we have amended the Directory Agreement, the Directory Agreement may still be prematurely terminated due to a breach by either party. Further, we or AOL may elect not to renew the agreement upon its expiration. If the agreement is renewed, it may be renewed under terms that are materially different than those in place today. The termination or expiration of our Directory Agreement with AOL would have a material adverse effect on our results of operations and financial condition. If we renew the Directory Agreement with AOL for at least an additional four years after the initial term (through at least December 2009), we agreed to issue to AOL a warrant to purchase up to 721,385 shares of common stock at a per share purchase price of $4.32. The issuance of such warrants may have a material adverse effect on our operating results and dilute the ownership of existing shareholders. AOL accounted for $4.9 million or 41.8% of total net revenue in 2002, and $3.4 million or 47.0% of total net revenue in the six months ended June 30, 2003. Under the amended Directory Agreement, AOL will be obligated to pay us $4.8 million per year and there is no assurance that any additional revenue will be recognized from the Directory Agreement. The new arrangement by which both Switchboard and AOL will share in the revenues associated with the sale of combined advertising products may not be successful and may not generate any additional revenue for us. We have a history of incurring net losses, we may incur net losses during future quarters and we may not sustain or improve our current financial performance or achieve profitability again. We have incurred significant net losses in each fiscal quarter previous to the fiscal quarter ended March 31, 2003. From inception to June 30, 2003, we have an accumulated deficit totaling $108.2 million. We need to generate substantial revenue to fund our operations. Although we recorded a profit in each of the fiscal quarters ended March 31 and June 30, 2003, we may not sustain or increase profitability on a quarterly or annual basis in the future. If we do not achieve sustained profitability, we will eventually be unable to continue our operations. Our quarterly results of operations are likely to fluctuate and, as a result, we may fail to meet the expectations of our investors and securities analysts, which may cause the price of our common stock to decline. Our quarterly revenue and results of operations are volatile and are particularly difficult to predict due to the concentration of revenue generated from our relationship with AOL. Our quarterly results of operations have 7 fluctuated significantly in the past and are likely to fluctuate significantly from quarter to quarter in the future. We do not believe that period-to-period comparisons of our results of operations are necessarily meaningful and you should not rely upon these comparisons as indicators of our future performance. Factors that may cause our results of operations to fluctuate include: * the addition, loss or success of relationships with third parties that are our source of new merchants or that license our software; * the amount and timing of expenditures for expansion of our operations, including the hiring of new employees, capital expenditures and related costs; * technical difficulties or failures affecting our systems or the Internet in general; * a decline in Internet traffic at our website and the websites of our licensees; * the cost of acquiring, and the availability of, content, including directory information and maps; and * the fact that our expenses are only partially based on our expectations regarding future revenue and are largely fixed in nature, particularly in the short term. Additionally, our results of operations may fluctuate due to the significant contribution of our relationship with AOL to our revenue. Although we have recently amended the Directory Agreement to provide for an annual license fee of $4.8 million, our quarterly results of operations may fluctuate depending upon the amount of engineering services we provide to AOL and the amount of revenue generated by advertising products that combine the consumer audience of AOL and Switchboard. AOL has the right to carry forward up to 1,000 unused hours of engineering per quarter into the next quarter. Revenue associated with any such hours of engineering services carried forward would also be deferred until such time as the engineering services are delivered to AOL, or AOL's right to use those hours expires. As a result, our revenue, results of operations and cash flows from operating activities could fluctuate on a quarterly basis. As a result of these or other factors, results in any future quarter may be below the expectations of securities analysts or investors. If so, the market price of our common stock may decline significantly. We depend on strategic customer and supplier relationships to grow our business and our business may not grow if the relationships upon which we depend fail to produce the expected benefits or are terminated. Our business depends upon our ability to maintain and benefit from our existing customer relationships, particularly those with directory platform licensees. The success of our directory platform depends in substantial part upon our ability to access a broad base of local merchants. The target merchant base is highly fragmented and local merchants are difficult to contact efficiently and cost-effectively. Consequently, we depend on relationships with licensees who license our directory platform technology to sell Internet yellow pages advertising to local merchants and provide them billing and other administrative services. The termination of any strategic relationship with a directory platform licensee could significantly impair our ability to attract potential local merchant customers. In addition to our relationship with AOL, we have entered into strategic relationships with additional licensees of our technology and supplier relationships with third-party content providers. These parties may not perform their contractual obligations to us and, if they do not, we may not be able to require them to do so. Some of our strategic customer and supplier relationships may be terminated by either party on short notice. Our strategic customer and supplier relationships are in the early stages of development. These relationships may not provide us benefits that outweigh the costs of the relationships. If any strategic customer or supplier demands a greater portion of revenue or requires us to make payments for access to its website, we may need to terminate or refuse to renew that relationship, even if it had been previously profitable or otherwise beneficial. In addition, if we lose a significant strategic customer or supplier, we may be unable to replace that relationship with other strategic relationships with comparable revenue potential, content or user demographics. 8 If we cannot demonstrate the value of our advertising products to merchants, those merchant customers may stop purchasing our advertising products, which could reduce our revenue and have a material adverse effect on our results of operations. We may be unable to demonstrate the value of our advertising products to merchants. If local merchants cancel their advertising, our revenue could decline and we may need to incur additional expenditures to obtain new local merchant advertisers. We do not presently provide data demonstrating the number of leads generated by the advertising that merchants have purchased. Regardless of whether our merchant advertising products effectively produce leads, merchant advertisers may not know the source of the leads and may cancel their advertising. The attractiveness of our advertising products could diminish if we are not able to license accurate database information from third-party content providers. We principally rely upon single third-party sources to provide us with our business and residential listings data and mapping data. The loss of any one of these sources or the inability of any of these sources to collect their data could significantly and adversely affect our ability to provide information to consumers. Although other sources of database information exist, we may not be able to integrate data from these sources into our database systems in a timely, cost-effective manner, or without a significant disruption to internal engineering resources. Other sources of data may not be offered on terms acceptable to us. Moreover, a consolidation by Internet-related businesses could reduce the number of content providers with which we could form relationships. We typically license information under arrangements that require us to pay royalties or other fees for the use of the content. In the future, some of our content providers may demand a greater portion of advertising revenue or increase the fees that they charge us for their content. If we fail to enter into and maintain satisfactory arrangements with existing or substitute content providers, we may be unable to continue to provide our products. The success of our business depends on the quality of our services and that quality is substantially dependent on the accuracy of data we license from third parties. Any failure to maintain accurate data could impair the reputation of our brand and our services, reduce the volume of users attracted to our website as well as the websites of our directory platform licensees and our merchant advertisers, and diminish the attractiveness of our service offerings to those licensees, merchant advertisers and content providers. We rely on a small number of customers, the loss of whom may substantially reduce our revenue. We derive a substantial portion of our net revenue from a small number of customers who license our technology and sell our products. During the six months ended June 30, 2003, net revenue derived from our top ten customers accounted for approximately 72.1% of our total net revenue. Additionally, net revenue derived from AOL alone accounted for 47.0% of our total net revenue in the six months ended June 30, 2003. Consequently, our revenue may substantially decline if we lose any of these customers. We anticipate that our future results of operations will continue to depend to a significant extent upon revenue from a small number of customers. In addition, we anticipate that the identity of those customers will change over time. Our pay for performance based advertising is a new business offering, and we may be unable to successfully market this service to new and existing customers and we may be unable to develop reliable administrative tools required to support the new business offering, which could adversely affect our revenue. We recently introduced our LocalClicks(SM) pay for performance advertising service. This is a new aspect of our business, and we do not have any significant prior experience in marketing or providing this type of advertising product. Our failure to successfully attract merchant advertisers to the LocalClicks(SM) product could adversely effect our ability to generate revenue. We use internally developed software to administer and support our pay for performance based advertising. This software is still being refined, and may contain undetected errors, defects or bugs. We may discover significant errors or defects in the future that we may not be able to fix. Our inability to detect or fix any such errors or defects could limit our ability to provide our services and collect payments, and it may impair the reputation of our brand and our services and our ability to accurately monitor performance based advertising, and generally diminish the attractiveness of our service offerings to our customers. Our sales strategy for LocalClicks(SM) and our other advertising products may include broad direct sales initiatives to local and national merchants. Historically, we have primarily relied on third parties to sell our advertising products. Expanding our direct channel would be a new aspect of our business. 9 Our failure to successfully attract merchant advertisers and the increased expenses associated with direct sales could adversely affect our results of operations. If we do not introduce new or enhanced offerings to our directory platform licensees and our advertisers, we may be unable to attract and retain those customers, which would significantly impede our ability to generate revenue. We need to introduce new or enhanced products to attract and retain directory platform licensees and advertisers, and remain competitive. Our industry has been characterized by rapid technological change, changes in user and customer requirements and preferences and frequent new product and service introductions embodying new technologies. These changes could render our technology, systems and website obsolete. If we do not periodically enhance our existing products and services, develop new technologies that address sophisticated and varied consumer needs, respond to technological advances and emerging industry standards and practices on a timely and cost-effective basis and address evolving customer preferences, our products and services may not be attractive to directory platform licensees, which would significantly impede our revenue growth. In addition, if any new product or service introduction, such as our LocalClicks(SM) pay for performance advertising product, is not favorably received, our reputation and our brand could be damaged. We may also experience difficulties that could delay or prevent us from introducing new products and services. The markets for Internet content and advertising are highly competitive, and our failure to compete successfully will limit our ability to increase or retain our market share. Our failure to maintain and enhance our competitive position would limit our ability to increase or maintain our market share, which would seriously harm our business. We compete in the markets for Internet content, services and advertising. These markets are new, rapidly evolving and highly competitive. We expect this competition to intensify in the future. We compete, or expect to compete, with many providers of Internet content, information services and products, as well as with traditional media, for audience attention and advertising and sponsorship revenue. We license much of our database content under non-exclusive agreements with third-party providers which are in the business of licensing their content to many businesses, including our current and potential competitors. Many of our competitors are substantially larger than we are and have substantially greater financial, infrastructure and personnel resources than we have. In addition, many of our competitors have well-established, large, and experienced sales and marketing capabilities and greater name recognition than we have. As a result, our competitors may be in a stronger position to respond quickly to new or emerging technologies and changes in customer requirements. They may also develop and promote their products and services more effectively than we do. Moreover, barriers to entry are not significant, and current and new competitors may be able to launch new websites at a relatively low cost. We therefore expect additional competitors to enter these markets. Many of our current customers have established relationships with our current and potential competitors. If our competitors develop content or technology that is superior to ours or that achieves greater market acceptance than ours, we may not be able to develop alternative content or technology in a timely, cost-effective manner, or at all, and we may lose market share. We may have to relocate our operations, and our business may suffer as a result. On June 4, 2003, Cable & Wireless PLC announced that it had decided to cease its United States operations. We currently use Cable & Wireless' Waltham, Massachusetts facility for the hosting of our website, as well as the web-hosted platforms we provide to our directory platform licensees. We believe Cable & Wireless is attempting to exit its activities at its Waltham, Massachusetts facility. In the event that Cable & Wireless does exit its activities at this facility, we are unable to predict whether or not Cable & Wireless will be able to successfully sell or lease this facility. In the event Cable & Wireless is successful in selling or leasing this facility, we are further unable to predict whether the purchaser or lessor would provide the same or similar services as Cable & Wireless presently offers to us. If we are unable to reach an agreement with an eventual purchaser or lessor of the facility, we will be required to find a new location from which to host our website as well as the web-hosted platforms we provide to our licensees. We may incur more expense at a new facility than we presently pay to Cable & Wireless. Further, such a transition to a new location may result in an interruption to our website or the web-hosted platforms of our directory platform licensees. Such an interruption could have a material adverse effect on our cash flows and results of operations. Our lease with ePresence for our headquarters located in Westborough, Massachusetts expires in December 2003. Although we are negotiating with ePresence to extend the term of our lease, in the event we are unsuccessful in extending the term, we will be required to find a new location for our corporate headquarters. We may incur greater expense at a new location, and such a transition could result in an interruption of our daily business operations. 10 Our major shareholder is selling all or substantially all of its shares of our common stock and it will no longer have the same influence over our business or ability to enable, delay, deter or prevent a change of control or other business combination. As of September 4, 2003, ePresence beneficially owned approximately 51.9% of our common stock. At the close of this offering, ePresence will beneficially own approximately 5.7% of our common stock or, if the over-allotment option is exercised in full, none of our common stock. In addition, three of our five current directors are employees or directors of ePresence. There can be no assurance that all of these directors will choose to remain directors after the offering. Without a significant shareholder holding a majority of our common stock it may be more difficult for the Company to effect a desirable business combination or fend off a hostile bidder for control of the Company. Our business may suffer if we lose the services of our Chief Executive Officer and founder. Our future success depends to a significant extent on the continued services and effective working relationships of our senior management and other key personnel, including, but not limited to Dean Polnerow, our Chief Executive Officer and founder. Our business may suffer if we lose the services of Mr. Polnerow or other key personnel. If we are not able to attract and retain highly skilled managerial and technical personnel with Internet experience, we may not be able to implement our business model successfully. We believe that our management must be able to act decisively to apply and adapt our business model in the rapidly changing Internet markets in which we compete. In addition, we rely upon our technical employees to develop and maintain much of the technology used to provide our products and services. Consequently, we believe that our success depends largely on our ability to attract and retain highly skilled managerial and technical personnel. We may not be able to hire or retain the necessary personnel to implement our business strategy. In addition, we may need to pay higher compensation to employees than we currently expect. We may not be able to dedicate the substantial resources required to expand, monitor and maintain our internally developed systems without contracting with an outside supplier at substantial expense. We will have to expand and upgrade our technology, transaction-processing systems and network infrastructure if the volume of traffic on our website or our directory platform licensees' websites increases substantially. We could experience temporary capacity constraints that may cause unanticipated system disruptions, slower response times and lower levels of customer service. We may not be able to project accurately the rate or timing of increases, if any, in the use of our services or expand and upgrade our systems and infrastructure to accommodate these increases in a timely manner. Our inability to upgrade and expand as required could impair the reputation of our brand and our services, reduce the volume of users able to access our website, and diminish the attractiveness of our service offerings to our strategic partners, advertisers and content providers. Because we developed these systems internally, we must either dedicate substantial internal resources to monitor, maintain and upgrade these systems or contract with an outside supplier for these services at substantial expense. Our internally developed software may contain undetected errors, which could limit our ability to provide our products and services and diminish the attractiveness of our service offerings. We use internally developed, custom software to provide our products and services. This software may contain undetected errors, defects or bugs. Although we have not suffered significant harm from any errors or defects to date, we may discover significant errors or defects in the future that we may not be able to fix. Our inability to fix any of those errors could limit our ability to provide our services, impair the reputation of our brand and our services, reduce the volume of users who visit our website and diminish the attractiveness of our service offerings to our strategic partners, advertisers and content providers. If we are unable to adequately protect our intellectual property rights, our technology and information may be used by others to compete against us. Our success depends both on our internally developed technology and our third party technology. We rely on a variety of trademarks, service marks and designs to promote brand name development and recognition. We also rely on a combination of contractual provisions, confidentiality procedures and patent, trademark, copyright, trade secrecy, unfair competition, and other intellectual 11 property laws to protect the proprietary aspects of our products and services. These legal measures afford limited protection and may not prevent our competitors from gaining access to our intellectual property and proprietary information. In addition, there can be no assurance that courts will always uphold our intellectual property rights, or enforce the contractual arrangements that we have entered into to protect our proprietary technology. Any of our patents may be challenged, invalidated, circumvented or rendered unenforceable. Furthermore, we cannot assure you that any pending patent application held by us will result in an issued patent, or that if patents are issued to us, such patents will provide meaningful protection against competitors or competitive technologies. Litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets and to determine the validity and scope of our proprietary rights. Any litigation could result in substantial expense, may reduce our profits and may not adequately protect our intellectual property rights. In addition, we may be exposed to future litigation by third parties based on claims that our products or services infringe their intellectual property rights. Any litigation or claim against us, whether or not successful, could result in substantial costs and harm our reputation. In addition, intellectual property litigation could force us to do one or more of the following: cease selling or using any of our products that incorporate the challenged intellectual property, which would adversely affect our revenue; obtain a license from the holder of the intellectual property right alleged to have been infringed, which license may not be available on reasonable terms, if at all; and redesign or, in the case of trademark claims, rename our products to avoid infringing the intellectual property rights of third parties, which may not be possible and nonetheless could be costly and time-consuming. We have limited experience acquiring companies, and any acquisitions we undertake could limit our ability to manage and maintain our business, result in adverse accounting treatment and be difficult to integrate into our business. We have limited experience in acquiring businesses and have very limited experience in acquiring complementary technologies. In May 1998, we acquired MapsOnUs, and in November 2000, we acquired Envenue. In the future we may undertake additional acquisitions. Acquisitions, in general, involve numerous risks, including: * diversion of our management's attention; * future impairment of substantial goodwill, adversely affecting our reported results of operations; * inability to retain the management, key personnel and other employees of the acquired business; * inability to assimilate the operations, products, technologies and information systems of the acquired business with our business; and * inability to retain the acquired company's customers, affiliates, content providers, advertisers and key personnel. Recent legislative actions and proposed amendments to the Nasdaq listing standards will require changes in our board of directors and the implementation of other corporate governance initiatives, which may be difficult and expensive to achieve. To satisfy the director independence requirements of the provisions of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), recently adopted accounting rules, and proposed amendments to the Nasdaq listing standards, we will be required to substantially reconfigure the composition of our board of directors, audit committee, nominating committee, and compensation committee such that a majority of our board of directors and all of the members of our audit, nominating and compensation committees are considered to be independent under applicable regulatory standards. We will also be required to form a corporate governance committee. We currently have a strategy to reconfigure our board and board committees, and we do not anticipate any problems implementing this strategy, however we may not be successful in identifying qualified individuals who are deemed to be independent under applicable standards and willing to serve on our board of directors or board committees. Any failure to reconfigure our board of directors and board committees with qualified independent directors could cause us to be in violation of the Sarbanes-Oxley Act and Nasdaq listing requirements, which could have an adverse effect on our results of operations and the trading market for our common stock. To implement other required corporate governance initiatives mandated by the Sarbanes-Oxley Act, the Securities and Exchange Commission and the proposed amendments to the Nasdaq rules, we may be required to enhance our internal controls, hire additional personnel and utilize additional outside legal, accounting and advisory services, all of which would cause our general and administrative expenses to substantially increase. In order to attract and retain independent directors, we expect to pay directors' fees estimated to total at least $170,000 per year. We also expect that the premiums we pay for directors' and officers' insurance policies will increase in the future as a result of higher claim rates incurred by insurers on other insured companies in recent years. These increased costs may adversely affect our operating results in the absence of increased revenue. 12 RISKS RELATED TO THE INTERNET If the acceptance and effectiveness of Internet advertising does not become fully established, our advertising revenue will suffer. Our business model is heavily dependent upon increasing our sales, primarily through the Switchboard-powered yellow pages platforms of our licensees, of local online advertising solutions to local merchants and national advertisers. The Internet advertising market is new and rapidly evolving, and cannot yet be compared with traditional advertising media to gauge its effectiveness. As a result, demand for and market acceptance of Internet advertising is uncertain. If Internet advertising fails to gain wide acceptance and to grow from year to year, our overall revenue will be affected. Similarly, if use of Internet yellow pages by consumers does not increase, Internet yellow pages advertising will not become more attractive to local merchant and national advertisers, and our yellow pages advertising revenue will suffer. Many of our directory platform licensees' current and potential local merchant and national advertisers have little or no experience with Internet advertising and have allocated only a limited portion of their advertising and marketing budgets to Internet activities. The adoption of Internet advertising, particularly by entities that have historically relied upon traditional methods of advertising and marketing, requires the acceptance of a new way of advertising and marketing. These customers may find Internet advertising to be less effective for meeting their business needs than traditional methods of advertising and marketing. In addition, there are some software programs that limit or prevent advertising from being delivered to a user's computer. Widespread adoption of this software could significantly undermine the commercial viability of Internet advertising. If the market for Internet advertising fails to develop or develops more slowly than we expect, our revenue will suffer. There are currently no generally accepted standards for the measurement of the effectiveness of Internet advertising. Standard measurements may need to be developed to support and promote Internet advertising as a significant advertising medium. Our merchant customers may challenge or refuse to accept either our or third-party measurements of advertisement delivery. If we are sued for content distributed through, or linked to by, our website or those of our directory platform licensees, we may be required to spend substantial resources to defend ourselves and could be required to pay monetary damages. We aggregate and distribute third-party data and other content over the Internet. In addition, third-party websites are accessible through our website or those of our directory platform licensees. As a result, we could be subject to legal claims for defamation, negligence, intellectual property infringement and product or service liability. Other claims may be based on errors or false or misleading information provided on or through our website or websites of our directory licensees. Other claims may be based on links to sexually explicit websites and sexually explicit advertisements. We may need to expend substantial resources to investigate and defend these claims, regardless of whether we successfully defend against them. While we carry general business insurance, the amount of coverage we maintain may not be adequate. In addition, implementing measures to reduce our exposure to this liability may require us to spend substantial resources and limit the attractiveness of our content to users. We may need to expend significant resources to protect against online security risks that could result in misappropriation of our proprietary information or cause interruption in our operations. Our networks may be vulnerable to unauthorized access, computer viruses and other disruptive problems. Someone who is able to circumvent security measures could misappropriate our proprietary information or cause interruptions in our operations. Internet and online service providers have experienced, and may in the future experience, interruptions in service as a result of the accidental or intentional actions of Internet users, current and former employees or others. We may need to expend significant resources protecting against the threat of security breaches or alleviating problems caused by breaches. Eliminating computer viruses and alleviating other security problems may require interruptions, delays or cessation of service. We may be sued for disclosing to third parties personal identifying information without consent. Individuals whose names, addresses and telephone numbers appear in our yellow pages and white pages directories have occasionally contacted us because their phone numbers and addresses were unlisted with the telephone company. While we have not received any formal legal claims from these individuals, we may receive claims in the future for which we may be liable. In addition, if we begin disclosing to third parties personal identifying information about our users without consent or in violation of our privacy policy, we may face potential liability for invasion of privacy. 13 We may become subject to burdensome government regulation and legal uncertainties, which could limit our growth. Laws and regulations directly applicable to Internet communications, commerce and advertising are becoming more prevalent. Laws and regulations may be adopted covering issues such as user privacy, pricing, content, taxation and quality of products and services. Any new legislation could hinder the growth in use of the Internet and other online services generally and decrease the acceptance of the Internet and other online services as media of communications, commerce and advertising. Various U.S. and foreign governments might attempt to regulate our transmissions or levy sales or other taxes relating to our activities. The laws governing the Internet remain largely unsettled, even in areas where legislation has been enacted. 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 and Internet advertising and directory services. In addition, the growth and development of the market for electronic commerce may prompt calls for more stringent consumer protection laws, both in the United States and abroad, that may impose additional burdens on companies conducting business over the Internet. If we cannot protect our domain names, our ability to successfully brand Switchboard will be impaired. We currently hold various Internet domain names, including Switchboard.com and MapsOnUs.com. The acquisition and maintenance of domain names generally is regulated by Internet regulatory bodies. The regulation of domain names in the United States and in foreign countries is subject to change. Governing bodies may establish additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names. As a result, we may be unable to acquire or maintain relevant domain names in all countries in which we conduct business. This problem may be exacerbated by the length of time required to expand into any other country and the corresponding opportunity for others to acquire rights in relevant domain names. Furthermore, it is unclear the extent to which laws protecting trademarks and similar proprietary rights will be extended to protect domain names. Therefore, we may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights. We may not be able to successfully carry out our business strategy of establishing a strong brand for Switchboard if we cannot prevent others from using similar domain names or trademarks. RISKS RELATED TO THIS OFFERING Our net operating loss carry-forwards for federal and state tax purposes may be limited as a result of this offering. This offering may have the effect of limiting the usage of our existing net operating losses ("NOL's") to reduce taxes on our future income. As of December 31, 2002, our NOL carry-forwards for federal and state tax purposes were approximately $86.9 million and $86.8 million, respectively. The change in ownership of Switchboard over the past several years, as well as the consummation of this offering may cause a change in control in our company as defined by the federal income tax codes. In general, the annual usage of NOL carry-forwards following a change in control is limited to our market value on the date of the change in control, multiplied by the federal long-term tax exempt rate. As a result, our NOL usage in future periods may be limited if our market value is inadequate to support our present NOL's. The limitation of the usage of NOL's may result in additional income tax liability in future periods, which additional taxes may negatively impact future results of operations and cash flows from operating activities. See "Results of Operations- Comparison of Six Months Ended June 30, 2003 and 2002." Our common stock has only been publicly traded since March 2, 2000 and the price of our common stock has fluctuated substantially. Our common stock has been traded on a public market since March 2, 2000. Since our initial public offering, the closing sales price of our common stock has ranged from a low of $1.45 to a high of $44.25. A number of factors will continue to influence the market price for the common stock following this offering, including: * quarterly variations in our, our competitors', or our customers' results of operations; * changes in shareholder base as a result of this offering; * the announcement and introduction of new services, products or product enhancements by us or our competitors; * our ability to develop and market new and enhanced products; 14 * changes in governmental regulations affecting us or the Internet; * changes in earnings estimates or recommendations by securities analysts; and * general economic and market conditions and other factors that may be unrelated to our operating performance or the operating performance of our customers or competitors. If the trading market for our stock does not continue to develop, securities analysts may not initiate or maintain research coverage of our company and our shares, and this could further depress the market for our shares. Our common stock has recently traded at a price that is significantly higher than its average historical per share price, and your investment in our common stock could suffer a decline in value. The average closing price of our common stock since our initial public offering has been $5.75 per share. For the last six (6) months, our common stock has traded at an average closing price of $6.29 per share. During this time, the sale prices of our common stock ranged from a low closing price of $2.80 per share to a high closing price of $12.31 per share and, on October 20, 2003, our common stock closed at a closing price $7.60 per share. A number of factors, including actual and anticipated variations in our operating results, results of our competitors, and general economic and market conditions could cause the market price of our common stock to fluctuate or decline significantly in the future. A large number of shares may be sold into the market following this offering, which may cause the price of our common stock to decline. After this offering, 19,000,173 shares of our common stock will be outstanding based upon shares outstanding as of September 4, 2003. The 8,815,171 shares we and certain stockholders are selling in this offering, and the 1,322,250 shares being offered by the selling stockholders if the underwriters exercise their over-allotment option in full, will be freely tradable, without restriction or further registration, under the federal securities laws unless purchased by our affiliates. Previously, the shares offered were subject to restrictions regarding sale without registration with the SEC. This represents a significant increase in number of shares eligible for sale without registration, which could cause downward pressure on the trading price of our common stock. In addition, our largest stockholder, ePresence, has announced its intention to distribute to its stockholders or sell, in a public offering or otherwise, up to all of its shares of our common stock not sold by ePresence in this offering. Certain of our stockholders, including management, holding an aggregate of [ ] shares after this offering, assuming the underwriters do not exercise their over-allotment option, have agreed not to sell their shares of stock for up to [ ] days after the completion of this offering. Thomas Weisel Partners LLC may waive any of these lock-up restrictions prior to the expiration of the lock-up period without prior notice. Thomas Weisel Partners LLC has no current intention to waive any of these lock-up restrictions. If, however, Thomas Weisel Partners LLC elects to waive such restrictions, all of these shares would be available for sale. Of the shares of common stock that will be available for sale after the expiration of the lock-up period, or upon any election of Thomas Weisel Partners LLC to waive the lock-up restrictions, [ ] shares will be subject to the volume restrictions of Rule 144 under federal securities laws because they are held by our affiliates. In addition, AOL owns 1,496,260 shares, or 7.9% of our common stock which may be eligible for sale without volume or other limitations of Rule 144 either because AOL is entitled to cause registration of its shares or because it is not an affiliate and therefore not subject to the volume and other limitations of Rule 144. If our common stockholders sell substantial amounts of common stock in the public market, or if the market perceives that these sales may be about to occur, the market price of our common stock could fall. Our stock price could be volatile, which could result in substantial losses for investors purchasing shares in this offering and expose us to costly securities class action litigation. The trading price of our common stock is likely to be volatile. The stock market in general, and the market for technology and Internet-related companies in particular, has experienced extreme volatility in recent years. This volatility has often been unrelated to the operating performance of particular companies. In the past, securities class action litigation has often been brought against a company following periods of volatility in the market price of its securities. Due to the potential volatility of our stock price, we may be the target of securities litigation, which could result in substantial costs and divert management's attention and resources. 15 Purchasers in this offering may experience additional dilution upon the exercise of outstanding options to purchase our common stock. As of September 4, 2003, exercisable options to purchase a total of 3,279,827 shares of our common stock were outstanding under our stock option plans, with a weighted-average per share exercise price of $4.73. The exercise of all of these outstanding options would dilute the ownership percentage of purchasers in this offering by approximately 6.8% and may cause the market price of our common stock to decline. Our executive officers and directors, and their affiliates, own a significant percentage of our stock, and as a result, the trading price for our shares may be depressed and these stockholders can take actions that may be adverse to your interests. Following this offering, our executive officers and directors, and persons and entities affiliated with our directors, will beneficially own approximately 14.3% of our common stock or approximately 8.0% if the underwriters exercise their over-allotment option in full. These stockholders, acting together, may have the ability to significantly influence all matters requiring approval by our stockholders, including the election and removal of directors and any proposed merger, consolidation or sale of all or substantially all of our assets. In addition, they could dictate the management of our business and affairs. A significant concentration of share ownership can adversely affect the trading price for our common stock because investors often discount the value of stock in companies that have controlling stockholders. Furthermore, the concentration of ownership in our company could delay, defer or prevent a merger or consolidation, takeover or other business combination that could be favorable to you. Anti-takeover provisions in our charter documents and Delaware law could prevent a potential acquiror from buying our stock. Our certificate of incorporation and bylaws contain provisions that could delay or prevent a change in control of our company, including provisions that: * authorize the issuance of preferred stock that can be created and issued by the board of directors without prior stockholder approval, commonly referred to as "blank check" preferred stock, with rights senior to those of common stock; * prohibit stockholder actions by written consent; and * provide for a classified board of directors. In addition, we are governed by the provisions of Section 203 of Delaware General Corporation Law. These provisions may prohibit stockholders owning 15% or more of our outstanding voting stock from merging or combining with us. These and other provisions in our certificate of incorporation and bylaws, and under Delaware law, could discourage potential acquisition proposals, delay or prevent a change in control or management or reduce the price that investors might be willing to pay for shares of our common stock in the future. 16 INFORMATION REGARDING FORWARD LOOKING STATEMENTS This prospectus includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are subject to a number of risks and uncertainties. All statements, other than statements of historical fact, included in this prospectus regarding our strategy, future operations, financial position, estimated revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this prospectus, the words "will", "believe", "likely", "anticipate", "intend", "estimate", "expect", "project" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We cannot guarantee future results, levels of activity, performance or achievements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or strategic alliances. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including the risks described in "Risk Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this prospectus. The forward-looking statements provided by Switchboard in this prospectus represent Switchboard's estimates as of the date this prospectus is filed with the SEC. We anticipate that subsequent events and developments will cause our estimates to change. However, while we may elect to update our forward-looking statements in the future we specifically disclaim any obligation to do so. Our forward-looking statements should not be relied upon as representing our estimates as of any date subsequent to the date this report is filed with the SEC. This prospectus also contains estimates made by independent parties and by us relating to market size and growth and other industry data. These estimates involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the accuracy of the estimates made by third parties. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us. 17 USE OF PROCEEDS Assuming a public offering price of $7.60 per share, we expect to receive net proceeds of approximately $60,000 from the sale of 100,000 shares of common stock after deducting underwriting commissions and discounts and estimated expenses. We intend to use our proceeds from this offering primarily to pay for the expenses of this offering and for general corporate purposes. We will not receive any of the proceeds from the sale of shares by the selling stockholders. 18 PRICE RANGE OF COMMON STOCK Our common stock has traded on the Nasdaq National Market under the symbol "SWBD" since our initial public offering on March 2, 2000. Prior to that time, there was no public market for our common stock. The following table sets forth, for the periods indicated, the high and low closing prices per share for our common stock as reported by the Nasdaq National Market:

On October 20, 2003, the last reported sale price of our common stock as reported on the Nasdaq National Market was $7.60 per share. As of September 4, 2003, there were approximately 113 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders. DIVIDEND POLICY We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and therefore do not anticipate paying any cash dividends in the foreseeable future. 19 CAPITALIZATION (in thousands, except share and per share data) The following table sets forth our capitalization at June 30, 2003 on an actual basis and on an as adjusted basis to give effect to the receipt of the estimated net proceeds from the sale of 100,000 shares of common stock offered by us in this offering at an assumed public offering price of $7.60 per share (the last sale price of our common stock on the Nasdaq National Market on October 20, 2003), after deducting underwriting discounts and commissions and estimated offering costs. The information below should be read in conjunction with our consolidated financial statements and the notes to those statements appearing elsewhere in this prospectus.

