SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

	FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002 OR

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

	FOR THE TRANSITION PERIOD FROM TO

	COMMISSION FILE NUMBER: 0-26303

VIANT CORPORATION
(Exact Name of Registrant as Specified in Its Charter)

DELAWARE		77-0427302
(State or Other Jurisdiction Incorporation or Organization)		(I.R.S. Employer Identification No.)

89 SOUTH STREET, BOSTON, MA		02111
(Address of Principal Executive Offices)		(Zip Code)

617-531-3700
(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o.

As of August 8, 2002 there were 49,185,708 shares of Common Stock, $.001 par value, outstanding.

VIANT CORPORATION

Form 10-Q

Table of Contents

June 30, 2002

PART I.	FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements

	Consolidated Statement of Operations for the Three and Six Months Ended June 30, 2002 and 2001

	Consolidated Balance Sheet as of June 30, 2002 and December 31, 2001

	Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2002 and 2001

	Notes to Consolidated Financial Statements

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

Item 3.	Quantitative and Qualitative Disclosures About Market Risk

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings

Item 2.	Changes in Securities and Use of Proceeds

Item 6.	Exhibits and Report on Form 8-K

Signatures

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

VIANT CORPORATION

CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	Three Months Ended						Six Months Ended
	June 30, 2002			June 30, 2001			June 30, 2002			June 30, 2001

Revenues:
Revenues before expense reimbursements	$	5,339		$	9,515		$	10,291		$	23,801
Reimbursements for expenses	424			636			826			1,444
Total revenues	5,763			10,151			11,117			25,245

Operating expenses:
Cost of professional services
Cost of professional services before reimbursable expenses	3,965			8,760			8,348			22,036
Reimbursable expenses	