20 DILUTION If you invest in our common stock your interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the net tangible book value per share of our common stock after this offering. Our pro forma net tangible book value as of June 30, 2003 was approximately $51.8 million, or $2.74 per share of common stock outstanding. Net tangible book value per share represents the amount of total tangible assets less total liabilities, divided by the shares of common stock outstanding as of June 30, 2003. After giving effect to the issuance and sale of the 100,000 shares of common stock offered by us in this offering and after deducting the underwritings discounts and estimated offering expenses payable by us, assuming a public offering price of $7.60 per share, our as adjusted net tangible book value as of June 30, 2003 would have been $51.8 million, or $2.73 per share. This represents an immediate decrease in adjusted net tangible book value of $0.01 per share to existing stockholders and an immediate dilution of $4.87 per share to new investors. The following table illustrates this per share dilution: Assumed public offering price per share................................... $ 7.60 Pro forma net tangible book value per share as of June 30, 2003........ $ 2.74 Decrease in net tangible book value per share attributable to new investors....................... (0.01) ------ Pro forma adjusted net tangible book value per share after this offering................................. 2.73 ------ Dilution in net tangible book value per share to new investors............ $ 4.87 ======

21 SELECTED CONSOLIDATED FINANCIAL DATA (In thousands except per share data) We have derived the following consolidated selected financial data as of December 31, 2001 and 2002 and for each of the years ended December 31, 2000, 2001 and 2002 from our audited consolidated financial statements appearing elsewhere in this prospectus, which have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. We have derived the consolidated selected financial data as of December 1998, 1999 and 2000 and for each of the years ended December 31, 1998 and 1999 from our audited consolidated financial statements not included in this prospectus which have been prepared in accordance with U.S. GAAP. The selected consolidated financial data as of June 2002 and June 30, 2003, and for the six months ended June 30, 2002 and 2003 are derived from our unaudited consolidated financial statements appearing elsewhere in this prospectus and prepared in accordance with U.S. GAAP. Our unaudited consolidated financial statements include, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position and results of operations of our company for such periods. The results of operations for the six months ended June 2002 and June 30, 2003 are not necessarily indicative of the results of the whole year. You should read the selected consolidated financial data together with the section of this prospectus entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements included elsewhere in this prospectus.

23 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with our consolidated financial statements and the related notes appearing at the end of this prospectus. Our discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under "Risk Factors" and elsewhere in this prospectus. Overview In February 1996 when we commenced operations, we derived our revenue principally from the sale of national banner and site sponsorship advertising on our directory website, www.switchboard.com. We now primarily derive revenue from advertisements that are placed in the Switchboard-powered directory platforms of our licensees, as well as merchant advertisers on our own website, www.switchboard.com. Net merchant network revenue includes revenue from various licensing agreements with our directory platform licensees. These agreements involve, generally, (1) a setup fee for engineering work to develop a web-hosted platform for our licensees which looks and feels like the licensees' own website and includes our searching functionality, and (2) a royalty in the form of a fixed fee per merchant based on the number of merchant advertisements promoted in their platform, or a percentage of revenue generated from those merchant advertisements. Net merchant network revenue also includes revenue from running priority placement, local performance based, and content targeted advertising in the Switchboard.com yellow pages directory, and building and hosting websites for local merchant advertisers. In addition, included as an offset to merchant network revenue is consideration given to customers, if any, for which the benefits of such consideration are not separately identifiable from the revenue obtained from those customers. During the six months ended June 30, 2003, approximately 88.5% of our net revenue was derived from our local merchant network as compared to 87.9% in the six months ended June 30, 2002. Our largest and most significant directory platform licensee is AOL. We paid AOL $13.0 million in December 2000 and $2.0 million in April 2002, and issued 746,260 shares of our common stock to AOL. In October 2003, we amended our agreement with AOL. The October 2003 amendment, among other things, extended the term of the agreement for an additional year, and provides that we will receive $4.8 million annually from AOL, payable in monthly increments of $400,000, in exchange for providing, maintaining and customizing the AOL yellow pages directory platform and inclusion of current AOL merchants in our yellow pages platform. In addition, the Agreement creates the opportunity for both parties to share in revenue generated from advertising products that combine both AOL's and Switchboard's consumer audience. The revenue sharing arrangement, based on a percentage of AOL merchant subscription revenue, that was previously in effect has been eliminated. AOL and Switchboard are now able to sell advertising products offering both national advertisers and local merchants access to the combined consumer audience of both AOL and Switchboard yellow pages. As part of the consideration for the $4.8 million annual fee, if requested by AOL, we are obligated to provide AOL with up to 3,000 hours of engineering services per fiscal quarter in order to customize and further AOL's directory platform. In addition, AOL may carry-over up to 1,000 of its unused engineering hours into the next quarter. Revenue attributable to any unused hours that are carried forward into the following fiscal quarter will be valued using our standard hourly rates for engineering services and will be deferred until the hours carried forward are either used or the right to use them expires. We will bill AOL on a time and materials basis for any hours of engineering services in excess of the 3,000 hours per quarter and recognize this revenue during the period in which the engineering services are delivered. In the six months ended June 30, 2003, AOL consulting and service fees totaled $1.3 million. In the six months ended June 30, 2002, AOL consulting and service fees totaled $547,000. Revenue recognized from AOL, including consulting and service fees, was $3.4 million, or 47.0% of net revenue, for the six months ended June 30, 2003. Revenue recognized from AOL, net of amortization of consideration given to AOL and including consulting and services fees, was $1.3 million, or 27.0% of net revenue, for the six months ended June 30, 2002. We anticipate that AOL will continue to represent a significant percentage of our revenue throughout the remainder of 2003 and will be a material component of our overall business. As of September 4, 2003, AOL owns approximately 1,496,260 shares, or 7.9% of our common stock. We also continue to generate revenue from the sale of national advertising and site sponsorship revenue on white and yellow pages, as well as maps pages, across both www.switchboard.com and the websites of several directory platform licensees. Such revenue is derived from banner advertisements, sponsorships, direct electronic mail-based promotions and other forms of national advertising that are sold on either a fixed fee, cost per thousand impressions or cost per action basis. During the six months ended June 30, 2003, approximately 11.5% of our net revenue was derived from the sale of national advertising and site sponsorships, as compared to 12.1% in the six months ended June 30, 2002. 24 Our cost of revenue consists primarily of expenses paid to third parties under data licensing and website creation and hosting agreements and search engine placement optimization fees, as well as other direct expenses incurred to maintain the operations of our website as well as the web-hosted platforms of our licensees. These direct expenses consist of data communications expenses related to Internet connectivity charges, salaries and benefits for operations personnel, equipment costs and related depreciation, costs of running our data centers, which include rent and utilities, and a pro rata share of occupancy and information system expenses. Cost of revenue also includes an allocation of salaries and benefits for employees, as well as expenses resulting from external consultants, directly associated with the delivery of billable engineering and other services. Cost of revenue as a percentage of revenue has varied in the past, primarily because the amount of revenue recognized has varied and has been spread over relatively fixed cost of revenue. Our sales and marketing expense consists primarily of employee salaries and benefits, costs associated with channel marketing programs, collateral production expenses, third-party commission costs, public relations, market research, provision for bad debts and a pro rata share of occupancy and information system expenses. Our research and development expense consists primarily of employee salaries and benefits, fees for outside consultants and related costs associated with the development of new services and features on our web-hosted directory platform, the enhancement of existing products, quality assurance, testing, documentation and a portion of occupancy and information system expenses based on employee headcount. Our general and administrative expense consists primarily of employee salaries and benefits and other personnel-related costs for executive and financial personnel, as well as legal expenses, directors and officers insurance and accounting costs, and a portion of occupancy and information system expense based on employee headcount. We have experienced substantial net losses. As of June 30, 2003, we had an accumulated deficit of $108.2 million. These net losses and accumulated deficit resulted from insufficient revenue to cover the significant costs incurred in the development of our web-hosted directory platform and the establishment of our corporate infrastructure and organization. Significant Relationship In December 2000, we entered into a Directory Agreement with AOL to develop a new directory and local advertising platform and product set to be featured across specified AOL properties (the "Directory Platform"). In November 2001, April 2002, August 2002, November 2002 and October 2003, certain terms of the agreement were amended. Prior to the October 2003 amendment of the Directory Agreement, we shared with AOL specified directory advertisement revenue. In general, we received a majority of the first $12.0 million of such directory advertisement revenue, less approximately $1.0 million of billable engineering revenue earned from AOL after June 30, 2002, and receive a lesser share of any additional directory advertisement revenue. We paid AOL and recorded an asset of $13.0 million at the signing of the Directory Agreement. Following the incorporation of the Directory Platform on the AOL.com, AOL Service and Digital City properties ("AOL Roll-In") in January 2002, we recorded a second asset and a liability related to future payments of $13.0 million. In April 2002, we established an additional asset and liability of $1.0 million and paid $2.0 million upon the execution of the April 2002 amendment. Under the April 2002 amended agreement, we were scheduled to make six additional quarterly payments of $2.0 million each, replacing the $13.0 million originally owed upon the AOL Roll-In. The August 2002 amendment, among other things, eliminated the $12.0 million in remaining additional payments established in the April 2002 amendment. The November 2002 amendment, among other things, provided for the delivery of administrative services to AOL for the management of merchants who signed up for advertising in the AOL yellow pages using a self-service tool that we created for AOL. We no longer provide these administrative services to AOL. AOL committed to pay us at least $2.0 million in consulting or service fees over the term of the Directory Agreement under a payment schedule which ended in September 2002, of which AOL has paid all $2.0 million and we have delivered all $2.0 million in services to AOL. Prior to the October 2003 amendment of the Directory Agreement, we were required to provide up to 300 hours of engineering services per month to AOL at no charge, if requested by AOL for the term of the agreement. These 300 hours were provided to support the Directory Platform, from which we shared in directory advertising revenue over the term of the agreement. Any engineering services provided by us in excess of 300 hours per month were charged to AOL on a time and materials basis. AOL typically exceeded these 300 hours each month. In the six months ended June 30, 2003, AOL consulting and service fees totaled $1.3 million. In the six months ended June 30, 2002, AOL consulting and service fees totaled $547,000. In October 2003, we amended and restated our agreement with AOL. Among other things, the October 2003 amendment provides that we will receive $4.8 million annually from AOL, payable in monthly increments of $400,000, in exchange for providing, maintaining and customizing the AOL yellow pages Directory Platform and including existing AOL local advertisers in our 25 Switchboard.com directory. In addition, the October 2003 amendment creates the opportunity for both parties to share in revenue generated from advertising products that provide local and national merchant advertisers with access to the combined consumer audience of both AOL and Switchboard yellow pages. The revenue sharing arrangement, based on percentage of AOL merchant subscription revenue, that was previously in effect has been eliminated. Under the October 2003 amendment, Switchboard and AOL will be able to sell advertising products offering national and local advertisers the combined distribution, or consumer audience, of both the AOL and Switchboard yellow pages. Switchboard and AOL will share in resulting revenue associated with the sale of the combined products. As part of the consideration for the $4.8 million annual fee, if requested by AOL, we are obligated to provide AOL with up to 3,000 hours of engineering services during each fiscal quarter in order to customize the Directory Platform. Of the 3,000 hours we will provide to AOL each fiscal quarter, AOL has the right to carry forward up to 1,000 unused hours into the following fiscal quarter. Revenue attributable to any unused hours that are carried forward into the following fiscal quarter will be valued using our standard hourly rates for engineering services and will be deferred until the hours carried forward are either used or the right to use them expires. We will bill AOL on a time and materials basis for any hours for engineering services provided in excess of the 3,000 we are required to provide to AOL, and recognize this revenue during the period in which the engineering services are provided. The October 2003 amended Directory Agreement has an initial term of five years, expiring in December 2005, with the option to extend by mutual agreement of the parties. In the event that the Agreement is terminated pursuant to the terms of the Agreement, the parties will begin a "Wind-Down Period" for a period of time to be determined by AOL, up to a maximum of three years from the date of termination. During the Wind-Down Period, we will continue to provide AOL with directory platform services, and AOL shall pay us a monthly fee of $250,000 (reduced from $400,000 per month) and shall also pay us for any engineering hours in excess of 300 hours per month. During the Wind-Down Period, the Company is no longer required to provide AOL with 3,000 hours of engineering services per quarter. In connection with entering into the Directory Agreement, in December 2000, we issued to AOL 746,260 shares of our common stock, which were restricted from transfer until the AOL Roll-In, which occurred on January 2, 2002. We also agreed to issue to AOL an additional 746,260 shares of common stock if the Directory Agreement continued after two years and a further 746,260 shares of common stock if the Directory Agreement continued after three years. Pursuant to the April 2002 amendment, the requirement to issue additional shares upon the two and three-year continuations was eliminated. If we renew the Directory Agreement with AOL for at least an additional four years after the current term, we agreed to issue to AOL a warrant to purchase up to 721,385 shares of common stock at a per share purchase price of $4.32. The $13.0 million paid and the value of the stock issued upon the signing of the Directory Agreement was amortized on a straight-line basis over the original four-year estimated life of the agreement. As of December 31, 2001, the remaining unamortized amounts of $11.7 million were written down to zero as a result of an impairment analysis as of December 31, 2001. In 2002, we recorded amortization based upon the remaining net book value of our AOL assets established upon the AOL Roll-In and April 2002 amendment on a straight-line basis over the remaining term of the amended agreement. As a result of the elimination in the August 2002 amendment of the remaining $12.0 million owed to AOL, an adjustment to amortization of consideration given to a customer of $482,000 was recorded in August 2002, offsetting amortization recorded in the period. Amortization of AOL assets totaled $2.0 million in the six months ended June 30, 2002. There was no amortization of AOL assets in the six months ended June 30, 2003. Throughout the remaining initial term of the amended agreement, we will no longer record amortization of consideration given to AOL as these assets are now fully amortized and no further consideration is due AOL. Amortization of assets related to AOL has been reflected as a reduction of revenue in accordance with EITF 01-9. Revenue recognized from AOL was $3.4 million, or 47.0% of net revenue, for the six months ended June 30, 2003. Revenue recognized from AOL, including amortization of consideration given to AOL, was $1.3 million, or 27.0% of net revenue, for the six months ended June 30, 2002. Net amounts due from AOL included in accounts receivable at June 30, 2003 and December 31, 2002 were $1.1 million and $549,000, respectively. As of June 30, 2003, AOL beneficially owned 7.9% of our outstanding common stock. Critical Accounting Policies and Estimates We have identified the policies below as critical to the understanding of our results of operations. Note that our preparation of this prospectus on Form S-1 requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition, bad debts, investments, intangible assets, compensation expenses, third-party commissions, restructuring costs, contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments 26 about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from those estimates. Critical accounting polices are those policies that are reflective of significant judgments and uncertainties and potentially result in materially different results under different assumptions and conditions. We believe our most critical accounting policies are as follows: Revenue Recognition We generate our revenue primarily from merchant advertisement placements promoted in the Switchboard-powered directories of our licensees, as well as those placed in our own online yellow pages directory. Generally, revenue is recognized as services are provided, so long as no significant obligations remain and collection of the resulting receivable is probable. We believe that we are able to make reliable judgments regarding the creditworthiness of our customers based upon historical and current information available to us. There can be no assurances that our payment experience with our customers will be consistent with past experience or that the financial condition of these customers will not decline in future periods, the result of which could be our failure to collect invoiced amounts. Some of these amounts could be material, resulting in an increase in our provision for bad debts. In addition to bad debts arising from the failure to collect monies due from our customers for products and services delivered, under the Directory Agreement we previously shared a portion of bad debts incurred by AOL. Prior to the October 2003 amendment of the Directory Agreement, the royalty we received from AOL was primarily based upon revenue recognized by AOL in the period, less any commissions paid on such revenue and any amounts written off by AOL as bad debt. For periods prior to the fiscal quarter ended June 30, 2003, we established and maintained a sales allowance to reserve for our estimate of our portion of AOL's future bad debts associated with revenue recognized during the period based upon AOL's historical bad debt experience. We had previously identified our estimation of our portion of AOL's bad debts as a critical accounting policy. Beginning in April 2003 and until the October 2003 amendment of the Directory Agreement, we recognized royalty revenue from AOL based upon our percentage of directory revenue that was both earned and collected by AOL. Given that we recorded royalty revenue during this period from AOL based upon revenue collected by AOL, there was no longer a need for us to estimate and provide for a sales allowance for AOL. Further, the October 2003 amendment eliminates the sharing of revenue based upon collected revenue. Future calculation of revenue sharing from sales of advertising products that combine the consumer audience of both AOL and Switchboard yellow pages will not contemplate uncollectable amounts. Therefore, we no longer consider our estimation of our portion of AOL's bad debts to be a critical accounting policy. Risks, Concentrations and Uncertainties We invest our cash and cash equivalents primarily in deposits, money market funds and investment grade securities with financial institutions. We have not experienced any material realized losses to date on our invested cash. A potential exposure is a concentration of credit risk in accounts receivable. We maintain reserves for credit losses and, to date, such losses have been within our expectations. These expectations are based on historical experience, analysis of information currently available to us with respect to our customer's financial position, as well as various other factors. While we believe we can make reliable estimates of these matters, it is possible that these estimates may change in the near future due, for example, to changes in market conditions, other economic factors or issues specific to individual customers. A change in estimates could negatively affect our results of operations. Accounting for Stock-Based Compensation In January 2003, FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment of FASB Statement No. 123" ("SFAS 148"), which provides alternative methods of transition for a voluntary change to a fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require prominent disclosures in annual financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. SFAS 148 is effective for us for the year ended December 31, 2002. We have determined that we will continue to account for stock-based compensation for employees under APB 25, and elect the disclosure-only alternative under SFAS 123 and provide the enhanced disclosures as required by SFAS 148. We are required in the preparation of the disclosures required under SFAS 148 to make certain estimates when ascribing a value to stock options granted during the year. These estimates include, but are not limited to, an estimate of the average time option grants will be outstanding before they are ultimately exercised and converted into common stock and an estimate of the future volatility in the market value of our common stock over that period in which the option grants are outstanding. These estimates are integral to the valuing of these option grants. Any changes in these estimates may have a material effect on the value ascribed to these option grants. This would in turn affect the amortization used in the disclosures we make under SFAS 148, which could be 27 material. Further, the rules governing accounting for option grants continue to evolve. Should we be required in future periods to include amortization of stock options, such amortization would have a material adverse effect on our results of operations. Recently Issued Accounting Pronouncements In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity ("SFAS No. 150"). SFAS No. 150 affects the issuer's accounting for three types of freestanding financial instruments. SFAS No. 150 also requires disclosures about alternative ways of settling the instruments and the capital structure of entities, all of whose shares are mandatorily redeemable. This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities, for which it is effective for the first fiscal period beginning after December 31, 2003. It is to be implemented by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of the statement and still existing at the beginning of the interim period of adoption. Restatement is not permitted. The adoption of SFAS No. 150 did not have a material impact on our consolidated results of operations, financial position or cash flows. In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46) to clarify the conditions under which assets, liabilities and activities of another entity should be consolidated into the financial statements of a company. FIN 46 requires the consolidation of a variable interest entity by a company that bears the majority of the risk of loss from the variable interest entity's activities, is entitled to receive a majority of the variable interest entity's residual returns, or both. The provisions of FIN 46, required to be adopted in fiscal 2004, are not expected to have a material impact on our financial position or results of operations. In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others" (FIN 45). FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurement provisions of the interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002 and the disclosure requirements in this interpretation are effective for financial statements of interim or annual periods ending after December 15, 2002. The adoption of FIN 45 did not have a material impact on our financial position or results of operations. In November 2002, the EITF finalized its consensus on EITF Issue 00-21, "Revenue Arrangements with Multiple Deliverables" (EITF 00-21), which provides guidance on the timing and method of revenue recognition for sales arrangements that include the delivery of more than one product or service. EITF 00-21 is effective prospectively for arrangements entered into in fiscal periods beginning after June 15, 2003. Under EITF 00-21, revenue must be allocated to all deliverables regardless of whether an individual element is incidental or perfunctory. The adoption of EITF 00-21 did not have a material impact on our financial position, results of operations or cash flows. In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS 146"), which addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies EITF Issue No. 94-3 "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)". SFAS 146 was effective for Switchboard on January 1, 2003. SFAS 146 creates a model whereby a liability is recognized at its fair value in the period in which it is incurred, rather than at the date of commitment to a plan. The adoption of SFAS 146 did not have a material impact on our financial position, results of operations or cash flows. In January 2002, the EITF issued Issue No. 01-14 "Income Statement Characterization of Reimbursements Received for "Out-of-Pocket" Expenses Incurred" ("EITF 01-14"), relating to the accounting for reimbursements received for out-of-pocket expenses. In accordance with EITF 01-14, reimbursements received for out-of-pocket expenses incurred should be characterized as revenue in the statement of operations. EITF 01-14 is effective for all financial reporting periods beginning after December 15, 2001 and upon adoption, there is a requirement to present comparative prior period financial information. The adoption of EITF 01-14 did not have an impact on our financial position, results of operations or cash flows. 28 Results of Operations Comparison of Six Months Ended June 30, 2003 and 2002 The following table presents certain consolidated statement of operations information stated as a percentage of total net revenue:

Net Revenue. Net revenue increased 46.7% to $7.3 million for the six months ended June 30, 2003, compared with $5.0 million for the corresponding period in 2002. The increases for the six months ended June 30, 2003 consisted primarily of an increase in net merchant network revenue, as well as an increase in national advertising and site sponsorship revenue. Net merchant network revenue increased 47.6% to $6.5 million for the six months ended June 30, 2003, compared with $4.4 million for the corresponding period in 2002. The increase in net merchant network revenue for the six months ended June 30, 2003 was primarily due to a reduction in amortization of consideration given to AOL as a result of the elimination of such amortization in August 2002 upon the amendment to the Directory Agreement with AOL. Amortization of consideration given to AOL was $2.0 million in the six months ended June 30, 2002. There was no amortization of consideration given to AOL in the six months ended June 30, 2003. The increase in net merchant network revenue in the six months ended June 30, 2003 was also attributable to an increase of $676,000 in engineering and other services revenue, as well as additional licensing revenue from new directory platform licensees. Offsetting these increases in the six-month period ended June 30, 2003 was a decrease of $690,000 in licensing revenue from AOL, primarily as a result of significantly reduced nationally oriented merchant advertising sales by AOL, as well as a reduction in the percentage by which we share in directory revenue generated by AOL under the Directory Agreement based upon the achievement of a predetermined cumulative revenue milestone. National advertising and site sponsorship revenue increased 40.0% to $843,000 for the six months ended June 30, 2003, compared with $602,000 for the corresponding period in 2002. The increase in national advertising and site sponsorship revenue for the six months ended June 30, 2003 resulted primarily from the addition of new customers and an increase in revenue from existing customers due to additional advertising placements on our site, as well as an increase in traffic to our website. Cost of Revenue. Cost of revenue decreased 25.1% to $1.5 million, or 20.8% of net revenue, in the six months ended June 30, 2003, compared with $2.0 million, or 40.7% of net revenue, for the corresponding period in 2002. Cost of 29 revenue decreased for the six months ended June 30, 2003 primarily as a result of a decrease of $201,000 in website creation and hosting fees in connection with our merchant services programs, a decrease of $197,000 in expenses resulting from a lower margin merchant services project performed for a directory platform licensee in 2002 and decreases in the cost of third-party data and data communication fees. These decreases were offset in part by an increase of $150,000 in employee salaries and benefits associated with the delivery of engineering services, which are classified as cost of revenue, and an increase in search engine placement optimization fees. Gross Profit. Gross profit increased 95.9% to $5.8 million, or 79.2% of net revenue, in the six months ended June 30, 2003, compared with $3.0 million, or 59.3% of net revenue, for the corresponding period in 2002. The increase in gross profit dollars and percentage for the six months ended June 30, 2003 was primarily due to the reduction in the amortization of consideration given to AOL discussed above. Sales and Marketing. Sales and marketing expenses decreased 40.6% to $1.5 million for the six months ended June 30, 2003, compared with $2.6 million for the corresponding period in 2002. As a percentage of net revenue, sales and marketing expenses were 20.9% for the six months ended June 30, 2003, as compared with 51.6% for the corresponding period in 2002. The decrease for the six months ended June 30, 2003 was primarily related to a decrease of $407,000 in merchant program expenses, a reduction of expense of $200,000 resulting from an amount collected from AOL related to the final settlement of our prior agreement with AOL, which was terminated in March 1999, a decrease of $131,000 in public relations expenses and a decrease in employee compensation and benefits. Research and Development. Research and development expenses decreased 20.8% to $2.2 million for the six months ended June 30, 2003, compared with $2.8 million for the corresponding period in 2002. As a percentage of net revenue, research and development expenses were 30.6% for the six months ended June 30, 2003, compared with 56.6% for the corresponding period in 2002. The decrease for the six months ended June 30, 2003 was due primarily to a decrease of $207,000 in outside consulting fees, a decrease of $158,000 in salaries and benefits associated with the delivery of engineering services, which are classified as cost of revenue, a decrease of $112,000 in other employee compensation and benefits and a decrease in facilities expense. General and Administrative. General and administrative expenses increased 27.7% to $1.8 million for the six months ended June 30, 2003, compared with $1.4 million for the corresponding period in 2002. As a percentage of net revenue, general and administrative expenses were 25.0% for the six months ended June 30, 2003, compared with 28.7% for the corresponding period in 2002. The increase for the six months ended June 30, 2003 was primarily due to increases in professional services, employee compensation and benefits and unallocated occupancy costs, offset in part by a decrease in insurance expense. Other Income, Net. Other income decreased 75.9% to $354,000 for the six months ended June 30, 2003, compared with $1.5 million for the corresponding period in 2002. The decrease in the six months ended June 30, 2003 was due primarily to a decrease in interest income earned as a result of a decline in interest rates, as well as a decrease in realized gains on investments. Income Taxes. In accordance with generally accepted accounting principles, we provide for income taxes on an interim basis using our estimated annual effective income tax rate. We anticipate that we will not have a significant tax provision in 2003 due to utilization of net operating loss carry-forwards. However, we do anticipate that we will be subject to an alternative minimum tax. Accordingly, we have recorded income tax expense of $12,000 in the six months ended June 30, 2003. As of December 31, 2002, we had net operating loss carry-forwards for federal and state tax purposes of approximately $86,874,000 and $86,848,000, respectively. The federal and state net operating loss carry-forwards will begin to expire in 2012 and 2002, respectively. Ownership changes resulting from our issuance or sales of capital stock may limit the amount of net operating loss carry-forwards that can be utilized by us annually to offset future taxable income. In general, the annual usage of net operating loss carry-forwards is limited to a company's market value on the date of the change in control, multiplied by the federal long-term tax exempt rate. We believe that as a result of this offering, such a limitation may occur. See "Risk Factors - Risks Related to this Offering - Our net operating loss carry-forwards for federal and state tax purposes may be limited as a result of this offering." Net Income (Loss). Our net income increased to $583,000 in the six months ended June 30, 2003, from a net loss of $2.4 million for the corresponding period in 2002. As of June 30, 2003, our accumulated deficit totaled $108.2 million. 30 Comparison of Years Ended December 31, 2002, 2001 and 2000 The following table presents certain consolidated statement of operations information stated as a percentage of total net revenue:

Revenue. Total net revenue was $11.7 million, $9.3 million and $19.9 million in 2002, 2001 and 2000, respectively, representing an increase of $2.5 million, or 26.6%, from 2001 to 2002, and a decrease of $10.6 million, or 53.4%, from 2000 to 2001. The increase in net revenue in 2002 consisted primarily of an increase in net merchant network revenue, offset in part by a decrease in national advertising and site sponsorship revenue. The decrease in net revenue in 2001 when compared to 2000 consisted primarily of decreases in national advertising revenue and net merchant network revenue. Net merchant network revenue was $10.3 million, $6.2 million and $8.3 million in 2002, 2001 and 2000, respectively, representing an increase of $4.1 million, or 66.3%, from 2001 to 2002, and a decrease of $2.1 million, or 24.9%, from 2000 to 2001. The increase in net merchant network revenue in 2002 was primarily due a reduction in amortization of consideration given to AOL of $2.0 million as a result of the elimination of such amortization in August 2002 upon the amendment to the Directory Agreement with AOL. The increase in 2002 was also attributable to increases in merchant licensing revenues from AOL as well as our other existing directory platform licensees offset in part by a decrease in local merchant website hosting services. The decrease in net merchant network revenue from 2000 to 2001 was due primarily to an increase of $3.6 million in amortization of consideration given to AOL associated with the Directory Agreement and decreases in website hosting and other services revenue, offset in part by increases in licensing and engineering services revenue from AOL as well as revenue generated from both new and existing directory platform licensees. National advertising and site sponsorship revenue was $1.4 million, $3.1 million and $11.6 million in 2002, 2001 and 2000, respectively, representing a decrease of $1.6 million, or 53.7%, from 2001 to 2002, and a decrease of $8.6 million, or 73.6%, from 2000 to 2001. The decreases in national advertising and site sponsorship revenue in 2002 and 2001 resulted from a decrease in both the number of advertisers on the site, as well as the per impression fee charged to those customers. We attribute these decreases to a decline in demand for Internet advertising services as well as the overall state of the U.S. economy. There was no revenue in 2002 generated from concurrent transactions, in which we received promotion or marketing assets in exchange for promotion on our website and inclusion in e-mail distributions to our user base. We do not expect to incur revenue from concurrent transactions in 2003. Revenue from concurrent transactions was 9.5% and 28.0% of net revenue in 2001 and 2000, respectively. 31 In the year ended December 31, 2002, AOL accounted for 41.8% of net revenue. In the year ended December 31, 2001, one customer accounted for 11.6% of net revenue. In the year ended December 31, 2000, one customer accounted for 16.1% of net revenue. Cost of Revenue. Cost of revenue was $3.7 million, $3.5 million and $3.5 million in 2002, 2001 and 2000, respectively. Cost of revenue increased $226,000, or 6.4%, in 2002 and remained relatively flat in 2001, when compared to 2000. In 2002, we incurred an increase of $349,000 in depreciation associated with additional equipment necessary to support our website and those of our directory platform licensees; an increase of $177,000 in the cost of third-party data; and an increase in revenue from lower margin merchant network services. These increases were offset in part by a decrease of $286,000 in third-party website creation and hosting expenses associated with our merchant programs and a decrease of $216,000 in equipment related expenses incurred to support our directory platform and the platforms of our licensees. In 2001, we incurred increases of $128,000 in salaries and benefits and $209,000 in equipment related expense to support our directory platforms and the platforms of our licensees. These increases were offset in part by decreases of $271,000 in website creation and hosting fees in connection with our merchant services programs and amortization of deferred project costs. Gross Profit. Gross profit in 2002 was 68.1% of net revenue, or $8.0 million, compared with 62.1% of net revenue, or $5.8 million in 2001 and 82.5%, or $16.4 million, in 2000. The increase in gross profit dollars and percentage in 2002 was primarily due to an increase in net revenue being spread over relatively fixed costs of revenue, offset in part by an increase in lower margin merchant network services revenue. The decrease in gross profit dollars and percentage in 2001 was primarily due to relatively fixed costs of revenue being spread over decreased revenue, as well as a decrease in higher margin national advertising revenue as a percentage of total net revenue. Sales and Marketing. Sales and marketing expenses were $4.7 million, $24.6 million and $29.2 million in 2002, 2001 and 2000, respectively, representing a decrease of $19.9 million, or 80.1%, from 2001 to 2002, and a decrease of $4.6 million, or 15.7%, from 2000 to 2001. The decrease in 2002 was primarily related to the elimination of the non-cash advertising expense related to our former agreement with Viacom, which accounted for $9.7 million and $11.8 million of our sales and marketing expense during 2001 and 2000, respectively. The decrease in 2002 was also attributable to decreases of $6.1 million in other corporate marketing program expenses, $2.0 million in employee salaries and benefits resulting primarily from actions taken during our corporate restructuring activities in the three months ended December 31, 2001, $913,000 in provisions for doubtful accounts, and $770,000 in merchant program expenses. The decrease in 2001 was due primarily to decreases of $3.8 million in merchant services program expenses and $2.1 million in CBS advertising, offset in part by increases of $533,000 in other advertising expenses, $413,000 in provision for doubtful accounts, $374,000 in employee salaries and benefits and $267,000 in costs associated with additional leased facilities. Research and Development. Research and development expenses were $5.4 million, $6.7 million and $3.5 million in 2002, 2001 and 2000, respectively, representing a decrease of $1.3 million, or 18.7%, from 2001 to 2002, and an increase of $3.2 million, or 92.9%, from 2000 to 2001. The decrease in 2002 was due primarily to decreases of $631,000 in outside consulting, $302,000 in employee salaries and benefits, $163,000 in costs associated with leased facilities and $74,000 in recruiting expenses. The increase in 2001 was due primarily to increases of $2.1 million in salaries and benefits associated with new personnel resulting primarily from our acquisition of Envenue, $525,000 in depreciation, $498,000 in outside consulting expenses, and $395,000 in costs associated with additional leased facilities, offset in part by an increase of $389,000 in the capitalization of deferred project costs. General and Administrative. General and administrative expenses were $4.1 million, $4.2 million and $3.3 million in 2002, 2001 and 2000, respectively, representing a decrease of $124,000, or 3.0%, from 2001 to 2002, and an increase of $878,000, or 26.6%, from 2000 to 2001. The decrease in 2002 was primarily due to a decrease of $787,000 in salaries and benefits resulting primarily from actions taken during our corporate restructuring activities in the three months ended December 31, 2001 and a decrease of $261,000 in costs associated with leased facilities, offset in part by an increase of $824,000 in expenses for professional services incurred primarily as a result of amendments to our Annual Report on Form 10-K for the year ended December 31, 2001 and our Quarterly Report on Form 10-Q for the three months ended March 31, 2002 and the restatement of the financial statements included therein. The increase in 2001 was due primarily to increases of $275,000 in professional services, $261,000 in insurance expenses, $226,000 in salaries and benefits associated with new personnel and $59,000 in depreciation. Amortization of Goodwill, Intangibles and Other Assets. Amortization of goodwill, intangibles and other assets was none, $719,000, and $1.2 million in 2002, 2001 and 2000, respectively, representing a decrease of $719,000, or 100.0%, from 2001 to 2002, and $437,000, or 37.8%, from 2000 to 2001. The decrease in 2002 resulted primarily from the absence in 2002 of amortization of goodwill resulting from our acquisition of Envenue, which was written down to zero as of December 2001 as a result of an impairment analysis, and amortization 32 expense associated with a software license, which was fully amortized as of December 2001. The decrease in 2001 resulted primarily from the absence in 2001 of amortization of the value of warrants issued in connection with a co-branded website and linking agreement, and a reduction in amortization expense associated with a software license, offset in part by an increase in amortization of goodwill resulting from our purchase of Envenue in November 2000. Loss on Viacom Transaction. As a result of our October 2001 restructuring of our relationship with Viacom, we reported a one-time, non-cash accounting loss of $22.2 million in 2001 related to the termination of our advertising and promotion agreement with Viacom. We agreed to terminate our right to the placement of advertising on Viacom's CBS properties with an expected net present value of approximately $44.5 million in exchange for, primarily, the reconveyance by Viacom to us of approximately 7.5 million shares of our common stock, the cancellation of warrants held by Viacom to purchase 533,469 shares of our common stock and the reconveyance to us of the one outstanding share of our series E special voting preferred stock. The non-cash accounting loss of $22.2 million results from the difference between the net present value of our remaining advertising rights with Viacom, which were terminated, and the value of the shares of our common and preferred stock that were reconveyed and the warrants that were cancelled. Special (Credits) Charges. In the three months ended December 31, 2002, we recorded the reversal of $262,000 in excess restructuring reserves as a special credit. This reversal resulted primarily from better than expected experience in the subleasing of idle office space for which we had reserved as part of our 2001 special charges. In December 2001, we recorded net pre-tax special charges of approximately $17.3 million, comprised primarily of $15.6 million for the impairment of certain assets, $1.0 million for costs related to facility closures and $700,000 in severance costs related to the reduction of approximately 21% of our workforce. The restructuring resulted in 21 employee separations. These facility closures and employee separation activities were substantially completed during 2002. Included in the $15.6 million impairment charge for certain assets is an amount recorded for the impairment of the unamortized portion of the value of the common stock issued and amounts prepaid to AOL. We assessed the value of our assets related to our AOL Directory Agreement for impairment as revenues were lower at the end of the first year of the Directory Agreement than originally anticipated. Based upon an impairment analysis that indicated that the carrying amount of these assets would not be fully recovered through estimated undiscounted future operating cash flows, a charge of $11.7 million was recorded as an additional component of special charges during 2001. The impairment was measured as the amount by which the carrying amount of these assets exceeded the present value of the estimated discounted future cash flows attributable to these assets. In December 2001, we exercised our rights under the Envenue acquisition agreement to substantially reduce the funding of Envenue. We evaluated the carrying value of our goodwill in Envenue, and determined it would not be fully recovered through estimated undiscounted future operating cash flows. As a result during the three months ending December 31, 2001, we recorded as a component of the $15.6 million impairment charge for certain assets an impairment charge of $1.9 million related to the Envenue goodwill. The impairment was measured as the amount by which the carrying amount of these assets exceeded the present value of the estimated discounted future cash flows attributable to these assets. Also included in the impairment charge for certain assets are amounts related to prepaid advertising expenses. As a result of our change in overall strategy from a destination site to a technology provider, we no longer considered this prepaid advertising to be complementary to our corporate strategy. Accordingly, we recorded $1.4 million for the impairment of these prepaid advertising assets. Of the total $1.4 million facilities and severance charge, which is net of the $262,000 special credit recorded in 2002, $1.2 million is cash-related. As of December 31, 2002, $1.3 million of the original $1.4 million accrual had been utilized. We have a remaining liability of $52,000 on our balance sheet as of December 31, 2002 relating to the special charges. Other Income. Other income was $2.0 million, $3.2 million and $3.7 million in 2002, 2001 and 2000, respectively, representing a decrease of $1.3 million, or 39.1%, from 2001 to 2002, and a decrease of $469,000, or 12.7%, from 2000 to 2001. The decrease in 2002 was due primarily to a decrease in interest income earned as a result of reduced funds available for investment and a decline in interest rates, and an increase in interest expense incurred as a result of our financing of equipment purchases made during 2001 and 2002, offset in part by a loss on disposal of fixed assets in 2001. The decrease in 2001 was primarily due to a decrease in interest income due to lower available funds for investment, offset in part by a decrease in unrealized losses on an investment. Income Taxes. We have not provided for income taxes in each of the years ended December 31, 2002, 2001 and 2000 due to its significant pre-tax losses. We have not recorded a benefit for income taxes as we believe it is more likely 33 than not that net operating losses and tax credits will not be utilized. In assessing the realizability of deferred tax assets, we considered whether it is more likely than not that some or all of the deferred tax assets will not be realized. We believe that sufficient uncertainty exists regarding the realizability of the deferred tax assets such that a valuation of $40,346,000 and $38,574,000 for December 31, 2002 and 2001, respectively, has been established for deferred tax assets. Net Loss. Our net loss decreased to $4.0 million in 2002, from $66.8 million in 2001 and $17.0 million in 2000. As of December 31, 2002, our accumulated deficit totaled $108.7 million. Liquidity and Capital Resources As of June 30, 2003, we had total cash and marketable securities of $50.3 million, consisting of $39.4 million of cash and cash equivalents, $6.6 million of short-term marketable securities, $4.3 million of long-term marketable securities and $36,000 of restricted cash. During the six months ended June 30, 2003, cash and cash equivalents increased by $944,000, primarily due to cash provided by investing activities of $4.4 million and cash provided by operating activities of $398,000, offset in part by net cash used for financing activities of $3.8 million. During the six months ended December 31, 2002, cash and cash equivalents increased by $3.3 million, primarily due to cash provided by investing activities of $4.2 million, offset in part by net cash used for financing activities of $642,000 and net cash used in operating activities of $217,000. Net cash provided by operating activities for the six months ended June 30, 2003 was $398,000 primarily due to net income of $583,000 for the six months ended June 30, 2003; and non-cash income and expenses of $644,000 in depreciation and amortization, $73,000 of amortization of unearned compensation and $37,000 of non-cash interest income on a note receivable. The increase in cash for the six months ended June 30, 2003 was also due to an increase of $128,000 in accrued expenses and an increase of $58,000 in deferred revenue. These increases were offset in part primarily by an increase of $566,000 in accounts receivable and an increase of $519,000 in other current assets. Net cash used in operating activities for the six months ended December 31, 2002 was $217,000 primarily due to a net loss of $1.6 million for the six months ended December 31, 2002, offset in part by non-cash income and expenses of $411,000 in depreciation and amortization, a special credit for the reversal of excess restructuring reserves of $262,000, $73,000 of amortization of unearned compensation and $36,000 of non-cash interest income on a note receivable. The decrease in cash for the six months ended December 31, 2002 was also offset in part by an increase of $764,000 in accrued expenses and a decrease of $426,000 in other assets. Net cash provided by investing activities for the six months ended June 30, 2003 was $4.4 million, primarily due to $3.0 million in proceeds from sales of marketable securities and a decrease of $1.6 million in restricted cash, offset in part primarily by purchases of marketable securities of $165,000. Net cash provided by investing activities for the six months ended December 31, 2002 was $4.2 million, primarily due to proceeds from sales of marketable securities of $8.9 million and a reduction in restricted cash of $396,000, offset in part by purchases of marketable securities of $5.1 million. Net cash used in financing activities for the six months ended June 30, 2003 was $3.8 million primarily due to payments on notes payable of $2.2 million and a payment of $1.7 million related to the settlement of our litigation with the former stockholders of Envenue Inc. ("Envenue"), offset in part by proceeds of $91,000 from the issuance of stock. Net cash used in financing activities for the six months ended December 31, 2002 was $642,000 primarily due to payments of notes payable of $924,000, offset in part by $249,000 in proceeds from the issuance of stock. In June 2002, we entered into a loan and security agreement (the "SVB Financing Agreement") with Silicon Valley Bank ("SVB"), under which we had the ability to borrow up to $4.0 million for the purchase of equipment. Amounts borrowed under the facility accrued interest at a rate equal to prime plus 0.25%, and were to have been repaid monthly over a 30-month period. We had utilized $2.7 million of this facility through borrowings that occurred in June and September 2002. The SVB Financing Agreement also provided for a $1.0 million revolving line of credit. We did not borrow any amounts under the revolving line of credit. Our ability to borrow additional amounts under the SVB Financing Agreement expired on May 30, 2003. In May 2003, we paid SVB $1.8 million in satisfaction of our outstanding borrowings under the loan facility. We are no longer required to maintain minimum amounts in deposit or investment accounts at SVB, as the SVB Financing Agreement has expired and any outstanding borrowings have been repaid in full. In November 2000, we acquired Envenue, a wireless provider of advanced searching technologies designed to drive leads to traditional retailers. The total purchase price included consideration of $2.0 million in cash to be paid on or before May 24, 2002, which we classified as a payable related to acquisition within current liabilities. We did not pay the $2.0 million on or before May 24, 2002, as we were involved in a contractual dispute with the 34 previous owners of Envenue. In June 2002, we placed $2.0 million into an escrow account, which was to be held until the resolution of this dispute. In October 2002, we paid $410,000 out of the escrowed funds, representing the undisputed portion of the purchase price plus interest from the original maturity date to the former stockholders of Envenue. The remaining $1.6 million of the purchase price was classified separately in the accompanying financial statements as of December 31, 2002. We recorded $1.6 million as restricted cash at December 31, 2002 related to the cash held in escrow. In June 2003, we paid the former stockholders of Envenue $1.7 million to settle all claims related to the acquisition of Envenue. As a result, we no longer have funds in escrow related to the matter. We have incurred significant operating expenses since our inception. We anticipate that our operating expenses and capital expenditures will constitute a material use of our cash resources into the foreseeable future. We expect that we may need to incur advertising expense in future periods, which will require us to spend cash in order to continue to brand our name and increase traffic to our website. In addition, we may utilize cash resources to fund internal research and development activities, acquisitions, or investments in businesses, technologies, products or services that are strategic or complementary to our business. We believe that the cash and marketable securities currently available will be sufficient to meet our anticipated cash requirements to fund operations for at least the next 12 months. The following table summarizes our long-term contractual obligations as of June 30, 2003 (in thousands):

(a) Excludes our operating lease for our principal administrative, sales and marketing, and research and development facility located in Westborough, Massachusetts, which expires on December 31, 2003. (b) Consists of scheduled payments under various third-party data licensing agreements. 35 BUSINESS We are a leading provider of local online advertising solutions for merchant and national advertisers, enabled by our innovative, consumer-oriented online yellow and white pages directory technology. We generate revenue primarily from advertising that is placed in the Switchboard-powered yellow pages directory platforms of our licensees, as well as our own directory website, www.switchboard.com. We license our yellow pages directory platform to Internet portals, traditional yellow pages publishers and newspaper publishers. Through our website, and our licensee network of Switchboard-powered yellow pages platforms, we provide merchant and national advertisers with a way to connect with local consumers, thus helping these businesses establish and grow their online presence. As with the traditional paper-based yellow pages, merchants that advertise directly with us or through one of our licensees are able to get their message in front of consumers at the time they are looking for that merchant's products or services. Each month, millions of consumers seek the businesses they need through our consumer-oriented directories. We are a Delaware corporation that commenced operations in February 1996. From our inception in February 1996 until our initial public offering in March 2000, we were a unit and later a subsidiary of ePresence, Inc. (formerly Banyan Worldwide), the primary selling stockholder. We acquired MapsOnUs(TM) (www.mapsonus.com) in 1998. MapsOnUs provides advanced mapping and driving directions throughout the United States. We have integrated the MapsOnUs technology and mapping services directly into our directory platform. Our Market Opportunity For decades, yellow pages directories have been a primary source of local merchant information for consumers. According to The Kelsey Group ("Kelsey"), a global authority on local and personalized commerce intelligence, the yellow pages industry generates an estimated $14 billion in annual advertising sales in the United States, and $25 billion worldwide. Kelsey reports that while most of that market still purchases yellow pages advertising in traditional printed form, the industry is experiencing a migration from paper to online searches. According to Kelsey, approximately 13% of yellow pages directory inquiries were conducted online in 2002 compared to approximately 10% in 2001 and 2% in 2000. Kelsey expects that this trend will continue with projections of 25% growth in annual Internet yellow pages traffic during the next several years, with online and wireless directory lookups accounting for 40% of the overall yellow pages usage by 2006. As the volume of directory references made online continues to grow, we believe that merchants will continue to shift marketing expenditures away from print yellow pages and towards online yellow pages providers. Kelsey further reports that the Internet yellow pages market, which generated $388 million in 2002, is forecasted to reach $2 billion by 2006. An online presence is important for merchants of all sizes, regardless of whether the merchant actually sells its products and services over the Internet. According to 2002 research conducted by Pew Internet & American Life, if a merchant provides product and/or service information online, even if it does not sell products online, nearly half of all Americans would be more likely to go to the physical store to transact business. Online yellow pages are a resource that merchants can use to cost-effectively establish an online presence and provide easy access to information to consumers who are actively searching for merchants that meet their product and service needs. According to the 2003 Yellow Pages Industry Usage Study released by the Yellow Pages Integrated Media Association, conducted by Knowledge Networks, 64% of online yellow pages users make or intend to make a purchase after referring to Internet yellow pages. Further, one of the fastest growing segments of online advertising is paid search. We believe that the "pay for placement" and "pay for performance" advertising business models have significantly contributed to the success of paid search. According to the Interactive Advertising Bureau, paid search accounted for approximately $900 million or 15% of online advertising spending in 2002. Many of the companies that develop these search engines have publicly stated their emerging interest in the local online advertising market, and the application of the "pay for performance" model to this market. Market research continues to reinforce the increasing role that Internet promotion plays in stimulating online and offline transactions for merchants. We believe that as a leading provider of local online advertising solutions and yellow and white pages directories, we are well positioned to capitalize on this opportunity through our branded website and our network of current and future licensees. Our Business Merchant advertisers pay to advertise in the Switchboard-powered directories of our licensees and/or in our own directory website. Consumers 36 access our directory platform through one of the Internet brands of our licensees or through our website, www.switchboard.com, to locate business and residential information locally and nationally. The sales forces of our licensees, our own direct sales force and third party sales channels sell the advertising placed in Switchboard-powered directories. Our directory technology creates powerful advertising opportunities for merchant and national advertisers, and the advertising content creates a useful experience for consumers that drives more usage to our own website, and to the websites of our licensees. By increasing our consumer audience, we, in turn, increase the value and reach of our advertising products. Our Advertising Products We offer a variety of advertising products tailored to the needs of small local businesses, large national advertisers, e-tailers and other advertisers seeking increased online exposure. Subscriptions for Prominent Placement - We offer merchants prominent placement in our directory and the directories of our licensees. Prominent placement advertisements enable merchants to have their listing data presented ahead of non paying merchant listings included in our database, and / or enhance their listing with additional informational content that may include links to their website. It also allows advertisers to expand the geographic and category reach of their business information. Merchants typically pay a monthly subscription fee for prominent listings. Local Performance Based Advertising (LocalClicks(SM)) - We continue to evolve the concept of a traditional print directory into an interactive and dynamic medium interconnecting consumers with merchant and national advertisers. In August 2003, we announced the launch of our new LocalClicks(SM) pay-for-performance advertising services. The LocalClicks(SM) services introduce performance-based advertising within the Switchboard.com yellow pages. The LocalClicks(SM) services integrate paid links into yellow pages results, connecting consumers directly from yellow pages business listings to extended business information, business services, and products available for online purchase. These pay-for-performance services permit national businesses that have a local business presence to embed links into each of their affiliated local business listings. For example, an auto manufacturer can place links to a newly introduced car website into the business listings of all of its dealerships nationwide. With a single ad purchase, they create thousands of click-able opportunities for consumers searching for dealerships locally. Customers typically pay a fixed fee each time a lead is generated by consumers who click on the LocalClicks(SM) links. Content-Targeted Advertising - Using our proprietary enhanced merchant information (rich data that we have gathered about a merchant's product and service offerings), we are able to serve relevant content-targeted advertisements on yellow pages results and a variety of other pages throughout the Switchboard.com website. Through our agreement with Google Inc. announced in July 2003, we offer content-targeted advertisements on our website made available through the Google AdSense(TM) program. Our extensive local content enables Google's advertisers to reach a very targeted audience through relevant yellow pages results. We share in the revenue generated when Switchboard.com users click on Google advertisements. For example, when a consumer performs a yellow pages search, we are able to provide Google extensive information about the category, the location, and the content associated with merchant listings that satisfy the search. Google analyzes this information, matching keywords from our data with advertisers in their database, and returns the appropriate advertisements for presentation alongside the yellow pages search results. Banner Advertising - We sell traditional site-wide banner and category-specific banner programs on the Switchboard.com website, and the directories of some of our licensees, primarily in the white pages area of the directory platform. We also sell sponsorship programs on a site-wide basis or for various categories. Sponsorships are advertisements that do not rotate with other advertisers and are prominently displayed on our website. Customers typically pay us on a cost per thousand impressions (CPM) or cost per action (CPA) basis for banner and sponsorship advertising. As a service to some of our licensees and local merchant customers, we have historically provided complementary services such as small business website hosting. However, we do not emphasize such services today. In addition we also customize our MapsOnUs maps and driving directions content for licensing to a number of online destinations but such licensing is not a primary product offering and is not a material revenue source. Selling Our Advertising Products Our online advertising products are an integral part of our directories and are sold by the sales forces of our directory platform licensees, our own direct sales force, and by third party sales channels. Directory Platform Licensees - We provide a complete online yellow pages solution, which we refer to as a directory platform, for companies strategically focused on developing a successful online directory business under their own 37 brands. We license our directory platform to Internet portals, traditional yellow pages publishers and newspaper publishers. Our suite of ad products is built around a proprietary merchant database and search technology, as well as full-featured ad and merchant management tools. The full suite of ad products included in our directory platform enables our licensees to offer merchants local online advertising solutions and yellow and white pages services. Our directory platform is fully integrated to meet the needs of our licensees, their merchant customers and the millions of consumers that utilize the Switchboard platform embedded in their websites. Our licensees typically pay us a setup fee for the creation and modification of a web-hosted directory platform. In addition to a setup fee, our licensees typically pay us a royalty in the form of a fixed fee-per-merchant based on the number of merchant advertisements promoted in their platform, or a percentage of revenue generated from those merchant advertisements. Further, our licensees can offer their advertisers visibility in www.switchboard.com for an incremental fee. Licensing our technology in this way enables us to accelerate and share in the growth of local online advertising as traditional yellow pages advertisers spend more online. Our largest and most significant licensee is AOL. We maintain and manage a customized directory platform in a separate and distinct web-hosted environment for AOL. Prior to October 1, 2003 AOL paid us a percentage of revenue for advertisements placed in their directory platform and engineering service fees on a time and materials basis for customized modifications they requested to their directory platform. Beginning October 1, 2003, AOL will pay us $4.8 million annually in monthly installments to provide, maintain and customize their directory platform through December 2005. In addition, AOL and Switchboard will be able to sell and share revenue on advertising products offering merchant and national advertisers access to the combined consumer audience of both the AOL and Switchboard yellow pages. AOL constituted approximately 47% of our revenue for the six months ending June 30, 2003 and beneficially owns approximately 7.9% of our outstanding common stock, as of September 4, 2003. We anticipate that AOL will continue to represent a significant percentage of our revenue in 2003 and will be a material component of our overall business. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Significant Relationship" for more information. Direct and Third Party Sales - We also sell directory advertisements into the Switchboard.com website through direct and third party sales forces. We have a small, dedicated direct sales force that focuses on selling our advertising products primarily to national and e-commerce advertisers. We also utilize third party sales channels, including yellow pages publishers, telemarketing companies, and Certified Marketing Representatives (advertising agencies that specialize in placing yellow pages advertisements). The Audience for Our Advertising Products Our licensees each have their own respective online audiences, or consumer reach, and the advertisements they sell into their Switchboard-powered directories are made visible to those audiences. Furthermore, our own website, www.switchboard.com, is one of the leading destinations on the Internet where consumers search for local merchants. Switchboard.com has grown significantly since its inception. As a result, many advertisers looking for effective and efficient forms of local online advertising desire visibility in www.switchboard.com. According to Nielsen//NetRatings, as of August 2003, we serve more than 5.5 million unique consumers each month who visit our site. Directory advertisements sold into Switchboard.com are typically made visible to the combined audience of the Switchboard.com directory, and the directories of a subset of our licensees who agree to display, in their Switchboard-powered directories, advertisements sold by Switchboard and other sales forces. By participating in this network, these licensees can offer their users a broader base of advertising content, which, in turn, makes their directories more useful to their users. The combined audience of www.switchboard.com and these licensees adds overall value for our advertisers. Our Strategy We believe that our business opportunity and prospects rely on overall growth in the market for local online advertising and yellow pages advertising, our ability to attract increasing numbers of paying merchant advertisers either directly or through our licensees, our ability to drive quality leads to merchants, and our ability to innovate our product and service offerings to meet consumer and merchant demands. We intend to grow our business by focusing on the following key strategies: Promote the Development of Local Online Advertising Solutions and the Online Yellow Pages Market - We have sought to accelerate market adoption of online yellow pages advertising by licensing our directory technology to major media companies, including traditional yellow pages publishers, newspaper 38 publishers and Internet portals. We have pursued this strategy on a private label and co-branded basis to supplement our initiatives in promoting the Switchboard brand. We also participate in industry trade groups to broaden adoption of the online yellow pages advertising media. We seek to continue these efforts to grow the overall market opportunity for the online yellow pages category and local online advertising in general. Attract Increasing Numbers of Paying Merchants - We seek to increase the number of merchant advertisers in our directory and the Switchboard-powered directories of our licensees. Our sales strategy includes a number of facets, including seeking to expand the number of licensees of our directory platform, leveraging third party sales forces, promoting self-service sign up for merchants and other sales strategies. We may also embark upon broader direct selling initiatives to local merchants, including geographically targeted telemarketing and in-person sales. If we pursue such direct selling, we will evaluate expanding our existing sales and marketing team and/or contracting with third party marketing firms. Expand the Audience for our Advertising Products - Continuing to expand the number of consumers using our website and the directories we power for licensees is critical to our ability to provide value to our merchant advertisers. In addition, a large and active base of merchant advertisers will enable us to generate more relevant search results for consumers. Through various initiatives, we seek to increase the number of consumers using our directory platform. Such initiatives may include public relations activities to increase consumer awareness of online yellow pages and the Switchboard brand; online advertising campaigns to direct traffic to our website; word-of-mouth marketing initiatives; increasing the number of licensees using our yellow pages directory platform; distribution arrangements to provide our local content to search portals, e-commerce hubs and topic-specific content sites; and affiliate programs targeted at attracting usage across specific segments of the online consumer population. Innovate New Product and Service Offerings - We believe that our future success hinges on delivering a superior consumer experience through the functionality of our website and the directories that we power for our licensees. By delivering a superior consumer experience, we will enhance the value to merchants that advertise with us and with our licensees. For example, through sophisticated searching capabilities and simple user interfaces, we can connect consumers searching for specific products and services with the local merchants that provide them. In addition, by continuing to provide our merchant base with customizable products and comprehensive management tools that make it easier for individual merchants and our licensees to manage their merchant advertising efficiently, we seek to increase the revenue opportunity of our services. We intend to continue to develop new technologies that improve the functionality of our products and services for consumers, merchants and our licensees. We spent approximately $3.5 million, $6.7 million, and $5.4 million on research and development in 2000, 2001, and 2002 respectively. Our Online Directory Platform Our directory platform is comprised of five fully-integrated components that are utilized for our branded www.switchboard.com website, and that enable our licensees to develop and manage their online directory business. Sophisticated Database and Search Engine - We provide a highly scalable, reliable and high performance directory search engine that we have optimized for the unique nature of local business directory searches. Through our proprietary database technology, we are able to easily merge data from multiple sources, allowing us to provide timely and comprehensive content to our licensees and users. With the release of our Switchboard Matrix(SM) technology, we were the first-to-market with the introduction of searchable online "copy points". Copy points are enhanced data typically found in paper yellow pages advertising. Copy points enable merchants to be found via a wide variety of attributes, including product and service offerings, business hours, specialties, etc., moving beyond the traditional category / location searching of paper-based or other online yellow pages offerings. Customizable Advertising Product Suite and Business Rules - Within the yellow pages platform we provide a complete suite of local and national advertising products that can be fully customized to match the unique packaging and pricing requirements of our licensees. With the introduction of our searchable "copy point" model, we fully aligned our online advertising products with traditional yellow pages products, offering similar enhanced data as the printed medium, improving our ability to streamline our licensees' sales efforts. Comprehensive Merchant Management Tools - We have developed three different tiers of merchant management software solutions to provide our licensees with the level of functionality that works most efficiently in coordination with their existing in-house systems. For licensees looking for a complete merchant management solution, we provide a comprehensive customer relationship management ("CRM") package that tracks merchant customer activity, performs billing functions and manages merchant advertising. Our CRM package also can be integrated with other applications to enable customer support representatives to manage the fulfillment of a variety of products from within a single interface. 39 For licensees that already possess CRM infrastructure, we provide a secure, web-based merchant management tool that allows licensees to easily manage advertising campaigns and merchant collateral within the online yellow pages platform. Lastly, for licensees that regularly inject large volumes of merchant advertisements into the system, we provide a bulk load interface that allows formatted files containing merchant information and ad specifications to be automatically processed. Cobrandable User Interface - Through ongoing usability testing and close analysis of consumer use of online yellow pages, we continue to evolve our user interface and searching capabilities to quickly connect consumers with the most relevant results. Through the modular organization of functional elements of our interface, we can customize the interface's look and feel so that it is consistent with the look and feel of our licensees' websites and branding. These modules separate the functional elements from the layout elements, such as site appearance, thus facilitating rapid development. As we enhance or build new functional elements, the underlying architecture enables us to deploy these elements across all of the websites of our licensees without making individual changes to specific implementation. MapsOnUs.com - Maps and Directions - Our MapsOnUs technology integrates maps and driving directions into many areas of our directory platform, and is also available through our MapsOnUs.com website. Utilizing our MapsOnUs capabilities, we are able to provide businesses with dealer locators that can be easily integrated into their websites to help visitors locate the closest outlet, dealer or franchisee, such as the Post Office locator currently implemented for the United States Postal Service on USPS.com. Our Technology and Data Content We have developed sophisticated technologies that enable rapid dissemination of information requested by consumers using our website or the websites of our licensees. These technologies were conceived and developed by a staff of senior engineers experienced in designing large-scale, distributed computer systems, a form of computer architecture that divides system functionality over numerous computers, each known as a server, to enhance overall system performance and reliability. We also have particular strengths in the areas of database technologies, advertising management and content customization. Directory Technology - We have been affiliated with ePresence, a pioneer of directory technology, since our founding in 1996. Directories played a key role in the large-scale, multiple-site distributed systems deployed by Banyan Worldwide (now ePresence) since 1983. Our founder, Dean Polnerow, designed and originally developed StreetTalk(TM), Banyan's directory service. Building on this experience to create our own proprietary directory technology, we created what we believe to be the first national directory of United States residential information available on the Internet, as well as our innovative and proprietary yellow pages business directory. Data Content - We license our base data content from third parties and then augment it with data that we have gathered ourselves. There are over 120 million residential and 14 million business listings included in our database. Today our primary data source for base listing information is Acxiom Corporation. We have gathered additional detailed information through our own data compilation efforts, and through local merchant sales. We have additional data content for over one million merchants that enable consumers to search on these copypoints or attributes. Site Design - Our directory technology was designed to provide high levels of performance, scalability, and reliability. The directory is implemented as a set of Windows NT servers that are organized into groups. Each group of servers provides different parts of the overall site's functionality and each type of functionality is provided by more than one group of servers. Individual servers in a group can be added or removed without affecting the functional capabilities of the site, and most changes required are managed automatically by proprietary software that we have developed. This distributed architecture is designed to be highly scalable, which means that system capacity and functionality can be easily and inexpensively increased, typically with minimal or no time-consuming software changes required. It is also designed to be reliable, which means it is resistant to service interruptions and the unavailability of one or more servers does not affect the operation of other servers or the directory as a whole. Database Search Technologies - We have developed technology designed to quickly exchange information between the groups of servers that provide the interface consumers use to input their requests for information with the groups of servers that store the databases of information we use to respond to these requests. This technology allows data from multiple databases to be accessed and combined, regardless of its structure or content. This simplifies the development of new user interfaces and facilitates database updates. Our database technology helps to maximize website performance through sophisticated in-memory data structures that are optimized for rapid searching of various combinations of data elements, and by automatically balancing the tasks being performed by individual servers. 40 Our database technology includes sophisticated query management techniques that enable requests for large amounts of data to be retrieved in segments while reducing the computer processing time typically associated with these operations using conventional design techniques. This enables ready access to a large amount of data stored in any of the databases and results in faster responses to the user. Advertising Management and Geo-targeting - Our ad placement technology is used primarily to control the frequency and positioning of advertisements displayed on our website. This technology rotates merchant ad displays in and out of prime locations on our yellow pages screens according to priorities specifically purchased by our merchant and banner advertising customers. We use an automated chain of software programs to securely facilitate the addition, removal and modification of both individual ads and large, aggregated volumes of merchant advertising into our yellow pages directory. We have also developed a proprietary geo-targeted ad placement methodology that provides a simple way to allow a merchant to focus its advertising to the surrounding communities it desires to target. This technology uses the physical location of a business and a distance measurement selected by the merchant to automatically determine the appropriate location targets. These ad management tools and processes enable our support personnel and authorized ad resellers to remotely manage and control national, regional and local ad campaigns. Merge-Purge Data Consistency - Data integrity for business listings and advertising products is preserved through the application of business rules to all data change requests (data merging and purging). Data integrity rules are applied by our merge-purge technology as each data change request attempts to modify listing and/or ad data. These rules include low-level data content and constraint validation, as well as "sales channel" specific rules that manage the business logic associated with listing and ad attributes. This allows for continuous refreshing of business listing data, and easy management of all advertising products associated with a given business, while permitting the best and latest available data to be presented to the consumer. Customer Relationship Management - Our web-based CRM tools are specially designed to help our licensees easily manage many facets of their relationships with their own merchant customers. The tools provide product definition and merchant management capabilities for direct selling efforts and indirect sales channels, including sales management, customer invoicing, credit card transactions, self-service online advertising sales, account history and reporting. Product definition capabilities allow each sales channel to combine our available advertising products into packaged product offerings for their specific merchant customer base, such as a variety of online ad presentations, coupons, websites, and products fulfilled by third parties, along with the pricing and discounting features of each ad product. The tools present an access-controlled workflow process that manages and records all merchant customer interactions, from initial sale and payment processing through subsequent interaction logging, automatic renewal management and ongoing reporting. Competition We compete against numerous companies primarily in three categories of businesses for local and national advertising dollars and market share, namely: * Internet-based yellow and white pages directories that do not utilize our directory platform, such as Yahoo! Yellow Pages and Verizon SuperPages; * Printed yellow and white pages directories that compete with online offerings for advertiser dollars; and * Internet-based pay-for-placement and pay-for-performance search engines and services, such as Google, LookSmart, Overture, Yahoo! and Citysearch, particularly as they begin to expand their offerings to local markets. We compete with these organizations primarily on the basis of directory technology, as well as the price and consumer reach of directory advertisements. Our directory platform is one of the most utilized directory platforms on the Internet, according to Nielsen//NetRatings. We believe that our directory technology has allowed us to secure our key alliance with AOL as well as alliances with other important customers and, along with the popularity of www.switchboard.com, has enabled us to capture the attention and loyalty of millions of consumers. However, we continue to face competition from many sources both traditional and untraditional, including companies which have substantially greater resources and name recognition than we do. Beyond Yahoo! and Verizon, there are numerous national and regional publishers of online and print yellow pages advertising who compete with us and our licensees for merchant advertising. We may also face competition from internal development groups within our existing and prospective customers, some of which may decide to develop their own proprietary online directory solutions. Additionally, the increased popularity of paid search, and the interest of the companies that are 41 leading the segment in expanding their offerings to more effectively address localized searching and advertising, could begin to blur the lines between search engines and online directories and add additional complexities to the market. As directory references increase online, we believe advertising in an online directory (versus print) will become increasingly important for businesses both large and small. As more yellow pages print advertising dollars are spent on online advertising, we believe that the competition in the online directory market will intensify. We believe publishers of local online advertising solutions will seek best-in-class technology and tools to improve the efficiency of their online operations and to differentiate their online offerings to merchant advertisers. We believe factors that will enable online directory providers to compete effectively in this environment include the ability to offer a highly functional and scalable technology platform, incremental web visibility for their merchant advertisers, and tools to ease the management and administration of online ad purchases. We further believe that Switchboard is well positioned to fulfill publishers' needs in these areas. As online usage grows, companies offering local directories will compete to bring greater value to online advertisers by further increasing consumer usage of their directories in these ways: * speed of results; * relevance of search results to intent; and * content breadth and depth. We believe that structured and highly specialized user interfaces and database designs tailored to the needs of local advertisers will be an advantage to easily guide consumers to local service and business information. We believe that our depth of experience and focus on these areas will play an important role in making our offerings attractive to users and thus to the merchants that populate our directory platforms. We believe our ability to compete successfully over the long-term depends on many factors. In addition to those discussed above, these factors include maintaining the quality of content and functionality we provide relative to our competitors, the cost-effectiveness and reliability of our services relative to our competitors, and our ability to generate value for local and national merchants. The market in which we compete is rapidly evolving. To remain competitive, we believe it is important to continually work towards the development of new technologies to improve the products and services we offer to our licensees and merchant customers, as well as to improve the functionality and utility of our web hosted directory platform. There can be no assurance that we will maintain our current competitive advantages or that we will compete successfully in the market for online directory advertising services in the future. Intellectual Property Patents, copyrights, service marks, trademarks, trade dress, trade secrets, and other intellectual property are critical to our success. We rely on a combination of patent, trademark and copyright law, trade secret protection and confidentiality, and license agreements with our employees, consultants, customers, licensees, and others to protect our proprietary rights. All of our employees have executed confidentiality and assignment of invention agreements. Prior to disclosing confidential information to third parties, we generally require them to sign confidentiality or other agreements restricting the use and disclosure of our confidential information. As of June 30, 2003, we had seven patents issued by the U.S. Patent and Trademark Office, three patents issued by the Canadian Intellectual Property Office, three patent applications pending before the U.S. Patent and Trademark Office, and two patent applications pending before the Canadian Intellectual Property Office, all of which relate to the operation, features or performance of our website. We pursue registration of our key trademarks and service marks in the United States and, in some cases, internationally. However, effective patent, trademark, service mark, copyright and trade secret protection may not be available or sought by us in every country in which our services are made available online. Our patents, trademarks, or other intellectual property rights may be successfully challenged by others or invalidated through administrative process or litigation. Further, the validity, enforceability and scope of protection of proprietary rights in Internet-related industries is uncertain and still evolving. We license our proprietary rights, such as patents, trademarks, and copyrighted material, to third parties. Despite our efforts to protect our proprietary rights, third parties may infringe or misappropriate our rights or diminish the quality or reputation associated with our brand, which could have a long-term material adverse affect on our business, results of operations, or financial condition. In addition, we license software, content and other intellectual property, including trademarks, trade secrets, patents, and copyrighted material, from third parties. In particular, we license residential and business listing data 42 from Acxiom Corporation under an agreement that expires in December 2005, and maps and driving directions data and related software from Tele Atlas North America, Inc. under an agreement that expires in February 2005. Further, some of the software code underlying Switchboard.com contains software code that is licensed to us by third parties. If any of these licenses are terminated or expire, it could have a material adverse effect on our business, results of operations, or financial condition. We currently own a number of Internet domain names, including www.switchboard.com and www.MapsOnUs.com. Internet regulatory bodies generally regulate domain names. The relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is unclear. Therefore, we could be unable to prevent third parties from acquiring domain names that infringe or otherwise decrease the value of our trademarks and other proprietary rights. Employees As of September 30, 2003, we had 67 full-time employees. Of these employees, 33 are in research and development, 22 in sales and marketing, 3 in site operations, and 9 in general and administrative. None of our employees are represented by a labor union. We believe our relations with our employees are good. Properties Our principal administrative, sales and marketing, and research and development facilities are located in Westborough, Massachusetts and consist of approximately 17,463 square feet under a sublease that expires on December 31, 2003, with an aggregate annual base rent of approximately $227,000. We sublease this space from ePresence, and are currently in discussions with ePresence to extend the term of our lease. In addition, we lease a sales office in Michigan. We also lease 2,782 square feet of office space in New York City, which we have subleased to a third-party for the remaining term of our lease with the property owner, which expires on April 28, 2005. Legal Proceedings On May 31, 2002 we were sued by the former stockholders of Envenue, Inc., from whom we purchased all of the stock of Envenue in November 2000. The suit alleged that we breached our agreement with the plaintiffs by failing to pay the purchase price of the Envenue stock when it became due on May 24, 2002. We initially paid $400,000, plus interest, representing a portion of the purchase price, to the plaintiffs. The suit sought payment of $1.6 million, representing the balance of the purchase price, plus additional unquantified damages including treble damages. In June 2003, we and the former stockholders of Envenue agreed to settle this suit and in connection therewith, we paid $1.7 million to the former stockholders of Envenue. The parties have exchanged releases and a stipulation of dismissal of this suit was filed with the court on June 16, 2003. On November 21, 2001, a class action lawsuit was filed in the United States District Court for the Southern District of New York naming as defendants Switchboard, the managing underwriters of our initial public offering, Douglas J. Greenlaw, Dean Polnerow, and John P. Jewett. Mr. Polnerow is our President and CEO, and Mr. Greenlaw and Mr. Jewett are former officers of Switchboard. In July 2002, the Company, Douglas J. Greenlaw, Dean Polnerow and John P. Jewett joined in an omnibus motion to dismiss which challenges the legal sufficiency of plaintiffs' claims. The motion was filed on behalf of hundreds of issuer and individual defendants named in similar lawsuits. The plaintiffs opposed the motion. On September 30, 2002, the lawsuit against Messrs. Greenlaw, Polnerow and Jewett was dismissed without prejudice. The Court heard oral argument on the motion in November 2002. On February 19, 2003, the court issued its decision on the defendants' motion to dismiss, granting in part and denying in part the motion as to Switchboard. In doing so, the court dismissed the plaintiffs' claims against certain defendants, including Switchboard. In June 2003, the plaintiffs, the issuer defendants and their insurers agreed on the terms and conditions of a proposed settlement of this case. The terms and conditions of the proposed settlement have been widely reported in the press. Our special committee of the board of directors met twice during June 2003 to evaluate the proposed settlement. The committee was advised by outside counsel on the merits of the proposed settlement. The committee determined that the settlement was in the best interest of Switchboard and that we should accept the proposed settlement. There is no guarantee that the settlement will become final, as it is subject to a number of conditions, including court approval; however, based on this proposed settlement, we do not believe we will suffer material future losses related to this lawsuit. From time to time, we are involved in various legal proceedings incidental to the conduct of our business. 43 MANAGEMENT Executive Officers and Directors Our executive officers and directors and their respective ages and positions with Switchboard as of September 30, 2003 are as follows:

William P. Ferry has served as a director since 1997 and as our Chairman of the Board of Directors since 1998. Mr. Ferry has served as Chairman of the Board of Directors of ePresence (formerly Banyan Worldwide), a provider of security and identity management solutions, since 1997 and as President, Chief Executive Officer and a director of ePresence since 1997. From 1990 to 1997, Mr. Ferry served in various capacities, most recently as President, Services Division, at Wang Laboratories, Inc., an information technology service provider. Dean Polnerow founded Switchboard and has served as our President since March 1998 and as a director since September 1998. Mr. Polnerow has also served as our Chief Executive Officer since August 21, 2003. From our inception in 1996 to March 1998, Mr. Polnerow served as our Vice President, Product and Business Development. From 1983 to 1996, Mr. Polnerow served in various capacities, including as Vice President, Advanced Development, at ePresence (formerly Banyan Worldwide). Robert P. Orlando has served as our Vice President, Chief Financial Officer, Treasurer and Secretary since October 2001. Prior to joining Switchboard, Mr. Orlando was the Chief Financial Officer and Treasurer of Virtual Ink Corporation, a designer of hardware and software collaboration tools, from 2000 to 2001. From 1991 through 2000, Mr. Orlando was the Chief Financial Officer and Treasurer of Mathsoft, Inc., a provider of math, engineering and scientific software solutions. Mr. Orlando also held financial management positions with Bitstream, Inc., Unicco Service Company, Orion Research, Inc. Previous to these positions, Mr. Orlando served as an auditor for Arthur Andersen LLP. James M. Canon has served as our Vice President, Business Development since March 1998. Prior to his appointment as our Vice President, Business Development, from 1997 to March 1998, Mr. Canon served in various capacities at Switchboard, most recently as Director, Product Management. From 1991 to 1997, Mr. Canon served in various capacities, including as Information Products Architect at ePresence. Kevin P. Lawler has served as our Vice President, Human Resources since May 2000. Prior to joining Switchboard, Mr. Lawler served as Director of Human Resources at EMC Corporation, an information storage systems provider, from 1999 to 2000. From 1998 to 1999, Mr. Lawler served as Vice President, Human Resources for Scriptgen Pharmaceuticals Incorporated, a pharmaceuticals company. From 1990 to 1998, Mr. Lawler served as Vice President, Human Resources for Immulogic Pharmaceutical Corporation, a pharmaceuticals company. Robert M. Wadsworth has served as a director since September 1999. Mr. Wadsworth is a Managing Director of HarbourVest Partners, LLC, a venture capital management company. He joined Hancock Venture Partners, the predecessor of HarbourVest Partners, in 1986. Mr. Wadsworth is a general partner of several private equity funds managed by HarbourVest Partners. Mr. Wadsworth has been a director of ePresence since March 1998. He is also a director of Concord Communications, Inc., Network Engines, Inc., Outsourcing Services Group, Trintech Group plc and several private companies. Richard M. Spaulding has served as a director since 1996. Mr. Spaulding is Senior Vice President and Chief Financial Officer of ePresence, where he has served in various capacities since 1990. From 1985 to 1990, Mr. Spaulding held several financial management positions with C.R. Bard, Inc. and previous to these positions, served as an auditor for Arthur Andersen, LLP. Mr. Spaulding also served as a director of several private organizations. David N. Strohm has served as a director since February 1998. Mr. Strohm is a private venture capital investor who has been affiliated with Greylock 44 Partners, a venture capital group, since 1980, and serves as a general partner of several funds managed by Greylock. Mr. Strohm served as a director of ePresence from its inception in 1983 until November 1999. He is also a director of Doubleclick Inc., EMC Corp., Internet Security Systems, Inc., and several private technology companies. Executive officers serve at the discretion of our board of directors. We have a classified board of directors consisting of two class I directors, two class II directors and one class III director. The class I, class II and class III directors serve until the annual meeting of stockholders to be held in 2004, 2005 and 2006, respectively, and until their respective successors are elected and qualified. At each annual meeting of stockholders, directors are elected for a full term of three years to succeed those whose terms are expiring. Currently, the authorized number of directors is seven. We have five directors, two of whom (Messrs. Strohm and Wadsworth) have been determined by the Board to meet current Nasdaq independence standards. To satisfy the director independence requirements of the provisions of the Sarbanes-Oxley Act of 2002, recently adopted accounting rules, and proposed amendments to the Nasdaq listing rules, after the completion of this offering we will be required to reconfigure the makeup of our board of directors, our audit committee, nominating committee, and compensation committee, and appoint a corporate governance committee. We currently have a plan to reconfigure our board and board committees and have engaged a search firm to identify candidates for two new independent directors. We do not anticipate any problems in implementing this plan, however we may not be successful in identifying qualified individuals who are deemed to be independent under applicable standards and willing to serve on our board of directors or board committees. Any failure to reconfigure our board of directors and board committees with qualified independent directors could cause us to be in violation of the Sarbanes-Oxley Act of 2002 and Nasdaq listing requirements, which could have an adverse effect on our business and the trading market for our common stock. Board Committees Our board of directors has a standing audit committee, which, among other things, reviews the results and scope of the audit and other services provided by our independent auditors. The current members of the audit committee are Mr. Spaulding, Mr. Strohm and Mr. Wadsworth. Mr. Spaulding serves as the chairman of the audit committee. The audit committee met on twelve occasions in 2002. Our board of directors has a standing compensation committee, which provides recommendations to the board of directors regarding our compensation programs and administers certain of our employee benefit plans. The current members of the compensation committee are Mr. Ferry, Mr. Strohm and Mr. Wadsworth. Mr. Ferry serves as the chairman of the compensation committee. The compensation committee met on ten occasions in 2002. Our board of directors has a standing nominating committee, which advises and makes recommendations to the board of directors as to the selection of candidates for election to the board of directors. The current members of the nominating committee are Mr. Ferry and Mr. Wadsworth. The nominating committee considers nominees recommended by our stockholders. After the completion of this offering, in order to satisfy the director independence requirements of the provisions of the Sarbanes-Oxley Act of 2002, recently adopted accounting rules, and proposed amendments to the Nasdaq listing rules, we will be required to reconfigure the makeup of our audit committee, nominating committee, and compensation committee as well as form a corporate governance committee. Director Compensation We reimburse directors for reasonable out-of-pocket expenses incurred in attending meetings of the board of directors and any meetings of its committees. Employee directors receive no additional compensation. During 2002, we granted 200,000 options to our non-employee directors. Messrs. Ferry, Spaulding, Strohm and Wadsworth each received a grant of 40,000 stock options at an exercise price of $4.45 per share, which will become vested in equal annual installments over a four-year period. In addition, each of them received a grant of 10,000 stock options during 2002 at an exercise price of $6.15 per share, which became fully vested on May 15, 2003. The board of directors recently revised its compensation policy for outside directors. Formerly, we granted only equity awards in our discretion to non-employee directors under our stock incentive plans. Beginning in 2003 each outside director will now receive $25,000 annually, an additional $3,000 for serving as a committee member, and an additional $2,000 for serving as a committee chair. Each new outside director will also receive an initial grant of 40,000 options, which will vest over a four-year period. At each annual shareholders' meeting, outside directors will also receive equity awards, 45 currently 15,000 options per director per year, which will vest over a one-year period. The board may revise its compensation policy from time to time in its discretion. Compensation Committee Interlocks and Insider Participation As of June 30, 2003, our compensation committee consisted of Mr. Ferry, Mr. Strohm and Mr. Wadsworth. No executive officer of Switchboard served during the year ended December 31, 2002 as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity, whose executive officers served on our board of directors or compensation committee. Mr. Ferry is Chairman of the Board of Directors, President and Chief Executive Officer of ePresence. Mr. Wadsworth is also a director of ePresence. Mr. Strohm served as a director of ePresence from 1983 until November 1999. Another of our directors, Richard M. Spaulding, is Senior Vice President and Chief Financial Officer of ePresence. As of September 4, 2003, ePresence beneficially owned approximately 51.9% of our common stock. A change of control of Switchboard occurred upon the closing of the Restructuring Agreement among Switchboard, Viacom, Inc., and ePresence dated August 28, 2001. At the closing, among other things, Switchboard repurchased from Viacom 7,488,560 shares of our common stock then held by Viacom. As the result of this repurchase, ePresence became the owner of the majority of Switchboard's issued and outstanding common stock. On March 7, 2002, we entered into a corporate services agreement with ePresence under which ePresence provides us with telephone service and support for an amount of $75,000 per year. This services agreement expired on February 28, 2003. In March 2003, we entered into a new services agreement with ePresence to provide telephone service and support only from March 2003 through December 2003 for $62,500. We also sublease our facilities in Westborough, Massachusetts from ePresence. Since January 2001, we have subleased our current facilities at 120 Flanders Road from ePresence. The current sublease will expire on December 31, 2003 and the annual rent for 2003 is $227,000. We are currently in discussions with ePresence to extend the term of our lease. 46 Employment, Change of Control and Severance Agreements Our board approved the acceleration of vesting of options for certain of our officers and our directors in the event of a change in control. A change of control includes a merger or consolidation of Switchboard, or a change in ownership of our securities resulting in one person or entity owning more than 50% of the combined voting power of our outstanding voting securities. Mr. Polnerow serves as our Chief Executive Officer, President and as a member of our board. On December 1, 1999, we entered into an employment agreement with Mr. Polnerow. Mr. Polnerow's annual base salary is currently $220,000 per year and he is also eligible for an annual performance-based bonus. In the event of a change of control, fifty-percent of Mr. Polnerow's then unvested shares will vest if he remains employed for six months after such change of control, or resigns within six months after the change of control due to relocation over 35 miles from our offices in Westborough. Mr. Polnerow's severance also includes six months base salary plus a prorated bonus if he is terminated other than for cause, resigns due to relocation, or suffers a material reduction in title or compensation. If, upon a change in control, Mr. Polnerow is terminated other than for cause within twelve months of said change in control, 100% of his then unvested shares will vest. Mr. Orlando serves as our Chief Financial Officer, Vice President and as a member of our board. On September 20, 2001, we entered into employment agreement with Mr. Orlando, and on August 2, 2002 we entered into a memorandum of employment. Mr. Orlando's annual base salary is currently $200,000 per year and he is also eligible for an annual performance-based bonus. Upon a change of control, 50% of Mr. Orlando's unvested shares will immediately vest; twelve months after the change in control, or if Mr. Orlando's title, responsibilities or compensation are materially reduced within twelve months of the change in control, 100% of his unvested shares will vest. Mr. Orlando is entitled to, among other things, six months base salary and benefits if terminated, other than termination for cause. Mr. Canon serves as our Vice President of Business Development. On December 31, 1999 we entered into an employment agreement with Mr. Canon. Mr. Canon's annual salary is currently $140,000 and he is also eligible for an annual performance-based bonus. In the event of a change of control, 50% of Mr. Canon's unvested shares will vest if he remains employed for six months after the change of control, or resigns within six months due to relocation over 35 miles from our offices or material reduction in title or compensation. If Mr. Canon is terminated other than for cause within twelve months of a change in control, 100% of his then unvested shares will vest. If terminated other than for cause at any time, Mr. Canon is entitled to, among other things, six months salary and benefits. Mr. Lawler serves as our Vice President of Human Resources. On May 9, 2000 we entered into an employment agreement with Mr. Lawler. Mr. Lawler's annual salary is currently $135,000, and he is also eligible for an annual performance-based bonus. In the event of a change of control, 50% of Mr. Lawler's unvested shares will vest if he remains employed for six months after the change of control, or resigns due to a material reduction in title or compensation. If terminated other than for cause at any time, Mr. Lawler is entitled to, among other things, six months salary and benefits. 47 Summary Compensation The following table provides information about the compensation for Switchboard's last three fiscal years (2002, 2001 and 2000) of Switchboard's Chief Executive Officer during fiscal 2002, plus the four other most highly compensated executive officers as of the end of fiscal 2002. In accordance with the rules of the Securities and Exchange Commission, the compensation set forth in the table below does not include medical, group life or other benefits which are available to all of our salaried employees, and perquisites and other personal benefits, securities or property which do not exceed the lesser of $50,000 or 10% of the total annual salary and bonuses for each of the persons shown in the table. Summary Compensation Table

1. In January 2002, Mr. Greenlaw purchased 450,000 restricted shares of our common stock for an aggregate purchase price of $1,449,000, or $3.22 per share. The purchase price represented the fair market value of the stock on the date of purchase. These shares constituted all of the shares of restricted stock held by Mr. Greenlaw at December 31, 2002. The shares are entitled to any dividends we may pay on our common stock. The Company has repurchased 225,000 of the shares held by Mr. Greenlaw. 2. Represents compensation for unused vacation time. 3. Mr. Orlando joined Switchboard in October 2001. 4. Mr. Lawler joined Switchboard in May 2000 and became an executive officer in January 2001. 48 Option Grants in Last Fiscal Year The following table contains information concerning stock option grants made in 2002 to each of the executive officers identified in the Summary Compensation Table above. Each stock option grant has a term of ten years and vests as to 25% of the total shares available for grant under such option as of the first anniversary of the date of grant. Every three months thereafter, an additional 6.25% of the shares vests on a schedule that ends on the four-year anniversary of the grant date. The per share exercise price of all options described below represents the fair market value of our common stock on the grant date, unless otherwise noted. Amounts described in the following table under the heading "Potential Realizable Value at Assumed Rates of Stock Price Appreciation for Option Term" represent hypothetical gains that could be achieved for the options if exercised at the end of the option term. These gains are based on assumed rates of stock appreciation of 5% and 10% compounded annually from the date the options were granted to their expiration date. Actual gains, if any, on stock option exercises will depend on the future performance of the common stock and the date on which the options are exercised. No gain to the optionees is possible without an appreciation in stock price, which will benefit all stockholders commensurately.

49 Aggregated Option Exercises in Last Fiscal Year and Year-End Option Values The following table sets forth information concerning options exercised during 2002 by each of the executive officers identified in the Summary Compensation Table above and the number and value of unexercised stock options held by each of those executive officers. Amounts described in the following table under the heading "Value of Unexercised In-the-Money Options at Year End" are based on the aggregate fair market value of the underlying shares of common stock on December 31, 2002 ($2.99 per share), less the aggregate option exercise price. Amounts described in the following table under the heading "Value Realized" represent the difference between the aggregate fair market value of the underlying shares of common stock on the date of exercise and the aggregate exercise price. Amounts described in the following table under the heading "Number of Shares Underlying Unexercised Options at Year-End" include stock options that are exercisable subject to the Company's right to repurchase at their exercise price, as described in "Security Ownership of Certain Beneficial Owners and Management." Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

Equity Compensation Plan Information

(1) Includes 205,291 shares issuable under our 1999 Employee Stock Purchase Plan, of which up to 62,496 shares are issuable in connection with the current offering period which ends on August 29, 2003. Also includes 1,656,031 shares issuable under our 1999 Stock Incentive Plan. In addition to being available for future issuance upon exercise of options that may be granted after December 31, 2002, all shares available for issuance under the 1999 Stock Incentive Plan may be issued in the form of restricted stock or other stock-based awards. (2) Consists of shares issuable under our 2000 Envenue Nonstatutory Stock Option Plan. In addition to being available for future issuance upon exercise of options that may be granted after December 31, 2002, all shares available for issuance under the 2000 Envenue Nonstatutory Stock Option Plan may be issued in the form of restricted stock or other stock-based awards. Benefit Plans 1996 Stock Incentive Plan Our 1996 stock incentive plan was adopted by our board of directors and approved by our stockholders in September 1996. The 1996 plan authorizes the issuance of up to 3,000,000 shares of our common stock. As of September 4, 2003, 50 options to purchase an aggregate of 1,324,300 shares of our common stock at a weighted average exercise price of $4.85 per share were outstanding under the 1996 plan. No additional grants of stock options or other awards may be made under the 1996 plan. 1999 Stock Incentive Plan Up to 4,051,890 shares of our common stock (subject to adjustment in the event of stock splits and other similar events) may be issued pursuant to awards granted under our 1999 stock incentive plan. The 1999 plan is intended to replace our 1996 plan. Of the 4,051,890 total shares authorized under the plan, 1,276,890 were transferred from the 1996 plan. The 1999 plan provides for the grant of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code, nonstatutory stock options, restricted stock awards and other stock-based awards. The granting of awards under the 1999 plan is discretionary. Our officers, employees, directors, consultants and advisors and those of our subsidiaries are eligible to receive awards under the 1999 plan. Under present law, however, incentive stock options may only be granted to employees. No participant may receive any award for more than 1,000,000 shares in any calendar year. As of September 4, 2003, approximately 71 persons would have been eligible to receive awards under the 1999 plan, including four executive officers and four non-employee directors. Optionees receive the right to purchase a specified number of shares of our common stock at a specified option price and subject to such other terms and conditions as are specified in connection with the option grant. We may grant options at an exercise price less than, equal to or greater than the fair market value of our common stock on the date of grant. Under present law, incentive stock options and options intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code may not be granted at an exercise price less than the fair market value of the common stock on the date of grant or less than 110% of the fair market value in the case of incentive stock options granted to optionees holding more than 10% of the voting power of Switchboard. The 1999 plan permits our board of directors to determine how optionees may pay the exercise price of their options, including by cash, check or in connection with a "cashless exercise" through a broker, by surrender to us of shares of common stock, by delivery to us of a promissory note, or by any combination of the permitted forms of payment. Our board of directors administers the 1999 plan. Our board of directors has the authority to adopt, amend and repeal the administrative rules, guidelines and practices relating to the plan and to interpret its provisions. It may delegate authority under the 1999 plan to one or more committees of the board of directors. Subject to any applicable limitations contained in the 1999 plan, our board of directors or a committee of the board of directors or executive officer to whom our board of directors delegates authority, as the case may be, selects the recipients of awards and determines: * the number of shares of common stock covered by options and the dates upon which such options become exercisable; * the exercise price of options; * the duration of options; and * the number of shares of common stock subject to any restricted stock or other stock-based awards and the terms and conditions of such awards, including the conditions for repurchase, issue price and repurchase price. In the event of a merger, liquidation or other acquisition event, our board of directors is authorized to provide for outstanding options or other stock-based awards to be assumed or substituted for by the acquiror. If the acquiror refuses to assume or substitute for outstanding options, the board shall provide that up to 25% of all then unvested and outstanding options will accelerate to become exercisable in full prior to consummation of the acquisition event. The remaining 75% of the unvested and outstanding options will also accelerate, but are subject to a repurchase right at the option exercise price. However, in the event that an acquisition event results in the holders of common stock receiving a cash payment for each share surrendered, then the board may instead provide that all then outstanding options, without regard to any acceleration, shall terminate upon consummation of the acquisition event and that each participant shall receive a cash payment for all options then outstanding in exchange therefor. The board may, at any time, accelerate the vesting of options granted under the 1999 plan. Participants in the 1999 plan who have received options have the right to exercise such options prior to the time they become vested. Upon an exercise of unvested options, participants receive shares of restricted stock that are subject to the same vesting schedule as the original options. 51 No award may be granted under the 1999 plan after October 2009, but the vesting and effectiveness of awards previously granted may extend beyond that date. Our board of directors may at any time amend, suspend or terminate the 1999 plan, except that no award granted after an amendment of the 1999 plan and designated as subject to Section 162(m) of the Internal Revenue Code by our board of directors shall become exercisable, realizable or vested, to the extent the amendment was required to grant such award, unless and until such amendment is approved by our stockholders. 2000 Non-Statutory Stock Option Plan Under our 2000 Non-Statutory Stock Option Plan, all of the Company's employees, consultants and advisors, other than those who are officers or directors of the Company, are eligible to be granted options, restricted stock awards or other stock-based awards for up to 446,000 shares of common stock. As of September 4, 2003, options to purchase 204,201 shares are outstanding under the plan, with an average exercise price of $3.26 per share Our board of directors administers the 2000 plan. Our board of directors has the authority to adopt, amend and repeal the administrative rules, guidelines and practices relating to the plan and to interpret its provisions. It may delegate authority under the 2000 plan to one or more executive officers or committees of the board of directors. Subject to any applicable limitations contained in the 2000 plan, our board of directors or a committee of the board of directors or executive officer to whom our board of directors delegates authority, as the case may be, selects the recipients of awards and determines: * the number of shares of common stock covered by options and the dates upon which such options become exercisable; * the exercise price of options; * the duration of options; and * the number of shares of common stock subject to any restricted stock or other stock-based awards and the terms and conditions of such awards, including the conditions for repurchase, issue price and repurchase price. In the event of a merger, liquidation or other acquisition event, our board of directors is authorized to provide for outstanding options or other stock-based awards to be assumed or substituted for by the acquiror. If the acquiror refuses to assume or substitute for outstanding options, the board shall provide that up to 25% of all then unvested and outstanding options will accelerate to become exercisable in full prior to consummation of the acquisition event. The remaining 75% of the unvested and outstanding options will also accelerate, but are subject to a repurchase right by the Company at the option exercise price. However, in the event that an acquisition event results in the holders of common stock receiving a cash payment for each share surrendered, then the board may instead provide that all then outstanding options, without regard to any acceleration, shall terminate upon consummation of the acquisition event and that each participant shall receive a cash payment for all options then outstanding in exchange therefor. The board may, at any time, accelerate the vesting of options granted under the 2000 plan. Participants in the 2000 plan who have received options have the right to exercise such options prior to the time they become vested. Upon an exercise of unvested options, participants receive shares of restricted stock that are subject to the same vesting schedule as the original options. 1999 Employee Stock Purchase Plan Under our 1999 employee stock purchase plan, up to a total of 300,000 shares of our common stock may be issued to participating employees. The following employees, including our directors who are employees and employees of any participating subsidiaries, are eligible to participate in the purchase plan: * Employees who are customarily employed for more than 20 hours per week; * and for more than five months per year; and * Employees employed for at least three months prior to enrolling in the purchase plan. 52 Employees who would immediately after the grant own 5% or more of the total combined voting power or value of our stock or any subsidiary are not eligible to participate. As of September 4, 2003, approximately 67 of our employees would have been eligible to participate in the purchase plan. On the first day of a designated payroll deduction period, or "offering period", we will grant to each eligible employee who has elected to participate in the purchase plan an option to purchase shares of our common stock as follows: the employee may authorize between 1% to 10% of his or her base pay to be deducted by us from his or her base pay during the offering period. On the last day of this offering period, the employee is deemed to have exercised the option, at the option exercise price, to the extent of accumulated payroll deductions. Under the terms of the purchase plan, the option price is an amount equal to 85% of the per share closing price of our common stock on either the first day or the last day of the offering period, whichever is lower. No employee is permitted to purchase shares exceeding a total value of $25,000 for each calendar year, or exceeding a total value of $12,500 for each of our semi-annual offering periods. The board of directors will choose the timing and length of offering periods under the purchase plan. An employee who is not a participant on the last day of the offering period is not entitled to exercise any option, and the employee's accumulated payroll deductions will be refunded. An employee's rights under the purchase plan terminate upon voluntary withdrawal from the purchase plan at any time, or when the employee ceases employment for any reason. 401(k) Plan In 2001, our board of directors adopted an employee savings and profit sharing plan qualified under Section 401(k) of the Internal Revenue Code covering all of our employees. Pursuant to the plan, employees may elect to reduce their current compensation by up to the statutorily prescribed annual limit and have the amount of such reduction contributed to the plan. Our board of directors initially elected to match employee's elective deferrals to the plan based upon a prescribed formula. The maximum matching contribution was 2% of an employee's annual compensation. Vesting is over a four-year period and begins on the date of hire. In December 2001, our board of directors elected to modify the matching of employee's elective deferrals from a prescribed formula to a discretionary decision by the board. We did not match employee contributions in 2002, or in 2003 to date. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Douglas J. Greenlaw In January 2002 Switchboard loaned Douglas J. Greenlaw, its former Chief Executive Officer, the sum of $1,449,000. The loan, which is evidenced by Mr. Greenlaw's promissory note in the principal amount of $1,449,000, bears interest at the rate of 4.875%, compounded annually, and is due and payable on December 1, 2003. Mr. Greenlaw used all of the proceeds from the loan to pay for 450,000 shares of the Company's common stock, which he purchased pursuant to a Restricted Stock Purchase Agreement between him and the Company dated January 4, 2002. Mr. Greenlaw resigned effective September 2, 2003. As of September 2, 2003, and in accordance with the existing terms of our agreement, the Company repurchased 225,000 shares from Mr. Greenlaw in exchange for cancellation of indebtedness under the loan in the amount of $724,500. ePresence, Inc. As of September 4, 2003, ePresence beneficially owned approximately 51.9% of our common stock. A change in control of Switchboard occurred upon the closing of the Restructuring Agreement among Switchboard, Viacom, Inc., and ePresence dated August 28, 2001. At the closing, among other things, Switchboard repurchased from Viacom 7,488,560 shares of our common stock then held by Viacom. As the result of this repurchase, ePresence became the owner of the majority of Switchboard's issued and outstanding common stock. At the close of this offering, ePresence will beneficially own approximately 5.7% of our common stock or, if the over-allotment option is exercised in full, none of our common stock. Additionally, ePresence has the benefit of demand registration rights, whereby they may request that we register their shares under certain circumstances. For more information on our relationship with ePresence, see the sections in this prospectus titled "Management- Compensation Committee Interlocks and Insider Participation" and "Description of Capital Stock: Registration Rights." America Online, Inc. As of September 4, 2003, AOL beneficially owned approximately 7.9% of our common stock. In December 2000, we entered into a Directory and Local Advertising Platform Services Agreement with AOL, under which we formed a 53 technology, marketing and services alliance with AOL to develop a new directory and local advertising platform and product set to be featured across specified AOL properties. In October 2003, we substantially renegotiated the provisions of the Directory Agreement, and we and AOL amended and restated the directory agreement to reflect these changes. The Agreement provides that we will receive $4.8 million annually from AOL, payable in monthly increments of $400,000, in exchange for providing, maintaining and customizing the AOL yellow pages directory platform and inclusion of approximately 10,000 current AOL merchants in our yellow pages platform. In addition, the Agreement creates the opportunity for both parties to share in revenue generated from advertising products that combine both AOL and Switchboard's consumer audience. The revenue sharing arrangement, based on a percentage of AOL merchant subscription revenue, that was previously in effect has been eliminated. In addition, the October 2003 amendment creates the opportunity for both parties to share in revenue generated from advertising products that provide local and national merchant advertisers with access to the combined consumer audience of both AOL and Switchboard yellow pages. The revenue sharing arrangement, based on percentage of AOL merchant subscription revenue, that was previously in effect has been eliminated. Under the new amendment, Switchboard and AOL will be able to sell advertising products offering national and local advertisers the combined distribution, or consumer audience, of both the AOL and Switchboard yellow pages. Switchboard and AOL will share in resulting revenue associated with the sale of the combined products. AOL and Switchboard are now able to sell advertising products offering local merchants and national advertisers access to the combined consumer audience of both AOL and Switchboard's yellow pages. The Directory Agreement as amended expires on December 11, 2005, with the option to extend by mutual agreement of the parties. In the event that the Agreement is terminated pursuant to the terms of the Agreement, the parties will begin a "Wind-Down Period" for a period of time to be determined by AOL, up to a maximum of three years from the date of termination. During the Wind-Down Period, we will continue to provide AOL with directory platform services, and AOL shall pay us a monthly fee of $250,000 (reduced from $400,000 per month) and shall also pay us for any engineering hours in excess of 300 hours per month. See "Management's Discussion and Analysis of Financial Condition and Results of Operation-- Significant Relationship." If we renew the Directory Agreement with AOL for at least an additional four years after the initial term, we agreed to issue to AOL a warrant to purchase up to 721,385 shares of common stock at a per share purchase price of $4.32. Additionally, AOL has the benefit of demand registration rights, whereby they may request that we register their shares under certain circumstances. For more information on AOL's registration rights, see the section in this prospectus entitled "Description of Capital Stock: Registration Rights." In fiscal 2002, we received a total of $7.4 million in payments from AOL, and we paid AOL a total of $2.0 million. In fiscal 2003, we have received a total of $3.2 million in payments from AOL through June 30, 2003. 54 PRINCIPAL AND SELLING STOCKHOLDERS The following table shows how much Switchboard common stock was beneficially owned as of September 4, 2003 by: * each selling stockholder * each entity or person who is known to us to own 5% or more of Switchboard's common stock * each director * each executive officer listed in the Summary Compensation Table * all directors and executive officers as a group. As of September 4, 2003, there were 18,900,173 shares of Switchboard's common stock issued and outstanding. The address of each of our executive officers and directors listed below is c/o Switchboard Incorporated, 120 Flanders Road, Westborough, Massachusetts 01581.

----------------- * Less than 1%. (1) This table is based upon information supplied by officers and directors, and upon reports filed by principal stockholders under Section 13(d) or 13(g) of the Securities Exchange Act of 1934. Unless otherwise indicated in the footnotes to this table, each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 18,900,173 shares of common stock outstanding on September 4, 2003. The number of shares beneficially owned by each stockholder is determined under rules promulgated by the Securities and Exchange Commission. The information is not necessarily indicative of beneficial ownership for any other purpose. 55 (2) For purposes of calculating the ownership percentage of individual directors and officers, the number of shares deemed outstanding includes 18,900,173 shares of Switchboard's common stock issued and outstanding as of September 4, 2003 plus any shares subject to options held by the individual in question which are exercisable on or before November 3, 2003. (3) Assumes full exercise of the underwriters' over-allotment option. (4) 1,121,260 of these shares are held directly by America Online, Inc., a wholly-owned subsidiary of Time Warner Inc. 375,000 of these shares are held directly by Digital City, Inc., a wholly-owned subsidiary of America Online, Inc. (5) James M. Canon. Consists of shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, 25,284 of which would be subject to Switchboard's right to repurchase at their exercise price. (6) William P. Ferry. Includes 170,000 shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, of which 30,000 would be subject to Switchboard's right to repurchase at their exercise price. Mr. Ferry is President, Chief Executive Officer and Chairman of the Board of Directors of ePresence and as of September 4, 2003 beneficially owned 2,067,500 shares, or approximately 8.5%, of ePresence's common stock. Mr. Ferry disclaims beneficial ownership of 9,802,421 shares of Switchboard common stock beneficially owned by ePresence. (7) Kevin P. Lawler. Includes 75,000 shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, 21,063 of which would be subject to Switchboard's right to repurchase at their exercise price. (8) Robert P. Orlando. Consists of shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, 150,625 of which would be subject to Switchboard's right to repurchase at their exercise price. (9) Dean Polnerow. Includes 638,000 shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, 106,625 of which would be subject to Switchboard's right to repurchase at their exercise price. As of September 4, 2003, Mr. Polnerow also owned 4,000 shares, or less than 1%, of the issued and outstanding common stock of ePresence. (10) Richard M. Spaulding. Includes 111,250 shares of our common stock issuable pursuant to options exercisable on or before November 4, 2003, 30,000 of which would be subject to Switchboard's right to repurchase at their exercise price. Also includes 1,000 shares of our common stock held by Mr. Spaulding's spouse. Mr. Spaulding is Senior Vice President and Chief Financial Officer of ePresence, and as of September 4, 2003 beneficially owned 349,413 shares, or approximately 1.5%, of ePresence's common stock. Mr. Spaulding disclaims beneficial ownership of 9,802,421 shares of Switchboard common stock beneficially owned by ePresence. (11) David N. Strohm. Includes 70,000 shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, 30,000 of which would be subject to Switchboard's right to repurchase at their exercise price. (12) Robert M. Wadsworth. Consists of shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, 30,000 of which would be subject to Switchboard's right to repurchase at their exercise price. Mr. Wadsworth is a director of ePresence and as of September 4, 2003 beneficially owned 4,004,380 shares, or approximately 16.6%, of ePresence's common stock, including 3,947,380 shares beneficially owned by an investment fund with which he is affiliated, and of which he disclaims beneficial ownership except to the extent of his pecuniary interest therein. Mr. Wadsworth disclaims beneficial ownership of 9,802,421 shares of Switchboard common stock beneficially owned by ePresence. (13) Includes 1,730,050 shares issuable upon the exercise of options exercisable on or before November 3, 2003, 423,597 of which would be subject to Switchboard's right to repurchase at their purchase price. (14) 1,121,260 of these shares are held directly by America Online, Inc., a wholly-owned subsidiary of Time Warner Inc. 375,000 of these shares are held directly by Digital City, Inc., a wholly-owned subsidiary of America Online, Inc. (15) James M. Canon. Consists of shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, 25,284 of which would be subject to Switchboard's right to repurchase at their exercise price. 56 (16) William P. Ferry. Includes 145,000 shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, of which 30,000 would be subject to Switchboard's right to repurchase at their exercise price. Mr. Ferry is President, Chief Executive Officer and Chairman of the Board of Directors of ePresence and as of September 4, 2003 beneficially owned 2,067,500 shares, or approximately 8.5%, of ePresence's common stock. Mr. Ferry disclaims beneficial ownership of 9,802,421 shares of Switchboard common stock beneficially owned by ePresence. (17) Kevin P. Lawler. Includes 60,000 shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, 21,063 of which would be subject to Switchboard's right to repurchase at their exercise price. (18) Robert P. Orlando. Consists of shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, 150,625 of which would be subject to Switchboard's right to repurchase at their exercise price. (19) Dean Polnerow. Includes 638,000 shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, 106,625 of which would be subject to Switchboard's right to repurchase at their exercise price. As of September 4, 2003, Mr. Polnerow also owned 4,000 shares, or less than 1%, of the issued and outstanding common stock of ePresence. (20) Richard M. Spaulding. Includes 105,000 shares of our common stock issuable pursuant to options exercisable on or before November 4, 2003, 30,000 of which would be subject to Switchboard's right to repurchase at their exercise price. Also includes 1,000 shares of our common stock held by Mr. Spaulding's spouse. Mr. Spaulding is Senior Vice President and Chief Financial Officer of ePresence, and as of September 4, 2003 beneficially owned 349,413 shares, or approximately 1.5%, of ePresence's common stock. Mr. Spaulding disclaims beneficial ownership of 9,802,421 shares of Switchboard common stock beneficially owned by ePresence. (21) David N. Strohm. Includes 70,000 shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, 30,000 of which would be subject to Switchboard's right to repurchase at their exercise price. (22) Robert M. Wadsworth. Consists of shares of our common stock issuable pursuant to options exercisable on or before November 3, 2003, 30,000 of which would be subject to Switchboard's right to repurchase at their exercise price. Mr. Wadsworth is a director of ePresence and as of September 4, 2003 beneficially owned 4,004,380 shares, or approximately 16.6%, of ePresence's common stock, including 3,947,380 shares beneficially owned by an investment fund with which he is affiliated, and of which he disclaims beneficial ownership except to the extent of his pecuniary interest therein. Mr. Wadsworth disclaims beneficial ownership of 9,802,421 shares of Switchboard common stock beneficially owned by ePresence. (23) Includes 1,603,800 shares issuable upon the exercise of options exercisable on or before November 3, 2003, 423,597 of which would be subject to Switchboard's right to repurchase at their purchase price. We will pay all costs and expenses of this offering, other than the underwriting discount relating to shares sold by the selling stockholders, the fees and disbursements of separate legal counsel and other advisors to the selling stockholders and stock transfer and other taxes attributable to the sale of shares by the selling stockholders, which will be paid by the selling stockholders. 57 DESCRIPTION OF CAPITAL STOCK We are authorized to issue 85,000,000 shares of common stock, $.01 par value per share, and 5,000,000 shares of preferred stock, $0.01 par value per share. As of September 4, 2003, we had outstanding 18,900,173 shares of common stock held by 113 stockholders of record, and options to purchase an aggregate of 3,279,827 shares of our common stock. The following summary of certain provisions of our common stock, preferred stock, certificate of incorporation and by-laws is not intended to be complete. It is qualified by reference to the provisions of applicable law and to our certificate of incorporation and by-laws included as exhibits to the registration statement of which this prospectus is a part. See "Where You Can Find More Information." You should refer to, and read this summary together with, our certificate of incorporation and bylaws to review all of the terms of our common stock that may be important to you. Common Stock Under our amended and restated certificate of incorporation, holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. Accordingly, holders of a majority of the shares of common stock entitled to vote in any election of directors may elect all of the directors standing for election. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, subject to any preferential dividend rights of outstanding preferred stock. Upon our liquidation, dissolution or winding up, the holders of common stock are entitled to receive proportionately our net assets available after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. Our outstanding shares of common stock are, and the shares offered by us in this offering will be, when issued and paid for, fully paid and nonassessable. The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock, which we may designate, and issue in the future. Preferred Stock Under our amended and restated certificate of incorporation, our board of directors is authorized to issue shares of preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from acquiring, a majority of our outstanding voting stock. We have no present plans to issue any shares of preferred stock. Delaware Law and Certain Charter and By-Law Provisions We are subject to the provisions of Section 203 of the General Corporation Law of Delaware. Section 203 prohibits a publicly held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a period of three years after the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A "business combination" includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an "interested stockholder" is a person who, together with affiliates and associates, owns, or within the prior three years did own, 15% or more of the corporation's voting stock. Our certificate of incorporation provides that directors may be removed only for cause by the affirmative vote of the holders of at least seventy-five percent (75%) of our shares of capital stock entitled to vote. Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may only be filled by vote of a majority of our directors then in office, or by a sole remaining director. The limitations on the removal of directors and filling of vacancies could make it more difficult for a third party to acquire, or discourage a third party from acquiring, control of us. Provisions of Delaware law and our charter documents could make acquiring us and removing our incumbent officers and directors more difficult. These provisions are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of our company to negotiate with us first. We believe that the 58 benefits of increased protection of our ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure our company outweigh the disadvantages of discouraging such proposals because, among other things, negotiation of such proposals could result in an improvement of their terms. Our board of directors is divided into three classes of directors serving staggered three-year terms. As a result, approximately one-third of the board of directors will be elected each year. These provisions are likely to increase the time required for stockholders to change the composition of our board of directors. For example, in general at least two annual meetings will be necessary for stockholders to effect a change in the majority of our board of directors. Our certificate of incorporation also provides that any action required or permitted to be taken by our stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting and may not be taken by written action in lieu of a meeting. Our certificate of incorporation further provides that special meetings of the stockholders may only be called by our chairman of the board, president or board of directors. Under our by-laws, in order for any matter to be considered "properly brought" before a meeting, a stockholder must comply with certain advance notice requirements. These provisions could have the effect of delaying, until the next stockholders' meeting, stockholder actions which are favored by the holders of a majority of our outstanding voting securities. These provisions may also discourage a third party from making a tender offer for our common stock, because even if it acquired a majority of our outstanding voting securities, the third party would be able to take action as a stockholder (such as electing new directors or approving a merger) only at a duly called stockholders' meeting, and not by written consent. The General Corporation Law of Delaware provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation's certificate of incorporation or by-laws, unless a corporation's certificate of incorporation or by-laws, as the case may be, requires a greater percentage. Our certificate of incorporation and by-laws require the affirmative vote of the holders of at least 75% of the shares of our capital stock issued and outstanding and entitled to vote to amend or repeal any of the provisions described in the prior two paragraphs. Our certificate of incorporation contains certain provisions permitted under the General Corporation Law of Delaware relating to the liability of directors. The provisions eliminate a director's liability for monetary damages for a breach of fiduciary duty as a director, except in certain circumstances involving wrongful acts, such as the breach of a director's duty of loyalty or acts or omissions that involve intentional misconduct or a knowing violation of law. Further, our certificate of incorporation contains provisions to indemnify our directors and officers to the fullest extent permitted by the General Corporation Law of Delaware. We believe that these provisions will assist us in attracting and retaining qualified individuals to serve as directors. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling our board pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by a director, officer or controlling person of our board in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it us is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Registration Rights Upon completion of the Offering, AOL and ePresence, as the holders of approximately 2,583,510 shares of common stock (or just AOL with respect to its 1,496,260 shares if the over allotment option is exercised in full) may have the right to cause us to register their shares of common stock pursuant to various registration rights agreements as follows: Demand Registration Rights As of September 4, 2003, AOL holds 1,496,260 shares of our common stock that are entitled to the benefit of demand registration rights pursuant to the terms of registration rights agreements with us. Our obligation to register AOL's shares terminates on March 2, 2005, five years after our initial public offering. Under the terms of the registration rights agreements with AOL, we are not required to effect more than one registration on Form S-1 and in the aggregate, not more than two registrations on Forms S-1 and S-3. Incidental Registration Rights If we propose to register any of our securities under the Securities Act, either for our own account or for the account of other security holders 59 exercising registration rights, AOL and ePresence are entitled to notice of and to include shares of common stock in the registration. We are required to use our best efforts to effect that registration. The holders of these incidental rights are as follows: All of the demand and incidental registration rights are subject to various conditions and limitations, among them the right of the underwriters of an offering to limit the number of shares included in a registration and our right not to effect a requested registration within six months after the effective date of any other registration statement and the loss of registration rights for those shares eligible for sale under Rule 144(k). To the extent shares are eligible for sale under Rule 144(k), and therefore not entitled to registration, they could be sold without restriction or volume limitation by AOL or ePresence. Transfer Agent and Registrar The transfer agent and registrar for our common stock is EquiServe Trust Company, N.A. 60 UNDERWRITING Subject to the terms and conditions set forth in an underwriting agreement, each of the underwriters named below has severally agreed to purchase from us and the selling stockholders the aggregate number of shares of common stock set forth opposite their respective names below:

Of the 8,815,171 shares to be purchased by the underwriters, 100,000 shares will be purchased from us and 8,715,171 shares will be purchased from ePresence. The underwriting agreement provides that the obligations of the several underwriters are subject to various conditions, including approval of legal matters by counsel. The nature of the underwriters' obligations commits them to purchase and pay for all of the shares of common stock listed above if any are purchased. The underwriting agreement provides that we and the selling stockholders will indemnify the underwriters against liabilities specified in the underwriting agreement under the Securities Act, or will contribute to payments that the underwriters may be required to make relating to these liabilities. The underwriters expect to deliver the shares of common stock to purchasers on or about [ ] , 2003. Over-Allotment Option The selling stockholders have granted a 30-day over-allotment option to the underwriters to purchase up to 1,322,250 shares of our common stock at the public offering price, less the underwriting discount payable by us, as set forth on the cover page of this prospectus. If the underwriters exercise this option in whole or in part, then each of the underwriters will be separately committed, subject to the conditions described in the underwriting agreement, to purchase the additional shares of our common stock in proportion to their respective commitments set forth in the table above. Commissions and Discounts The underwriters propose to offer the shares of common stock directly to the public at the public offering price set forth on the cover page of this prospectus, and at this price less a concession not in excess of $[ ] per share of common stock to other dealers specified in a master agreement among underwriters who are members of the National Association of Securities Dealers, Inc. The underwriters may allow, and the other dealers specified may reallow, concessions not in excess of $[ ] per share of common stock to these other dealers. After this offering, the offering price, concessions and other selling terms may be changed by the underwriters. Our common stock is offered subject to receipt and acceptance by the underwriters and to the other conditions, including the right to reject orders in whole or in part. The following table summarizes the compensation to be paid to the underwriters by us and the proceeds, before expenses, payable to us and the selling stockholders:

61 Indemnification of the Underwriters We and the selling stockholders will indemnify the underwriters against some civil liabilities, including liabilities under the Securities Act and liabilities arising from breaches of our representations and warranties contained in the underwriting agreement. If we or the selling stockholders are unable to provide this indemnification, we and the selling stockholders will contribute to payments the underwriters may be required to make in respect of those liabilities. No Sales of Similar Securities We have agreed that for a period of 90 days after the date of this prospectus, we will not, without the prior written consent of Thomas Weisel Partners LLC, offer, sell, or otherwise dispose of any shares of common stock or any securities convertible into or exchangeable for shares of common stock except for the shares of common stock offered in this offering, the shares of common stock issuable upon exercise of outstanding options on the date this prospectus and the shares of our common stock that are issues under the option plans. Each of the selling stockholders have agreed that for a period of 90 days after the date of this prospectus, they will not, without the prior written consent of Thomas Weisel Partners LLC, offer, sell or otherwise dispose of any shares of common stock, or any securities convertible into or exchangeable for shares of common stock except for the shares of common stock offered in this offering. Nasdaq National Market Listing Our common stock is quoted on the Nasdaq National Market under the symbol "SWBD." Short Sales, Stabilizing Transactions and Penalty Bids In order to facilitate this offering, persons participating in this offering may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock during and after this offering. Specifically, the underwriters may engage in the following activities in accordance with the rules of the Securities and Exchange Commission. Short Sales. Short sales involve the sales by the underwriters of a greater number of shares than they are required to purchase in the offering. Covered short sales are short sales made in an amount not greater than the underwriters' over-allotment option to purchase additional shares from the selling stockholders in this offering. The underwriters may close out any covered short position by either exercising their over-allotment option to purchase shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. Naked short sales are any short sales in excess of such over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing Transactions. The underwriters may make bids for or purchases of the shares for the purpose of pegging, fixing or maintaining the price of the shares, so long as stabilizing bids do not exceed a specified maximum. Penalty Bids. If the underwriters purchase shares in the open market in a stabilizing transaction or syndicate covering transaction, they may reclaim a selling concession from the underwriters and selling group members who sold those shares as part of this offering. Stabilization and syndicate covering transactions may cause the price of the shares to be higher than it would be in the absence of these transactions. The imposition of a penalty bid might also have an effect on the price of the shares if it discourages presales of the shares. The transactions above may occur on the Nasdaq National Market or otherwise. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of our common stock. If these transactions are commenced, they may be discontinued without notice at any time. We estimate that our total expenses of this offering will be $700,000. 62 Other Relationships Thomas Weisel Partners LLC has performed investment banking and advisory services for us from time to time for which they have received customary fees and expenses. SG Cowen Securities Corporation has performed investment banking and advisory services for ePresence. The underwriters may, from time to time, engage in transactions with and perform services for us in the ordinary course of their business. LEGAL MATTERS The validity of the common stock being offered by us will be passed upon by Weil, Gotshal & Manges LLP, Boston, Massachusetts. Certain legal matters in connection with this offering will be passed upon for the underwriters by Shearman & Sterling LLP, New York, New York. Additional legal matters in connection with this offering will be passed upon for ePresence by Hale and Dorr LLP, Boston, Massachusetts. EXPERTS The consolidated financial statements of Switchboard Incorporated appearing in this prospectus at December 31, 2002 and 2001, and for the years then ended have been audited by Ernst & Young LLP, independent auditors, and for the year ended December 31, 2000, by PricewaterhouseCoopers LLP, independent auditors, as set forth in their respective reports thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of such firms as experts in accounting and auditing. WHERE YOU CAN FIND MORE INFORMATION We have filed with the Securities and Exchange Commission a registration statement on Form S-1 under the Securities Act for the common stock offered by this prospectus. This prospectus does not contain all of the information contained in the registration statement and the exhibits and schedules. For further information regarding us and the common stock offered by this prospectus, we refer you to the registration statement and to the exhibits and schedules. Statements made in this prospectus concerning the contents of any document referred to herein are not necessarily complete. With respect to each such document filed as an exhibit to the registration statement, we refer you to the exhibit for a more complete description of the matter involved. The registration statement and the exhibits and schedules may be inspected without charge at the public reference facilities maintained by the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the public reference facilities by calling the Securities and Exchange Commission at 1-800-SEC-0330. Copies of all or any part of the registration statement may be obtained from the Securities and Exchange Commission's offices upon payment of fees prescribed by the Securities and Exchange Commission. The Securities and Exchange Commission maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Securities and Exchange Commission. The address of the site is http://www.sec.gov. To obtain a copy of these filings at no cost, you may also ------------------ write or telephone us at the following address: Switchboard Incorporated, 120 Flanders Road, Westborough, Massachusetts 01581; (508) 898-8000. In addition, these filings may also be found, free of charge on our website at www.switchboard.com. Information on our website is not included or incorporated into, and does not otherwise form a part of, this prospectus. We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and file reports, proxy and information statements and other information with the Securities and Exchange Commission. Such reports are available for inspection and copying at the Securities and Exchange Commission's public reference rooms or its website, as noted above. 63 SWITCHBOARD INCORPORATED INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2002, 2001 and 2000 --------------------------------------------

F-1 REPORT OF INDEPENDENT AUDITORS The Board of Directors and Stockholders of Switchboard Incorporated We have audited the accompanying consolidated balance sheets of Switchboard Incorporated as of December 31, 2002 and 2001 and the related consolidated statements of operations, stockholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Switchboard Incorporated at December 31, 2002 and 2001 and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Boston, Massachusetts January 24, 2003, except as to the settlement of the lawsuit described in Note M, as to which the date is February 19, 2003 F-2 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Switchboard, Inc.: In our opinion, the consolidated statement of operations, shareholders' equity and cash flows for the year ended December 31, 2000 present fairly, in all material respects the results of operations and cash flows of Switchboard, Inc. and its subsidiaries for the year ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts February 1, 2001 F-3 SWITCHBOARD INCORPORATED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts)

See accompanying notes. F-4 SWITCHBOARD INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)

See accompanying notes. F-5 SWITCHBOARD INCORPORATED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands, except share amounts)

F-6 SWITCHBOARD INCORPORATED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands, except share amounts) (continued)

See accompanying notes. F-7 SWITCHBOARD INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

See accompanying notes. F-8 SWITCHBOARD INCORPORATED NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2002 A. Nature of Business Switchboard Incorporated, a Delaware corporation (the "Company"), commenced operations in February 1996. From the Company's inception (February 19, 1996) until March 7, 2000, the Company was a unit and later a subsidiary of ePresence Inc. (formerly Banyan Worldwide, "ePresence"). As of December 31, 2002, ePresence beneficially owned approximately 52.0% of the Company's common stock. The Company is a provider of local online advertising solutions for local merchant and national advertisers, enabled by its consumer oriented online yellow and white pages directory technology. The Company generates revenue primarily from merchant advertisements that are placed in the Switchboard-powered yellow pages platforms of its licensees, as well as in its own directory website, www.switchboard.com. The Company licenses its yellow pages platform to Internet portals, traditional yellow pages publishers and newspaper publishers. The Company operates in one business segment as a provider of advertising solutions through its web-hosted directory technologies and customized yellow pages platforms. The Company is subject to risks and uncertainties common to growing technology-based companies, including rapid technological change, growth and commercial acceptance of the Internet, acceptance and effectiveness of Internet advertising, dependence on principal products and third-party technology, new product development, new product introductions and other activities of competitors, dependence on key personnel, security and privacy issues, dependence on strategic customer and vendor relationships and limited operating history. The Company has also experienced substantial net losses since its inception and, as of December 31, 2002, had an accumulated deficit of $108.7 million. Such losses and accumulated deficit resulted from the Company's lack of substantial revenue and significantly increased costs incurred in the development of the Company's products and services, in the preliminary establishment of the Company's infrastructure and in the development of the Company's brand. The Company expects to continue to incur significant operating expenses in order to execute its current business plan, particularly sales and marketing and product development expenses. The Company believes that the funds currently available would be sufficient to fund operations through at least the next 12 months. B. Summary of Significant Accounting Policies Principles of Consolidation The accompanying financial statements, which are derived from both the independent books and records of the Company and its subsidiaries and the historical books and records of ePresence, include the assets, liabilities, revenues and expenses of the Company at historical cost. Intercompany accounts and transactions have been eliminated. These financial statements are intended to present management's estimates of the results of operations and financial condition of the Company as if it had operated as a stand-alone company since inception. Certain of the costs and expenses are management estimates of the cost of services provided by ePresence and its subsidiaries. As a result, the financial statements presented may not be indicative of the results that would have been achieved had the Company operated as a nonaffiliated entity. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities at the period end, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. F-9 Cash Equivalents and Marketable Securities The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Those instruments with maturities as of the balance sheet date between three and twelve months are considered to be short-term marketable securities, and investments with maturities as of the balance sheet date of greater than one year are classified as long-term marketable securities. Cash equivalents and marketable securities are carried at market, and consist primarily of interest bearing deposits with major financial institutions. In accordance with Statement of Financial Accounting Standards ("SFAS") No. 115 "Accounting for Certain Investments in Debt and Equity Securities" ("SFAS 115"), the Company classifies all of its marketable equity securities as available for sale securities. These securities are valued at fair value and consist primarily of U.S government securities, corporate and municipal issues and interest bearing deposits with major banks. Unrealized holdings gains and losses are reported as a component of accumulated other comprehensive income, a separate component of Stockholders' Equity. Other-than-temporary unrealized losses are reported as a component of other income (expense) within the Statement of Operations. In 2002, 2001 and 2000, purchases of marketable securities were $12.8 million, $81.9 million and $408.7 million respectively. In 2002, 2001 and 2000, proceeds from sales and maturities of marketable securities were $53.5 million, $79.5 million and $357.1 million, respectively. In 2002, the Company recorded $57,000 in realized losses on marketable securities. Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the following estimated asset lives: Computers, peripherals and servers.........3 years Office equipment.........................3-5 years Software...................................3 years Furniture and fixtures.....................5 years Leasehold improvements are depreciated over the asset's estimated useful life or the remaining life of the lease, whichever is shorter. Maintenance and repairs are charged to expense when incurred, while betterments are capitalized. When property is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective amounts and any gain or loss is reflected in operations. Goodwill and Intangibles The Company recorded amounts in excess of assets acquired pursuant to its acquisition of Envenue, Inc. ("Envenue") in November 2000 as goodwill. Pursuant to a distribution agreement the Company entered into with America Online, Inc. ("AOL", the "Directory Agreement"), the Company issued shares of its common stock to AOL. The value of these shares of common stock had been recorded as an intangible asset, and had been amortized on a straight-line basis over the life of the Directory Agreement. As of December 31, 2001, the Company evaluated the net realizable value of all of its assets related to AOL and Envenue as a result of lower than anticipated revenues in accordance with the Financial Accounting Standards Board ("FASB") SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("SFAS 121") and determined that both its assets related to AOL and Envenue had been impaired. As a result, the Company recorded a loss on impairment as a component of its fourth quarter of 2001 special charges to earnings (Notes F, G and R). Effective January 1, 2002, the Company adopted the provisions of SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). This statement affects the Company's treatment of goodwill and other intangible assets. The statement requires that goodwill existing at the date of adoption be reviewed for possible impairment and that impairment tests be periodically repeated, with impaired assets written down to fair value. Additionally, existing goodwill and intangible assets must be assessed and classified within the statement's criteria. The adoption of SFAS 142 did not have a material effect on the financial statements as of December 31, 2002 or for the year then ended. F-10 Impairment of Long-Lived Assets In accordance with SFAS No. 144 "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of" ("SFAS 144"), the Company periodically evaluates its long-lived assets for potential impairment. Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors including past operating results, budgets and economic projections, market trends and product development cycles. An impairment in the carrying value of each asset is assessed when the undiscounted expected future cash flows derived from the asset are less than its carrying value. The adoption of SFAS 144 did not have a material effect on the financial statements as of December 31, 2002 or for the year then ended. Advertising Expense Advertising costs are expensed as incurred and totaled $34,000, $15,430,000 and $16,719,000 in the years ended December 31, 2002, 2001 and 2000, respectively. In 2001 and 2000, the costs included $9,680,000 and $11,824,000 of non-cash advertising received from Viacom Inc. (formerly CBS Corporation) (Note L), respectively. Revenue Recognition The Company generates its revenue primarily from merchant advertising placements promoted in the Switchboard-powered directories of its licensees, as well as in its own directory website. Generally, revenue is recognized as services are provided, so long as no significant obligations remain and collection of the resulting receivable is probable. The Company believes that it is able to make reliable judgments regarding the creditworthiness of its customers based upon historical and current information available to the Company. There can be no assurances that the Company's payment experience with its customers will be consistent with past experience or that the financial condition of these customers will not decline in future periods, the result of which could be the failure to collect invoiced amounts. Some of these amounts could be material, resulting in an increase in the Company's provision for bad debts. The Company licenses its yellow pages platform to its licensees. Licensees can enter into a development and licensing arrangement with the Company whereby the Company creates and/or modifies a private labeled web-hosted directory platform. Once the web-hosted directory platform is operational, the Company also earns additional fees based on the number of merchants promoted within the platform. Revenue received by the Company for such development and licensing arrangements is deferred until such time as the customer accepts the platform. After acceptance by the customer, revenue from such development and licensing agreements is recognized ratably over the remaining life of the agreement. Any per merchant license fees or additional engineering and other services fees earned are recognized as earned due to their variable nature. In addition, included as an offset to revenue is consideration given to customers, for which the benefits of such consideration are not separately identifiable from the revenue obtained from those customers (Note C). The Company sells national and local advertisements in Switchboard.com through its direct sales force, as well as through third-parties. For these advertisements, the Company is generally paid a monthly fee based on the number of advertisements placed into www.switchboard.com. The Company recognizes this monthly fee as revenue as it is earned. Deferred revenue is principally comprised of billings relating to advertising agreements and licensing fees received pursuant to advertising or services agreements in advance of revenue recognition. Unbilled receivables are principally comprised of revenues earned and recognized in advance of invoicing customers, resulting primarily from contractually defined billing schedules. Risks, Concentrations and Uncertainties The Company invests its cash and cash equivalents primarily in deposits, money market funds and investment grade securities with financial institutions. The Company has not experienced any realized losses to date on its invested cash. F-11 A potential exposure to the Company is a concentration of credit risk in accounts receivable. The Company minimizes this risk by maintaining reserves for credit losses and, to date, such losses have been within management's expectations. As of December 31, 2002 and 2001, AOL accounted for 28.8% and 47.3% of accounts receivable, respectively. AOL accounted for 41.8% of net revenue for the year ended December 31, 2002. One customer accounted for 11.6% of net revenue in the year ended December 31, 2001. One customer accounted for 16.1% of net revenue for the year ended December 31, 2000. Income Taxes The Company accounts for income taxes under the liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates in effect for the year in which those temporary differences are expected to be recovered or settled. A deferred tax asset is established for the expected future benefit of net operating loss and tax credit carry-forwards. A valuation reserve against net deferred tax assets is required if, based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Fair Value of Financial Instruments The carrying amounts of the Company's financial instruments, which include cash equivalents, marketable securities, accounts receivable, accounts payable, accrued expenses and a note payable, approximate their fair values. F-12 Accounting for Stock-Based Compensation The Company accounts for stock-based awards to employees using the intrinsic value method as prescribed by Accounting Principles Board ("APB") No. 25, "Accounting for Stock Issued to Employees," ("APB 25") and related interpretations. Accordingly, no compensation expense is recorded for options issued to employees in fixed amounts and with fixed exercise prices at least equal to the fair market value of the Company's common stock at the date of grant. The Company has adopted the provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," ("SFAS 123") through disclosure only (Note O). All stock-based awards to non-employees are accounted for at their fair value in accordance with SFAS 123. In January 2003, FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment of FASB Statement No. 123" ("SFAS 148"), which provides alternative methods of transition for a voluntary change to a fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require prominent disclosures in annual financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. SFAS 148 is effective for the Company for the year ended December 31, 2002. The Company has determined that it will continue to account for stock-based compensation for employees under APB 25, and elect the disclosure-only alternative under SFAS 123 and provide the enhanced disclosures as required by SFAS 148. At December 31, 2002, the Company has three stock-based employee compensation plans, which are more fully described in Note Q. The Company accounts for those plans under the recognition and measurement principles of APB 25 and related interpretations. The table below illustrates the effect on the net loss if the Company had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation (in thousands, except per share data). Because options vest over several years and additional option grants are expected to be made in future years, the below pro-forma effects are not necessarily indicative of the pro-forma effects on future years.

F-13 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in each of the following periods:

The weighted average grant date fair values using the Black-Scholes option pricing model were $3.28, $3.99 and $5.85 during the years ended December 31, 2002, 2001 and 2000, respectively. Net Loss per Share and Pro Forma Net Loss per Share Basic net loss per share is computed using the weighted average number of shares of common stock outstanding less any restricted shares. In 2000, the net loss used in the calculation of basic net loss per share attributable to common stockholders is increased by the accrued dividends for the preferred stock outstanding in the period. Diluted net loss per share does not differ from basic net loss per share since potential common shares from conversion of preferred stock, stock options and warrants are antidilutive for all periods presented and are therefore excluded from the calculation. During the years ended December 31, 2002, 2001 and 2000, options to purchase 3,566,603, 4,206,080 and 3,526,080 shares of common stock, respectively, preferred stock convertible into none, none and one shares of common stock, respectively, warrants for 918,468, 918,468 and 1,451,937 shares of common stock, respectively, and restricted common stock of 300,000, 746,260 and none, respectively, were not included in the computation of diluted net loss per share since their inclusion would be antidilutive. Pro forma basic and diluted net loss per share have been calculated in 2000 assuming the conversion of all outstanding shares of preferred stock into common stock, as if the shares had converted immediately upon their issuance. Comprehensive Loss The Company adheres to SFAS No. 130, "Reporting Comprehensive Income", which requires companies to report all changes in stockholders' equity during a period, except those resulting from investment by owners and distribution to owners, in comprehensive income in the period in which they are recognized. Derivative Instruments and Hedging During 2002, 2001 and 2000, the Company had no derivative investments or accounting hedges in place. Recent Accounting Pronouncements In January 2002, the EITF issued Issue No. 01-14 "Income Statement Characterization of Reimbursements Received for "Out-of-Pocket" Expenses Incurred" ("EITF 01-14"), relating to the accounting for reimbursements received for out-of-pocket expenses. In accordance with EITF 01-14, reimbursements received for out-of-pocket expenses incurred should be characterized as revenue in the statement of operations. EITF 01-14 is effective for all financial reporting periods beginning after December 15, 2001 and upon adoption, there is a requirement to present comparative prior period financial information. The adoption of EITF 01-14 did not have an impact on the Company's financial position, results of operations or cash flows. In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS 146"), which addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies EITF Issue No. 94-3 "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)". SFAS 146 is effective for the Company on January 1, 2003. SFAS 146 creates a model whereby a liability is recognized at its fair value in the period in which it is incurred, rather than at the date of commitment to a plan. The Company does not expect the adoption of SFAS 146 to have a material impact on its financial position, results of operations and cash flows. F-14 In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others" (FIN 45). FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurement provisions of the interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002 and the disclosure requirements in this interpretation are effective for financial statements of interim or annual periods ending after December 15, 2002. The adoption of FIN 45 is not expected to have a material impact on the Company's financial position or results of operations. In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46) to clarify the conditions under which assets, liabilities and activities of another entity should be consolidated into the financial statements of a company. FIN 46 requires the consolidation of a variable interest entity by a company that bears the majority of the risk of loss from the variable interest entity's activities, is entitled to receive a majority of the variable interest entity's residual returns, or both. The provisions of FIN 46, required to be adopted in fiscal 2003, are not expected to have a material impact on the Company's financial position or results of operations. In November 2002, the EITF finalized its consensus on EITF Issue 00-21, "Revenue Arrangements with Multiple Deliverables" (EITF 00-21), which provides guidance on the timing and method of revenue recognition for sales arrangements that include the delivery of more than one product or service. EITF 00-21 is effective prospectively for arrangements entered into in fiscal periods beginning after June 15, 2003. Under EITF 00-21, revenue must be allocated to all deliverables regardless of whether an individual element is incidental or perfunctory. The Company does not expect the adoption of EITF 00-21 to have a material impact on its financial position, results of operations and cash flows. C. Adoption of EITF 01-9 Effective January 2002, the Company adopted Emerging Issues Task Force Issue 01-9 "Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products)" ("EITF 01-9"), which became effective for fiscal years beginning after December 15, 2001. The Company has concluded that EITF 01-9 is applicable to the accounting for its directory and local advertising platform services agreement with AOL ("Directory Agreement"). The 2000 and 2001 results have been adjusted to conform to the presentation required by EITF 01-9. Accordingly, the Company has decreased its merchant network revenue by $2,000,000, $4,000,000 and $412,000 for the years ended December 31, 2002, 2001 and 2000, respectively, and reduced its operating expenses by corresponding amounts for the same periods. The adoption of EITF 01-9 had no effect on net income or the Company's capital resources. The following table illustrates the effect of the application of EITF 01-9 (in thousands):

D. Concurrent Transactions The Company had no barter transactions in the year ended December 31, 2002. The Company had barter transactions totaling $836,000, or 9.0% of net revenue, and $1,630,000, or 8.2% of net revenue, for the years ended December 31, 2001 and 2000, respectively in which the Company received promotion in exchange for F-15 promotion on the Company's website or through direct e-mail distributions. Revenue from advertising barter has been valued based on similar cash transactions which occurred within six months prior to the date of the barter transaction in accordance with Emerging Issues Task Force Issue No. 99-17 "Accounting for Advertising Barter Transactions". The Company had no other concurrent transactions in the year ended December 31, 2002. The Company had other concurrent transactions totaling $42,000, or 0.4% of net revenue, and $3,940,000, or 19.8% of net revenue, for the years ended December 31, 2001 and 2000, respectively, in which the Company received certain marketing assets in exchange for promotion on the Company's website or through direct e-mail distributions. Revenues from other concurrent transactions are recorded at the fair value of the goods or services provided or received, whichever is more readily determinable. E. Property and Equipment Property and equipment consisted of the following at:

Depreciation expense for the years ended December 31, 2002, 2001 and 2000 was $1,521,000, $1,235,000 and $662,000, respectively. F. AOL In December 2000, the Company entered into a Directory Agreement with AOL to develop a new directory and local advertising platform and product set to be featured across specified AOL properties (the "Directory Platform"). In November 2001, April 2002, August 2002 and November 2002, certain terms of the agreement were amended. Under the four-year term of the amended Directory Agreement, the Company shares with AOL specified directory advertisement revenue. In general, the Company receives a majority of the first $12.0 million of such directory advertisement revenue, less any billable engineering revenue earned from AOL after June 30, 2002, and a lesser share of any additional directory advertisement revenue pursuant to the August 2002 amendment. The Company paid AOL and recorded an asset of $13.0 million at the signing of the Directory Agreement. Following the incorporation of the Directory Platform on the AOL.com, AOL Service and Digital City properties ("AOL Roll-In") in January 2002, the Company recorded a second asset and a liability related to future payments of $13.0 million. In April 2002, the Company established an additional asset and liability of $1.0 million and paid $2.0 million upon the execution of the April 2002 amendment. Under the April 2002 amended agreement, the Company was scheduled to make six additional quarterly payments of $2.0 million each, replacing the $13.0 million originally owed upon the AOL Roll-In. The August 2002 amendment, among other things, eliminated the $12.0 million in remaining additional payments established in the April 2002 amendment. AOL committed to pay the Company at least $2.0 million in consulting or service fees over the term of the agreement under a payment schedule which ended in September 2002, of which AOL has paid all $2.0 million and the Company has delivered all $2.0 million in services to AOL. In addition, the Company is required to provide up to 300 hours of engineering services per month to AOL at no charge, if requested by AOL for the term of the agreement. These 300 hours are provided to support the Directory Platform, from which we share in directory revenue over the term of the amended agreement. Any engineering services provided by the Company in excess of 300 hours per month are charged to AOL on a time and materials basis. AOL typically exceeds these 300 hours each month. In 2002 and 2001, consulting and service fees totaled $1.5 million and $1.9 million, respectively. The August 2002 amended Directory Agreement has an initial term of four years, expiring in December 2004, and is subject to earlier termination upon the occurrence of specified events, including, without limitation (1) the Company being acquired by one of certain third parties, or (2) AOL acquiring one of certain third parties and AOL pays the Company a termination fee of $25.0 million. F-16 In connection with entering into the Directory Agreement, in December 2000, the Company issued to AOL 746,260 shares of its common stock, which were restricted from transfer until the AOL Roll-In, which occurred on January 2, 2002. The Company also agreed to issue to AOL an additional 746,260 shares of common stock if the Directory Agreement continued after two years and a further 746,260 shares of common stock if the Directory Agreement continued after three years. Under the amended agreement, the requirement to issue additional shares upon the two and three-year continuations has been eliminated. If the Company renews the Directory Agreement with AOL for at least an additional four years after the initial term, it agreed to issue to AOL a warrant to purchase up to 721,385 shares of common stock at a per share purchase price of $4.32. The $13.0 million paid and the value of the stock issued upon the signing of the Directory Agreement was amortized on a straight-line basis over the original four-year estimated life of the agreement. As of December 2001, the remaining unamortized amounts were written down to zero as a result of an impairment analysis as of December 31, 2001 (Note R). In 2002, the Company recorded amortization based upon the remaining net book value of its AOL assets established upon the AOL Roll-In and April 2002 amendment on a straight-line basis over the remaining term of the amended agreement. As a result of the elimination in the August 2002 amendment of the remaining $12.0 million owed to AOL, an adjustment to amortization of consideration given to a customer of $482,000 was recorded in 2002, offsetting amortization recorded in the period. Throughout the remaining initial term of the amended agreement, the Company will no longer record amortization of consideration given to AOL as these assets are now fully amortized and no further consideration is due AOL. Amortization of assets related to AOL has been reflected as a reduction of revenue in accordance with EITF 01-9 (Note C). Revenue recognized from AOL, net of amortization of consideration given to AOL, was $4,906,000, or 41.8% of net revenue, and $26,000 for the years ended December 31, 2002 and 2001, respectively. There was no revenue from AOL in the year ended December 31, 2000. Net amounts due from AOL included in accounts receivable at December 31, 2002 and 2001 were $549,000 and $774,000, respectively. Unbilled receivables related to AOL at December 31, 2001 were $618,000. As of December 31, 2002, AOL beneficially owned 7.9% of the Company's outstanding common stock. G. Envenue Acquisition On November 24, 2000, the Company acquired Envenue, a wireless provider of advanced product searching technologies designed to drive leads to traditional retailers. The transaction was accounted for as a purchase. The total purchase price included consideration of $2.0 million in cash, which was to be paid on or before May 24, 2002, and $38,000 in recorded value of stock options to purchase 10,200 shares of the Company's common stock issued to non-employees. The Company did not pay the $2.0 million on or before May 24, 2002, as it was involved in a contractual dispute with the previous owners of Envenue. In June 2002, the Company placed $2.0 million into an escrow account, which is to be held until the resolution of this dispute. In October 2002, the Company paid $410,000 out of the escrowed funds, representing the undisputed portion of the purchase price plus interest from the original maturity date to the former stockholders of Envenue. The remaining $1.6 million of the note payable, which is non-interest bearing, is classified separately in the accompanying financial statements. The Company has recorded $1.6 million as restricted cash at December 31, 2002 related to the cash held in escrow. The Company used a 0% dividend yield, 100% expected volatility, 6.297% risk free interest rate, 5.0 year life and fair value of $4.750 per share as inputs to the Black-Scholes option pricing model to determine the value attributable to the options to purchase 10,200 shares of the Company's common stock. Additionally, there was an 18-month earn-out of up to $2.0 million contingent on performance to be paid on or before July 8, 2002. These performance criteria were not met, therefore no liability related to this contingency has been recorded. The estimated total purchase price of the Envenue acquisition, excluding any earn-out payment, is as follows (in thousands): Payable related to acquisition $2,000 Options issued to non-employees 38 Estimated expenses of transaction 79 ------ $2,117 ======

The purchase price allocation is as follows (in thousands): Net liabilities acquired $ (168) Goodwill 2,285 ----- $2,117 ======

F-17 The Company recorded $2,285,000 of goodwill from the acquisition in 2000. Goodwill represents the excess of the purchase price of an investment in an acquired business over the fair value of the underlying net identifiable assets. The Company was amortizing this goodwill on a straight-line basis using an estimated useful life of 5 years. In December 2001, the Company exercised its rights under the acquisition agreement to substantially reduce the funding of its Envenue acquisition. Additionally, the Company evaluated the carrying value of its goodwill in Envenue, and determined it would not be fully recovered through estimated undiscounted future operating cash flows. As a result during the three months ending December 31, 2001, the Company recorded an impairment charge of $1,859,000 related to the Envenue goodwill. This impairment charge was recorded as a component of special charges within our statement of operations (Note R). H. Other Assets Other assets totaling $95,000 at December 31, 2001 consisted of deferred project costs. Deferred project costs represent costs incurred that are directly associated with customer contracts for which the Company has not yet started recognizing revenue. These costs, which consist mainly of salary and benefits costs, are deferred until revenue on the related project is recognized in order to properly match revenue and associated expenses. Deferred costs are amortized over the same period as the related revenue, and are included in cost of revenue. The Company recognized expense of $95,000, $202,000 and $246,000 related to these deferred project costs in the years ended December 31, 2002, 2001 and 2000, respectively. Amortization expense for other assets, excluding deferred project costs and the value of stock issued under the Company's Directory Agreement, was none, $1,414,000 and $649,000 for the years ended December 31, 2002, 2001 and 2000, respectively, and is included in operating expenses. In December 2001, the Company wrote down the value of the stock issued under its Directory Agreement with AOL to zero as a result of an impairment analysis. The write down was included as a component of the Company's special charges recorded in December 2001 (See Notes F and T). F-18 I. Marketable Securities The following is a summary of investments at December 31, 2002 and 2001 (in thousands): 2002

2001

F-19 In August 1999, in connection with a Development, Access and License agreement with a third party, the Company was issued a warrant for 150,000 shares of common stock, with an exercise price of $9.19 per share. In December 2000, September 2001 and March 2002, the Company assessed a decline in market value of the third party's publicly traded common stock and determined that the decline in value was other-than-temporary. As a result, the Company recorded as a component of other income and expense unrealized losses on investments of $6,000, $55,000 and $714,000 in the years ended December 31, 2002, 2001 and 2000, respectively. In June 2002, the warrant expired. In June 2002, the Company entered into a loan and security agreement (the "SVB Financing Agreement") with Silicon Valley Bank ("SVB") (Note Q). As a result of the conditions contained within the SVB Financing Agreement, the Company liquidated $35.7 million in marketable securities previously held at Fleet for transfer to SVB. This liquidation resulted in $402,000 in realized gains during 2002. J. Accrued Expenses Accrued expenses consist of the following at:

K. Related Parties The Company and ePresence entered into a corporate services agreement dated November 1, 1996 under which ePresence's corporate staff provided certain administrative services, including financial and accounting and payroll advice, treasury, tax and insurance services for which the Company paid ePresence a monthly fee based on the Company's headcount and the level of services provided by ePresence. Under a revised agreement dated March 7, 2000, ePresence continued to provide certain administrative, technical support and equipment maintenance services for the Company. On March 7, 2001, the agreement expired. The Company and ePresence entered into a new corporate services agreement dated March 7, 2002, under which ePresence will provide the Company with telephone service and support only, for an amount of $75,000 per year. The new agreement included past services incurred since the March 7, 2001 expiration of the previous agreement, as well as future telephone services through February 28, 2003. As of December 31, 2002 and 2001, the Company had accrued expenses of $6,000 and $63,000 related to these services. For these services the Company paid ePresence $131,000, $29,000, and $195,000 in 2002, 2001 and 2000, respectively. Subsequently in March 2003, Switchboard entered into an agreement with ePresence to provide telephone service and support only from March 2003 through December 2003 for $62,500. Management believes that the service fees charged by ePresence are reasonable and that such fees are representative of the expenses the Company would have incurred on a stand-alone basis. For additional items such as legal support and support in financing and acquisition transactions, the Company is charged based on ePresence's labor costs for the employee performing the services. Further, the Company reimburses ePresence for its pro rata share of employee benefit plan expenses. F-20 The Company leased the space it occupied in 2002 under a sublease entered into in January 2001, which expired on December 31, 2002. Under the sublease, the Company paid approximately $475,000 and $488,000 to ePresence during 2002 and 2001, respectively, and had $43,000 accrued related to the lease as of December 31, 2002. Previous to this sublease agreement, the Company paid ePresence rent in an amount that was approximately equal to its pro rata share of ePresence's rent and occupancy costs. The Company's share of ePresence's rent and occupancy costs was $51,000 and $288,000 in 2001 and 2000, respectively. Subsequently, in January 2003, the Company entered into a new lease agreement with ePresence to lease the space it occupies for a total amount of $227,000, which expires on December 31, 2003. Certain directors of the Company hold positions as officers or directors of ePresence. The Chairman of the Board of Directors of the Company is also Chairman of the Board of Directors, President and Chief Executive Officer of ePresence. One director of the Company is Senior Vice President and Chief Financial Officer of ePresence. Another director of the Company is also a director of ePresence. In 2002, 2001 and 2000, no compensation was paid to these directors by the Company for their services other than option grants under the Company's equity incentive plans. L. Restructuring of Viacom Relationship In 1999, the Company and Viacom Inc. ("Viacom", formerly CBS Corporation) consummated a number of agreements under which Viacom acquired a 35% equity stake in Switchboard, through the issuance of 7,468,560 shares of the Company's common stock and one share of Series E Special Voting Preferred Stock. In exchange, the Company received $5,000,000 in cash and the right to receive advertising and promotional value over a term of seven years, across the full range of CBS media properties, as well as those of its radio and outdoor subsidiary, Infinity Broadcasting Corporation. As part of the transactions, Viacom was also issued warrants to purchase up to an additional 1,066,937 shares of the Company's common stock at a per share exercise price of $1.00, which would have increased its ownership position in the Company to 40% at the time of the transaction. The number of shares of common stock and warrants issued to Viacom were subject to adjustment in the event of certain future issuances of securities by the Company. The Advertising and Promotion Agreement dated as of June 30, 1999 among the Company, ePresence and Viacom provided advertising with a future value of $95 million to the Company over a seven-year period, subject to one year renewals upon the mutual written agreement of the Company, ePresence and Viacom. The net present value of the advertising was recorded as a contribution receivable for the common stock issued. The contribution receivable was reduced as the Company utilized advertising based on the proportion of advertising provided to the total amount to be provided over the seven-year term. In August 2001, the Company entered into a restructuring agreement with Viacom and ePresence, under which, among other things, the Company agreed to terminate its right to the placement of advertising on Viacom's CBS properties with an expected net present value of approximately $44,524,000 in exchange for, primarily, the reconveyance by Viacom to the Company of 7,488,560 shares of the Company's common stock, the cancellation of warrants held by Viacom to purchase 533,469 shares of the Company's common stock and the reconveyance to the Company of the one outstanding share of the Company's series E special voting preferred stock. In addition, as part of the restructuring of the Company's relationship with Viacom, its license to use specified CBS trademarks terminated on January 26, 2002. On October 26, 2001, the Company obtained approval for the restructuring agreement by its stockholders and closed the transactions contemplated by the restructuring agreement. At the closing, the two individuals who had been elected directors by Viacom pursuant to Viacom's rights as the holder of the Company's special voting preferred stock resigned as directors of the Company. Due to the reduction in the number of outstanding shares of the Company's stock associated with the closing, ePresence became the Company's majority stockholder, beneficially owning approximately 54% of the Company's outstanding stock on October 26, 2001. In connection with the termination of its advertising and promotion agreement with Viacom, the Company recorded a one-time, non-cash accounting loss of $22,203,000 in the Company's 2001 statement of operations. The non-cash accounting loss resulted from the difference between the net present value of the Company's remaining advertising rights with Viacom, which were terminated, and the value of the shares of the Company's common and preferred stock that were reconveyed and the warrants that were cancelled. The Company determined the value of the 7,488,560 shares of common stock reconveyed and one share of preferred stock cancelled to be $20,968,000 using the closing market price of the Company's common stock of $2.80 per share on October 26, 2001. The Company used the Black-Scholes warrant pricing model to determine a value of $1,352,544 attributable to the canceled warrants. F-21 Subsequently, on February 27, 2002, Viacom exercised its warrant pursuant to a cashless exercise provision in the warrant, resulting in the net issuance of 386,302 shares of common stock. On March 12, 2002, the Company repurchased these 386,302 shares of common stock from Viacom at a price of $3.25 per share, for a total cost of $1.3 million. The Company has recorded the value of these shares as treasury stock at cost. M. Commitments and Contingencies The Company leases facilities and certain equipment under non-cancelable lease agreements which expire at various dates through March of 2005. Under these agreements, the Company is obligated to pay for utilities, taxes, insurance and maintenance. Excluding rent paid to ePresence (Note K), the Company recorded rent expense of $17,000, $357,000 and $100,000 in the years ended December 31, 2002, 2001 and 2000, respectively. Under various agreements, the Company paid rent of approximately $517,000, $539,000 and $288,000 in 2002, 2001 and 2000 to ePresence, respectively. In addition, the Company has entered into certain license agreements, under which the Company is required to pay minimum royalty payments through October 2005 based upon the Company's revenue. At December 31, 2002, future minimum lease payments under operating leases, excluding our operating lease with ePresence, and license agreements with minimum terms exceeding one year are as follows (in thousands): 2003 $ 984 2004 650 2005 389 ---- ------ Total future minimum payments $2,023 ======

On May 31, 2002 the Company was sued by the former stockholders of Envenue, Inc., from whom the Company purchased all of the stock of Envenue in November 2000. The suit alleges that the Company breached its agreement with the plaintiffs by failing to pay the purchase price of the Envenue stock when it became due on May 24, 2002. The Company paid $400,000, plus interest, representing a portion of the purchase price, to the plaintiffs. The suit seeks payment of $1.6 million, representing the balance of the purchase price, plus additional unquantified damages including treble damages. The court heard oral argument on the Company's motion to dismiss the complaint in November 2002, and subsequently granted that motion in part. The plaintiffs subsequently amended their complaint. The Company has moved to dismiss the amended complaint and is awaiting the court's ruling on that motion. At this time the Company is unable to predict whether such motion to dismiss will be granted. On November 21, 2001, a class action lawsuit was filed in the United States District Court for the Southern District of New York naming as defendants Switchboard, the managing underwriters of Switchboard's initial public offering, Douglas J. Greenlaw, Dean Polnerow, and John P. Jewett. Mr. Greenlaw and Mr. Polnerow are officers of Switchboard, and Mr. Jewett is a former officer of Switchboard. In July 2002, the Company, Douglas J. Greenlaw, Dean Polnerow and John P. Jewett joined in an omnibus motion to dismiss which challenges the legal sufficiency of plaintiffs' claims. The motion was filed on behalf of hundreds of issuer and individual defendants named in similar lawsuits. The plaintiffs opposed the motion. On September 30, 2002, the lawsuit against Messrs. Greenlaw, Polnerow and Jewett was dismissed without prejudice. The Court heard oral argument on the motion in November 2002. On February 19, 2003, the court issued its decision on the defendants' motion to dismiss, denying it in large part, but granting portions of it. In doing so, the court dismissed the plaintiffs' claims against certain defendants, including Switchboard. The Company is currently involved in other legal proceedings that are incidental to the conduct of its business, none of which it believes could reasonably be expected to have a materially adverse effect on the Company's financial condition. N. Income Taxes The Company has not provided for income taxes in each of the years ended December 31, 2002, 2001 and 2000 due to its significant pre-tax losses. The Company has not recorded a benefit for income taxes as the Company believes it is more likely than not that net operating losses and tax credits will not be utilized. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The Company believes that sufficient F-22 uncertainty exists regarding the realizability of the deferred tax assets such that a valuation of $40,346,000 and $38,574,000 for December 31, 2002 and 2001, respectively, has been established for deferred tax assets. The components of the net deferred tax assets (liabilities) and the related valuation allowance are as follows:

As of December 31, 2002, the Company has net operating loss carryforwards for federal and state tax purposes of approximately $86,874,000 and $86,848,000, respectively. The federal and state net operating loss carryforwards will begin to expire in 2012 and 2002, respectively. Ownership changes resulting from the Company's issuance of capital stock may limit the amount of net operating loss carryforwards that can be utilized annually to offset future taxable income. O. Stock Option Plans In November 2000, with its acquisition of Envenue, the Company adopted the 2000 Non-Statutory Stock Option Plan ("2000 Non-Statutory Plan"). A total of 446,000 shares of common stock have been reserved for issuance under the 2000 Non-Statutory Plan. As of December 31, 2002, options to purchase 261,800 shares were issued and outstanding under the 2000 Non-Statutory Plan. In October 1999, the Company adopted the 1999 Stock Incentive Plan (the "1999 Option Plan"). A total of 4,044,390 shares of common stock have been reserved for issuance under the 1999 Option Plan. As of December 31, 2002, options to purchase 1,918,403 shares were issued and outstanding under the 1999 Option Plan. The 1999 Option Plan also permits awards of restricted stock at a price determined by the Compensation Committee or the Board of Directors subject to the Company's right to repurchase such stock in specified circumstances prior to the expiration of a restricted period. In January 2002, the Company issued 450,000 shares of restricted common stock to its Chief Executive Officer, who is also a director of the Company, at fair market value (Note S). As of December 31, 2002, 300,000 shares of such common stock remain unvested and are restricted from transfer. Switchboard also has the 1996 Stock Incentive Plan (the "1996 Option Plan"), which provides for the issuance of options to purchase 1,386,400 shares of Switchboard's common stock. As of December 31, 2002, options to purchase 1,386,400 shares were issued and outstanding under the 1996 Option Plan. F-23 Generally, options under the 1996, 1999 and 2000 Non-Statutory Option Plans vest over four years and have a maximum term of ten years. All options are fully exercisable upon the date of grant into shares of restricted stock, for which the restrictions laps over in accordance with the vesting under the original stock option grant. A summary of the status of the Company's stock plans as of December 31, 2002, 2001 and 2000 and the changes during the years ending on those dates is presented below.

F-24 As of December 31, 2002, 1,656,031 shares and 184,200 shares were available for grant under the 1999 Option Plan and the 2000 Non-Statutory Plan, respectively. There were no shares available for grant under the 1996 Option Plan. The following table summarizes information about the stock options at December 31, 2002:

In June 2001, the Company issued to a director and officer of the Company options to purchase 150,000 shares of its common stock under the 1999 Option Plan at a price below market value. The Company recorded $437,000 in value resulting from the difference between the market value on the date of grant of $3.91 per share and the $1.00 per share exercise price as unearned compensation as a component of Stockholders' Equity. The Company is amortizing this amount over the two-year and nine-month vesting period. In 2002 and 2001, the Company recognized $156,000 and $102,000 of amortization expense. In 1999, the Board of Directors adopted the 1999 Employee Stock Purchase Plan (the "Purchase Plan"). A total of 300,000 shares of the Company's common stock have been reserved for issuance to eligible employees under the Purchase Plan. Under the Purchase Plan, the Company is authorized to make a series of offerings during which employees may purchase shares of common stock through payroll deductions made over the term of the offering. The per-share purchase price at the end of each offering is equal to 85% of the fair market value of the common stock at the beginning or end of the offering period (as defined by the Purchase Plan), whichever is lower. As of December 31, 2002, 94,709 shares of common stock were issued under the Purchase Plan. P. Capital Lease In March 2001, the Company entered into a computer equipment sale-leaseback agreement with Fleet Capital Corporation ("FCC") under which the Company was able to lease up to $3.0 million of equipment. Under the agreement, the Company was to have leased computer equipment over a three-year period ending on June 28, 2004. At December 31, 2001, the Company had utilized approximately $1.1 million of this lease facility. The agreement had an estimated effective annual percentage rate of approximately 7.90%. Under the terms of the agreement, the Company was required to maintain on deposit with Fleet a compensating balance, restricted as to use, in an amount equal to the principal outstanding under the lease. The Company had accounted for the transaction as a capital lease. In May 2002, the Company paid $794,000 to FCC to terminate its lease obligations with FCC through an early buy-out. The $794,000 was comprised of F-25 $764,000 in outstanding principal under the lease and $30,000 in expenses associated with the early termination. In exchange for the amount paid, the Company assumed all right and title to the assets leased under the facility. Additionally, the Company's requirement to maintain a compensating balance with Fleet was eliminated. Q. Notes Payable and Line of Credit In June 2002, the Company entered into the SVB Financing Agreement, under which the Company has the ability to borrow up to $4.0 million for the purchase of equipment. Amounts borrowed under the facility accrue interest at a rate equal to prime plus 0.25%, and are repaid monthly over a 30 month period. As of December 30, 2002, the Company had utilized $2.7 million of this facility. The facility provided for the ability to fund additional equipment purchases of up to $1.3 million through March 31, 2003. The agreement also provides for a $1.0 million revolving line of credit at an interest rate equal to prime. At December 31, 2002, no borrowings were outstanding under the revolving line of credit. The Company has recorded a note payable to SVB on its balance sheet totaling $2.2 million for equipment financed as of December 31, 2002, of which $1.1 million is classified as a current liability. As a condition of the Financing Agreement, the Company is required to maintain in deposit or investment accounts at SVB not less than 95% of its cash, cash equivalents and marketable securities. Covenants in the Agreement require the Company to maintain in deposit or in investment accounts with SVB at least $20.0 million in unrestricted cash. Borrowings under the Agreement are collateralized by all of the Company's tangible and intangible assets, excluding intellectual property. R. Special Credits and Charges For the year ended December 31, 2002, the Company recorded the reversal of $262,000 in excess restructuring reserves as a special credit. This reversal resulted primarily from better than expected results in the subleasing of idle office space which the Company had reserved for as part of its 2002 special charges. Under a non-cancelable sublease, the Company received $72,000 in 2002, and anticipates receiving $144,000, $144,000 and $60,000 in 2003, 2004 and 2005, respectively. In December 2001, the Company recorded net pre-tax special charges of approximately $17.3 million, comprised primarily of $15.6 million for the impairment of certain assets, $1.0 million for costs related to facility closures and $700,000 in severance costs related to the reduction of approximately 21% of the Company's workforce. The restructuring resulted in 21 employee separations. Included in the $15.6 million impairment charge for certain assets is an amount recorded for the impairment of the unamortized portion of the value of the common stock issued and amounts prepaid to AOL. The Company assessed the value of its assets related to its AOL Directory Agreement for impairment as revenues were lower at the end of the first year of the Directory Agreement than originally anticipated. Based upon impairment analysis which indicated that the carrying amount of these assets would not be fully recovered through estimated undiscounted future operating cash flows, a charge of $11.7 million was recorded as an additional component of special charges during 2001. The impairment was measured as the amount by which the carrying amount of these assets exceeded the present value of the estimated discounted future cash flows attributable to these assets. In December 2001, the Company exercised its rights under the Envenue acquisition agreement to substantially reduce the funding of Envenue. The Company evaluated the carrying value of its goodwill in Envenue, and determined it would not be fully recovered through estimated undiscounted future operating cash flows. As a result during the three months ending December 31, 2001, the Company recorded as a component of the $15.6 million impairment charge, $1.9 million related to the Envenue goodwill. The impairment was measured as the amount by which the carrying amount of these assets exceeded the present value of the estimated discounted future cash flows attributable to these assets. Also included in the impairment charge for certain assets are amounts related to prepaid advertising expenses. As a result of our change in overall strategy from a destination site to a technology provider, the Company no longer considered this prepaid advertising to be complementary to its corporate strategy. Accordingly, the Company recorded $1.4 million for the impairment of these prepaid advertising assets. Of the total $1.4 million facilities and severance charge, which is net of the $262,000 special credit recorded in 2002, approximately $1.2 million is cash F-26 related. As of December 31, 2002, $1.3 million of the original $1.4 million accrual had been utilized. The Company has a remaining liability of $52,000 on its balance sheet as of December 31, 2002 relating to the special charges. S. Note Receivable for the Issuance of Restricted Common Stock In January 2002, the Company recorded a note receivable from its Chief Executive Officer, who is also a member of its Board of Directors, for approximately $1.4 million arising from the financing of a purchase of 450,000 shares of its common stock as restricted stock by that individual. As of December 31, 2002, 300,000 of such shares were unvested and restricted from transfer. On each of January 4, 2003, 2004, 2005 and 2006, 75,000 of these restricted shares vests, respectively. The note bears interest at a rate of 4.875%, which is deemed to be fair market value, compounding annually and is 100% recourse as to principal and interest. The note is payable upon the earlier of the occurrence of the sale of all or part of the shares by the issuer of the note, or January 4, 2008. At December 31, 2002, the Company has recorded $1.5 million in principal and interest as a note receivable classified within stockholders' equity. During 2002, the Company recorded $71,000 in interest income resulting from this note receivable. T. Condensed Quarterly Results of Operations (unaudited) In thousands except per share data:

(a) Operating loss and net loss attributable to common stockholders in the fiscal quarter ended December 31, 2001 includes a $22.2 million non-cash loss on Viacom transaction (See Note L) and a $17.3 million special charges (See Note R). F-27 SWITCHBOARD INCORPORATED CONSOLIDATED BALANCE SHEET (Unaudited, in thousands, except share and per share amounts)

See accompanying notes. F-28 SWITCHBOARD INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited; in thousands, except per share amounts)

See accompanying notes. F-29 SWITCHBOARD INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands)

See accompanying notes. F-30 SWITCHBOARD INCORPORATED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited) A. Basis of Presentation The accompanying unaudited consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, that, in the opinion of management, are necessary to present fairly the financial information set forth therein. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Results of operations for the three- and six-month periods ended June 30, 2003 are not necessarily indicative of future financial results. B. Accounting for Stock-Based Compensation The Company accounts for stock-based awards to employees using the intrinsic value method as prescribed by Accounting Principles Board ("APB") No. 25, "Accounting for Stock Issued to Employees," ("APB 25") and related interpretations. Accordingly, no compensation expense is recorded for options issued to employees in fixed amounts and with fixed exercise prices at least equal to the fair market value of the Company's common stock at the date of grant. The Company has adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," ("SFAS 123") through disclosure only. All stock-based awards to non-employees are accounted for at their fair value in accordance with SFAS 123. In January 2003, Financial Accounting Standards Board ("FASB") issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment of FASB Statement No. 123" ("SFAS 148"), which provides alternative methods of transition for a voluntary change to a fair value based method of accounting for stock-based employee compensation. The Company has determined that it will continue to account for stock-based compensation for employees under APB 25, and elect the disclosure-only alternative under SFAS 123 and provide the enhanced disclosures as required by SFAS 148. At June 30, 2003, the Company had three stock-based employee compensation plans. The Company accounts for those plans under the recognition and measurement principles of APB 25 and related interpretations. The table below illustrates the effect on the net loss if the Company had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation (in thousands, except per share data). Because options vest over several years and additional option grants are expected to be made in future periods, the pro-forma effects detailed below are not necessarily indicative of the pro-forma effects on future years.

F-31 C. Net Income (Loss) Per Share Basic net income (loss) per share is computed using the weighted average number of shares of common stock outstanding less any restricted shares. Diluted income (loss) per share includes the dilutive effect of potential common shares outstanding during the period. Potential common shares result from the assumed exercise of outstanding stock options and warrants, the proceeds of which are then assumed to have been used to repurchase outstanding common stock using the treasury stock method. Potential common shares also include the unvested portion of restricted stock. For the three and six months ended June 30, 2003, options to purchase 1,958,890 and 2,441,190 shares of common stock, and 225,000 and no shares of restricted stock were excluded from the calculation of diluted earnings per share, respectively, as their inclusion would be antidilutive. This is due to the fact that the exercise price of these options and the purchase price of these restricted shares is in excess of the average price of the Company's common stock of $3.38 and $3.03 per share for the three and six months ended June 30, 2003. For the three and six months ended of June 30, 2002, options to purchase 3,668,247 shares of common stock, warrants to purchase 918,468 shares of common stock, and 300,000 shares of restricted stock, were not included in the computation of diluted net loss per share since their inclusion would be antidilutive. D. Comprehensive Loss Other comprehensive loss includes unrealized gains or losses on the Company's available-for-sale investments (in thousands).

E. Notes Payable and Line of Credit In June 2002, the Company entered into a loan and security agreement (the "SVB Financing Agreement") with Silicon Valley Bank ("SVB"), under which the Company was able to borrow up to $4.0 million for the purchase of equipment. F-32 Amounts borrowed under the facility accrued interest at a rate equal to prime plus 0.25%, and were to have been repaid monthly over a 30-month period. The Company had utilized $2.7 million of this facility through borrowings that occurred in June 2002 and September 2002. The Company has recorded a note payable to SVB on its balance sheet totaling $2.2 million for the equipment financed as of December 31, 2002, of which $1.1 million is classified as a current liability. The SVB Financing Agreement also provided for a $1.0 million revolving line of credit at an interest rate equal to prime. The Company did not borrow any amounts under the revolving line of credit. The Company's ability to borrow additional amounts under the SVB Financing Agreement expired on May 30, 2003. In May 2003, the Company paid SVB $1.8 million in satisfaction of its outstanding borrowings under the loan facility. The amount paid represented the Company's outstanding principal and interest under the note at the time of the repayment. F. Payable Related to Acquisition In November 2000, the Company acquired Envenue, Inc. ("Envenue"), a wireless provider of advanced searching technologies designed to drive leads to traditional retailers. The total purchase price included consideration of $2.0 million in cash to be paid on or before May 24, 2002, which the Company classified as a payable related to acquisition within current liabilities. The Company did not pay the $2.0 million on or before May 24, 2002, as it was involved in a contractual dispute with the previous owners of Envenue. In June 2002, the Company placed $2.0 million into an escrow account, which was to be held until the resolution of this dispute. In October 2002, the Company paid $410,000 out of the escrowed funds, representing the undisputed portion of the purchase price plus interest from the original maturity date to the former stockholders of Envenue. The remaining $1.6 million of the purchase price was classified separately in the accompanying financial statements as of December 31, 2002. The Company recorded $1.6 million as restricted cash at December 31, 2002 related to the cash held in escrow. In June 2003, the Company paid the former owners of Envenue $1.7 million to settle all claims related to the acquisition of Envenue. As a result, the Company no longer has funds in escrow related to the matter. G. America Online, Inc. Amortization of AOL assets totaled $946,000 and $2.0 million in the three and six months ended June 30, 2002, respectively. There was no amortization of AOL assets in the three and six months ended June 30, 2003. Throughout the remaining initial term of the amended agreement, the Company will no longer record amortization of consideration given to AOL as these assets are now fully amortized and no further consideration is due AOL. Amortization of assets related to AOL has been reflected as a reduction of revenue in accordance with Emerging Issues Task Force ("EITF") 01-9. Net revenue recognized from AOL was $1.8 million, or 45.6% of net revenue, and $3.4 million, or 47.0% of net revenue, for the three and six months ended June 30, 2003, respectively. Net revenue recognized from AOL, including amortization of consideration given to AOL, was $424,000, or 20.5% of net revenue, and $1.3 million, or 27.0% of net revenue, for the three and six months ended June 30, 2002, respectively. Net amounts due from AOL included in accounts receivable at June 30, 2003 and December 31, 2002 were $1.1 million and $549,000, respectively. As of June 30, 2003, AOL beneficially owned 7.9% of the Company's outstanding common stock. H. Note Receivable for the Issuance of Restricted Common Stock In January 2002, the Company recorded a note receivable from its Chief Executive Officer, Mr. Greenlaw, who is also a member of its Board of Directors, for approximately $1.4 million arising from the financing of a purchase of 450,000 shares of its common stock as restricted stock by that individual. As of June 30, 2003, 225,000 of such shares were unvested and restricted from transfer. On each of January 4, 2004, 2005 and 2006, 75,000 of these restricted shares vest, respectively. The note bears interest at a rate of 4.875%, which was deemed to be fair market value at the time of the issuance of the note, compounding annually and is 100% recourse as to principal and interest. The note is payable upon the earlier of the occurrence of the sale of all or part of the shares by the issuer of the note, 90 days from the date Mr. Greenlaw ceases to be affiliated with the Company or January 4, 2008. At June 30, 2003, the Company has recorded $1.6 million in principal and interest as a note receivable classified within stockholders' equity. During the three and six months ended June 30, 2003, the Company recorded $19,000 and $37,000 in interest income resulting from this note receivable, respectively. During the three and six months ended June 30, 2002, the Company recorded $18,000 and $35,000 in interest income resulting from this note receivable, respectively. F-33 I. Related Parties ePresence provided the Company with telephone service and support under corporate services agreements during the three and six month periods ended June 30, 2003 and 2002. Under the current corporate services agreement, which expires on December 31, 2003, the Company pays ePresence an amount of $75,000 per year for these services. The Company recorded $19,000 and $38,000 in expense and paid ePresence $19,000 and $38,000 under the agreements in the three and six months ended June 30, 2003, respectively. The Company recorded $19,000 and $38,000 in expense and paid ePresence $94,000 and $94,000 under the agreements in the three and six months ended June 30, 2002, respectively. The Company had $6,000 and $6,000 accrued under the agreements as of June 30, 2003 and December 31, 2002, respectively. The Company leased the space it occupied in 2002 from ePresence under a sublease entered into in January 2001, which expired on December 31, 2002. The Company leases the space it currently occupies from ePresence under a sublease that expires on December 31, 2003. Under the current sublease agreement, the Company pays an annual rent of $227,000. Under the lease agreements, the Company recorded rent expense of $57,000 and $114,000 and paid ePresence $57,000 and $138,000 in the three and six months ended June 30, 2003, respectively. Under the lease agreements, the Company recorded rent expense and paid $129,000 and $259,000 to ePresence in the three and six months ended June 30, 2002, respectively. The Company had $19,000 and $43,000 accrued under the lease agreements as of June 30, 2003 and December 31, 2002, respectively. The Company believes that the amounts paid to ePresence under its services agreements and leases with ePresence are competitive with amounts the Company would have paid to outside third parties for the same or similar services and leased space. Certain directors of the Company hold positions as officers or directors of ePresence. The Chairman of the Board of Directors of the Company is also Chairman of the Board of Directors, President and Chief Executive Officer of ePresence. One director of the Company is Senior Vice President and Chief Financial Officer of ePresence. Another director of the Company is also a director of ePresence. In the three and six months ended June 30, 2003 and 2002, no compensation was paid to these directors by the Company for their services other than option grants under the Company's equity incentive plans in the six months ended June 30, 2002. J. Revision of Restructuring Estimate In the three months ended June 30, 2003, the Company recorded the reversal of $35,000 in excess restructuring reserves. The reversal resulted primarily from a change in estimate with respect to a compensation amount for a terminated employee that had been provided for as part of the Company's 2001 special charges. As of June 30, 2003, the Company had a remaining liability of $14,000 for the 2001 special charges related primarily to its remaining net lease obligations for a closed facility. K. Recently Issued Accounting Pronouncement In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity ("SFAS No. 150"). SFAS No. 150 affects the issuer's accounting for three types of freestanding financial instruments. SFAS No. 150 also requires disclosures about alternative ways of settling the instruments and the capital structure of entities, all of whose shares are mandatorily redeemable. This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities, for which it is effective for the first fiscal period beginning after December 31, 2003. It is to be implemented by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of the statement and still existing at the beginning of the interim period of adoption. Restatement is not permitted. The Company does not expect the adoption of SFAS No. 150 to have a material impact on its consolidated results of operations, financial position and cash flows. L. Subsequent Events In October 2003, Switchboard further amended its Directory Agreement with AOL. Among other things, the October 2003 amendment provides for an annual license fee of $4.8 million for the directory platform Switchboard provides to AOL, eliminating the sharing of revenue generated by from the sale of directory advertisements by AOL. The Directory Agreement was extended through December 2005. Under the new amendment, Switchboard and AOL will be able to sell advertising products offering local merchant and national advertisers the F-34 combined consumer audience of both the AOL and Switchboard yellow pages. Switchboard and AOL will share in resulting revenue associated with the sale of the combined products. As part of the consideration for the $4.8 million annual fee, if requested by AOL, Switchboard will provide 3,000 hours of engineering services during each fiscal quarter to AOL. Of the 3,000 hours Switchboard will provide to AOL each fiscal quarter, AOL has the right to carry forward up to 1,000 unused hours into the following fiscal quarter. Revenue attributable to any unused hours that are carried forward into the following fiscal quarter will be valued using Switchboard's standard hourly rates for engineering services and will be deferred until the hours carried forward are either used or the right to use them expires. Switchboard will bill AOL on a time and materials basis for any hours for engineering services in excess of the 3,000 hours, and will recognize this revenue during the period in which the engineering services are provided. Subsequent to June 30, 2003, Mr. Greenlaw's employment with the Company terminated and the Company exercised its right to repurchase 225,000 unvested shares held by Greenlaw for $724,500. Accordingly, the corresponding loan from Mr. Greenlaw with respect to those shares was reduced. On October 21, 2003, Mr. Greenlaw repaid $300,000 of the loan balance. This payment was applied first to accrued interest, and the remaining amount was applied to outstanding principal. F-35 PROSPECTUS ____________, _____ [SWITCHBOARD/LOGO APPEARS HERE] 8,815,171 Shares Common Stock Thomas Weisel Partners LLC SG Cowen -------------------------------------------------------------------------------- Neither we nor any of the underwriters have authorized anyone to provide information different from that contained in this prospectus. When you make a decision about whether to invest in our common stock, you should not rely upon any information other than the information in this prospectus or incorporated by reference in this prospectus. Neither the delivery of this prospectus nor the sale of our common stock means that information contained in this prospectus is correct after the date of this prospectus. This prospectus is not an offer to sell or solicitation of an offer to buy these shares of common stock in any circumstances under which the offer of the solicitation is unlawful. PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 13. Other Expenses of Issuance and Distribution. The following table sets forth the costs and expenses payable by the registrant in connection with the sale of common stock being registered. The selling stockholders will not pay any portion of these expenses. All amounts are estimates except the Securities and Exchange Commission registration fee. SEC Registration Fee $ 6,232.89 NASD Filing Fee 9,000.00 Legal Fees and Expenses 350,000.00 Accounting Fees and Expenses 125,000.00 Transfer Agent and Registrar Fees 10,000.00 Printing Fees 100,000.00 Miscellaneous Expenses 57,967.11 ----------- Total $658,200.00 ===========

Item 14. Indemnification of Directors and Officers. Articles VII and VIII of our Restated Certificate of Incorporation provide for indemnification of our directors to the fullest extent permitted by law. The provisions eliminate a director's liability for monetary damages for a breach of fiduciary duty as a director, except in certain circumstances involving wrongful acts, such as the breach of a director's duty of loyalty or acts or omissions that involve intentional misconduct or a knowing violation of law. In addition, the Restated Certificate of Incorporation provides for indemnification against expenses incurred by a director, officer or other person entitled to indemnification to be paid by us from time to time in advance of the final disposition of such action, suit or proceeding if that individual acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interest of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Section 145 of the Delaware General Corporations Law contains provisions regarding indemnification, among others, of officers and directors. Section 145 of the Delaware General Corporations Law provides in relevant part: (a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. (b) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. (d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders. Delaware law also permits a corporation to purchase and maintain insurance on behalf of any person who is or was a director or officer against any liability asserted against him and incurred by him in such capacity or arising out of his status as such, whether or not the corporation has the power to indemnify him against that liability under Section 145 of the Delaware General Corporations Law. We also have provided liability insurance for each director and officer for losses arising from claims or charges made against them while acting in their capacities as our directors or officers. The above discussion of our corporate documents is not intended to be exhaustive and is respectively qualified in its entirety by our corporate documents. ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES. Since October 20, 2000, we have sold and issued the following unregistered securities: We issued 386,302 shares of our common stock to CBS, Inc. at a price of $1 per share, pursuant to a warrant exercise by CBS, Inc. We also issued 746,260 shares of common stock to America Online, Inc. in connection with provisions of the Directory and Local Advertising Platform and Services Agreement between Switchboard and America Online, Inc., as amended to date. The issuances of the above securities were deemed to be exempt from registration under the Securities Act in reliance on: * Rule 701 promulgated under the Securities Act; or * Section 4(2) of such Securities Act as transactions by an issuer not involving any public offering. The recipients of securities in each such transaction represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the share certificates issued in such transactions. All recipients had adequate access, through their relationships with us, to information about us. Item 16(a). Financial Statements. The following documents are filed as part of or are included in this prospectus: Years Ended December 31, 2002, 2001 and 2000 -------------------------------------------- Report of Ernst & Young LLP, Independent Auditors Report of PricewaterhouseCoopers LLP, Independent Accountants Consolidated Balance Sheets as of December 31, 2002 and 2001 Consolidated Statements of Operations for each of the years in the three-year period ended December 31, 2002, 2001 and 2000 Consolidated Statements of Stockholders Equity for each of the years in the three-year period ended December 31, 2002, 2001 and 2000 Consolidated Statements of cash Flows for each of the years in the three-year period ended December 31, 2002, 2001 and 2000 Notes to Consolidated Financial Statements Six Months Ended June 30, 2003 and 2002 --------------------------------------- Consolidated Balance Sheet as of June 30, 2003 (Unaudited) Consolidated Statements of Operations for the six months ended June 30, 2003 and 2002 (Unaudited) Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002 (Unaudited) Notes to Unaudited Consolidated Financial Statements Report of Ernst & Young The exhibits listed in the Exhibit Index are filed herewith or incorporated by reference herein: NUMBER DESCRIPTION ------ ----------- 1.1* Underwriting Agreement 3.1(1) Restated Certificate of Incorporation 3.2(2) Amended and Restated By-Laws 4.1(2) Specimen Stock Certificate for shares of Common Stock, par value $.01 per share 4.2(3) Registration Rights Agreement, by and between the Company and America Online, dated as of December 11, 2000 4.3(4) Registration Rights Agreement, by and between the Company and Banyan Worldwide, dated as of March 7, 2000 4.4(2) 1996 Stock Incentive Plan, as amended, including forms of stock option agreement for incentive and nonstatutory stock options. 4.5(1) 1999 Stock Incentive Plan, as amended, including forms of stock option agreement for incentive and nonstatutory stock options 4.6(2) 1999 Employee Stock Purchase Plan 4.7(5) 2000 Nonstatutory Stock Option Plan 4.8(2) Amended and Restated Registration Rights Agreement by and between Switchboard Incorporated and Banyan Worldwide, dated May 3, 1999. 4.9(2) Amended and Restated Registration Rights Agreement, as amended, by and among Switchboard Incorporated, America Online, Inc., Digital City Inc. and Banyan Worldwide, dated February 20, 1998. 5.1* Opinion of Weil, Gotshal & Manges LLP 10.1(2) Employment Agreement between Switchboard Incorporated and Douglas J. Greenlaw, dated October 8, 1999. 10.2(2) Employment Agreement between Switchboard Incorporated and Dean Polnerow, dated December 1, 1999. 10.3(2) Employment Agreement between Switchboard Incorporated and James M. Canon, dated December 31, 1999. 10.4(2) Non-Statutory Stock Option Agreement Granted Under 1999 Stock Incentive Plan between Switchboard Incorporated and Douglas J. Greenlaw, dated October 13, 1999. 10.5(2) Non-statutory Stock Option Agreement between Switchboard Incorporated and Douglas J. Greenlaw, dated October 13, 1999. 10.6(2) Incentive Stock Option Agreement between Switchboard Incorporated and Dean Polnerow, dated October 13, 1999. 10.7(2) Incentive Stock Option Agreement between Switchboard Incorporated and James M. Canon, dated October 13, 1999. 10.8(2) Non-Statutory Stock Option Agreement between Switchboard Incorporated and William P. Ferry, dated September 14, 1999. 10.9(2) Non-Statutory Stock Option Agreement between Switchboard Incorporated and William P. Ferry, dated October 18, 1999. 10.10(2) Non-Statutory Stock Option Agreement between Switchboard Incorporated and Richard M. Spaulding, dated September 14, 1999. 10.11(2) Non-Statutory Stock Option Agreement between Switchboard Incorporated and David N. Strohm, dated September 14, 1999. 10.12(2) Non-Statutory Stock Option Agreement between Switchboard Incorporated and Robert M. Wadsworth, dated September 14, 1999. 10.13(3) Incentive Stock Option Agreement between Switchboard Incorporated and Kevin Lawler, dated May 24, 2000. 10.14(6) Stock Purchase Agreement dated as of November 24, 2000, among Switchboard Incorporated, Envenue, Inc. and the Stockholders of Envenue, Inc. 10.15(3) Employment Agreement between Switchboard Incorporated and Kevin P. Lawler, dated May 9, 2000. 10.16(7) Employment Agreement between Robert Orlando and Switchboard Incorporated, dated September 20, 2001. 10.17(8) Restricted Stock Agreement Granted Under 1999 Stock Incentive Plan between Douglas J. Greenlaw and Switchboard Incorporated dated January 4, 2002. 10.18(8) Secured promissory note between Douglas J. Greenlaw and Switchboard Incorporated dated January 4, 2002. 10.19(8) Collateral Assignment and Pledge Agreement between Douglas J. Greenlaw and Switchboard Incorporated dated January 4, 2002. 10.20(8) Consent to the cancellation of options granted on October 13, 1999 by Douglas J. Greenlaw on January 4, 2002. 10.21(8) Agreement of Amendment, Severance, and Mutual Release between John Jewett and Switchboard Incorporated dated February 26, 2002. 10.23(3)+ Directory and Local Advertising Platform Services Agreement dated as of December 11, 2000 between Switchboard Incorporated and America Online, Inc. 10.24(3) Common Stock and Warrant Purchase Agreement dated as of December 11, 2000 between Switchboard Incorporated and America Online, Inc. 10.25(3) Form of Common Stock Purchase Warrant which may be issued to America Online, Inc. pursuant to the Common Stock and Warrant Agreement dated as of December 11, 2000 between Switchboard Incorporated and America Online, Inc. 10.26(8) First Amendment dated November 16, 2001 to the Directory and Local Advertising Platform Services Agreement between Switchboard Incorporated and America Online, Inc. dated December 11, 2000. 10.27(8)+ Second Amendment dated April 25, 2002 to the Directory and Local Advertising Platform Services Agreement between Switchboard Incorporated and America Online, Inc. dated December 11, 2000. 10.28(9)++ Third Amendment dated August 21, 2002 to Directory and Local Advertising Platform Services Agreement between America Online, Inc. and Switchboard Incorporated dated December 11, 2000. 10.29(2) Financial Reporting Agreement among Switchboard Incorporated, Banyan Worldwide and CBS Corporation, dated as of January 28, 2000. 10.30(8) Termination Agreement between MediaMap, Inc. and Switchboard Incorporated dated January 30, 2002. 10.31(8) Services Agreement dated March 7, 2002 between Switchboard Incorporated and ePresence Inc. 10.32(5) Sublease between ePresence, Inc. and Switchboard Incorporated, dated as of January 1, 2003. 10.33(5) Services Agreement dated March 1, 2003 between Switchboard Incorporated and ePresence, Inc. 10.34(5) Master Services Agreement between Cable & Wireless Internet Services Inc. and Switchboard Incorporated dated May 13, 2002. 10.35(5)++ Order Form between Cable & Wireless Internet Services Inc. and Switchboard Incorporated dated May 22, 2002. 10.36(9) Loan and Security Agreement between Silicon Valley Bank and Switchboard Incorporated dated May 31, 2002. 10.37(5)++ Data Products License Agreement by and between Switchboard Incorporated and Acxiom Corporation, dated December 15, 2002. 10.38(5)++ General Provisions Agreement by and between Switchboard Incorporated and TeleAtlas North America, Inc., dated February 19, 2003. 10.39(5)++ Internet Provider License by and between Switchboard Incorporated and TeleAtlas North America, Inc., dated February 21, 2003. 10.40(10) Amended and Restated Directory and Local Advertising Platform Services Agreement by and between Switchboard Incorporated and America Online, Inc., dated October 15, 2003 21.1** Subsidiaries of Switchboard Incorporated 23.1** Consent of Ernst & Young LLP, Independent Auditors 23.2* Consent of Weil, Gotshal & Manges LLP 23.3** Consent of PricewaterhouseCoopers LLP, Independent Auditors 24.1** Power of Attorney, Reference is made to page II-5 (1) Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 000-78871) filed with the Securities and Exchange Commission on March 29, 2002, as amended. (2) Incorporated by reference to the Registration Statement on Form S-1 (File No. 333-90013) as declared effective by the Securities and Exchange Commission on March 1, 2000. (3) Incorporated by reference to the Registrant's Annual Report on Form 10- K (File No. 000-28871) filed with the Securities and Exchange Commission on April 2, 2001. (4) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 000-28871) filed with the Securities and Exchange Commission on May 15, 2000. (5) Incorporated by reference to the Registrant's Annual Report on Form 10- K (File No. 000-28871) filed with the Securities and Exchange Commission on March 28, 2003. (6) Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 000-28871) filed with the Securities and Exchange Commission on February 7, 2001. (7) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 000-28871) filed with the Securities and Exchange Commission on November 14, 2001. (8) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 000-78871) filed with the Securities and Exchange Commission on May 9, 2002. (9) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 000-78871) filed with the Securities and Exchange Commission on September 20, 2002. (10) Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 000-28871) filed with the Securities and Exchange Commission on October 16, 2003. + Confidential treatment granted as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Request. ++ Confidential treatment requested as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Request. * To be filed by amendment to this prospectus. ** Filed herewith. (b) Financial Statement Schedule. NUMBER DESCRIPTION ------ ----------- 99.1* Valuation and Qualifying Accounts * To be filed by amendment to this prospectus. Item 17. Undertakings. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (a) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (b) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (c) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to that information in the registration statement; provided, however, that clauses (a) and (b) do not apply if the information required to be included in a post-effective amendment by such clauses is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Sections 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Boston, Commonwealth of Massachusetts, on this 23rd day of October, 2003. SWITCHBOARD INCORPORATED By:/s/Dean Polnerow ---------------- Dean Polnerow President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Dean Polnerow, as such person's true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in such person's name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this prospectus, and to file same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated;

INDEX TO EXHIBITS NUMBER DESCRIPTION ------ ----------- 1.1* Underwriting Agreement 3.1(1) Restated Certificate of Incorporation 3.2(2) Amended and Restated By-Laws 4.1(2) Specimen Stock Certificate for shares of Common Stock, par value $.01 per share 4.2(3) Registration Rights Agreement, by and between the Company and America Online, dated as of December 11, 2000 4.3(4) Registration Rights Agreement, by and between the Company and Banyan Worldwide, dated as of March 7, 2000 4.4(2) 1996 Stock Incentive Plan, as amended, including forms of stock option agreement for incentive and nonstatutory stock options. 4.5(1) 1999 Stock Incentive Plan, as amended, including forms of stock option agreement for incentive and nonstatutory stock options 4.6(2) 1999 Employee Stock Purchase Plan 4.7(5) 2000 Nonstatutory Stock Option Plan 4.8(2) Amended and Restated Registration Rights Agreement by and between Switchboard Incorporated and Banyan Worldwide, dated May 3, 1999. 4.9(2) Amended and Restated Registration Rights Agreement, as amended, by and among Switchboard Incorporated, America Online, Inc., Digital City Inc. and Banyan Worldwide, dated February 20, 1998. 5.1* Opinion of Weil, Gotshal & Manges LLP 10.1(2) Employment Agreement between Switchboard Incorporated and Douglas J. Greenlaw, dated October 8, 1999. 10.2(2) Employment Agreement between Switchboard Incorporated and Dean Polnerow, dated December 1, 1999. 10.3(2) Employment Agreement between Switchboard Incorporated and James M. Canon, dated December 31, 1999. 10.4(2) Non-Statutory Stock Option Agreement Granted Under 1999 Stock Incentive Plan between Switchboard Incorporated and Douglas J. Greenlaw, dated October 13, 1999. 10.5(2) Non-statutory Stock Option Agreement between Switchboard Incorporated and Douglas J. Greenlaw, dated October 13, 1999. 10.6(2) Incentive Stock Option Agreement between Switchboard Incorporated and Dean Polnerow, dated October 13, 1999. 10.7(2) Incentive Stock Option Agreement between Switchboard Incorporated and James M. Canon, dated October 13, 1999. 10.8(2) Non-Statutory Stock Option Agreement between Switchboard Incorporated and William P. Ferry, dated September 14, 1999. 10.9(2) Non-Statutory Stock Option Agreement between Switchboard Incorporated and William P. Ferry, dated October 18, 1999. 10.10(2) Non-Statutory Stock Option Agreement between Switchboard Incorporated and Richard M. Spaulding, dated September 14, 1999. 10.11(2) Non-Statutory Stock Option Agreement between Switchboard Incorporated and David N. Strohm, dated September 14, 1999. 10.12(2) Non-Statutory Stock Option Agreement between Switchboard Incorporated and Robert M. Wadsworth, dated September 14, 1999. 10.13(3) Incentive Stock Option Agreement between Switchboard Incorporated and Kevin Lawler, dated May 24, 2000. 10.14(6) Stock Purchase Agreement dated as of November 24, 2000, among Switchboard Incorporated, Envenue, Inc. and the Stockholders of Envenue, Inc. 10.15(3) Employment Agreement between Switchboard Incorporated and Kevin P. Lawler, dated May 9, 2000. 10.16(7) Employment Agreement between Robert Orlando and Switchboard Incorporated, dated September 20, 2001. 10.17(8) Restricted Stock Agreement Granted Under 1999 Stock Incentive Plan between Douglas J. Greenlaw and Switchboard Incorporated dated January 4, 2002. 10.18(8) Secured promissory note between Douglas J. Greenlaw and Switchboard Incorporated dated January 4, 2002. 10.19(8) Collateral Assignment and Pledge Agreement between Douglas J. Greenlaw and Switchboard Incorporated dated January 4, 2002. 10.20(8) Consent to the cancellation of options granted on October 13, 1999 by Douglas J. Greenlaw on January 4, 2002. 10.21(8) Agreement of Amendment, Severance, and Mutual Release between John Jewett and Switchboard Incorporated dated February 26, 2002. 10.23(3)+ Directory and Local Advertising Platform Services Agreement dated as of December 11, 2000 between Switchboard Incorporated and America Online, Inc. 10.24(3) Common Stock and Warrant Purchase Agreement dated as of December 11, 2000 between Switchboard Incorporated and America Online, Inc. 10.25(3) Form of Common Stock Purchase Warrant which may be issued to America Online, Inc. pursuant to the Common Stock and Warrant Agreement dated as of December 11, 2000 between Switchboard Incorporated and America Online, Inc. 10.26(8) First Amendment dated November 16, 2001 to the Directory and Local Advertising Platform Services Agreement between Switchboard Incorporated and America Online, Inc. dated December 11, 2000. 10.27(8)+ Second Amendment dated April 25, 2002 to the Directory and Local Advertising Platform Services Agreement between Switchboard Incorporated and America Online, Inc. dated December 11, 2000. 10.28(9)++ Third Amendment dated August 21, 2002 to Directory and Local Advertising Platform Services Agreement between America Online, Inc. and Switchboard Incorporated dated December 11, 2000. 10.29(2) Financial Reporting Agreement among Switchboard Incorporated, Banyan Worldwide and CBS Corporation, dated as of January 28, 2000. 10.30(8) Termination Agreement between MediaMap, Inc. and Switchboard Incorporated dated January 30, 2002. 10.31(8) Services Agreement dated March 7, 2002 between Switchboard Incorporated and ePresence Inc. 10.32(5) Sublease between ePresence, Inc. and Switchboard Incorporated, dated as of January 1, 2003. 10.33(5) Services Agreement dated March 1, 2003 between Switchboard Incorporated and ePresence, Inc. 10.34(5) Master Services Agreement between Cable & Wireless Internet Services Inc. and Switchboard Incorporated dated May 13, 2002. 10.35(5)++ Order Form between Cable & Wireless Internet Services Inc. and Switchboard Incorporated dated May 22, 2002. 10.36(9) Loan and Security Agreement between Silicon Valley Bank and Switchboard Incorporated dated May 31, 2002. 10.37(5)++ Data Products License Agreement by and between Switchboard Incorporated and Acxiom Corporation, dated December 15, 2002. 10.38(5)++ General Provisions Agreement by and between Switchboard Incorporated and TeleAtlas North America, Inc., dated February 19, 2003. 10.39(5)++ Internet Provider License by and between Switchboard Incorporated and TeleAtlas North America, Inc., dated February 21, 2003. 10.40(10) Amended and Restated Directory and Local Advertising Platform Services Agreement by and between Switchboard Incorporated and America Online, Inc., dated October 15, 2003 21.1** Subsidiaries of Switchboard Incorporated 23.1** Consent of Ernst & Young LLP, Independent Auditors 23.2* Consent of Weil, Gotshal & Manges LLP 23.3** Consent of PricewaterhouseCoopers LLP, Independent Auditors 24.1** Power of Attorney, Reference is made to page II-5 (1) Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 000-78871) filed with the Securities and Exchange Commission on March 29, 2002, as amended. (2) Incorporated by reference to the Registration Statement on Form S-1 (File No. 333-90013) as declared effective by the Securities and Exchange Commission on March 1, 2000. (3) Incorporated by reference to the Registrant's Annual Report on Form 10- K (File No. 000-28871) filed with the Securities and Exchange Commission on April 2, 2001. (4) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 000-28871) filed with the Securities and Exchange Commission on May 15, 2000. (5) Incorporated by reference to the Registrant's Annual Report on Form 10- K (File No. 000-28871) filed with the Securities and Exchange Commission on March 28, 2003. (6) Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 000-28871) filed with the Securities and Exchange Commission on February 7, 2001. (7) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 000-28871) filed with the Securities and Exchange Commission on November 14, 2001. (8) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 000-78871) filed with the Securities and Exchange Commission on May 9, 2002. (9) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 000-78871) filed with the Securities and Exchange Commission on September 20, 2002. (10) Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 000-28871) filed with the Securities and Exchange Commission on October 16, 2003. + Confidential treatment granted as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Request. ++ Confidential treatment requested as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Request. * To be filed by amendment to this prospectus. ** Filed herewith.

SWITCHBOARD INC S-1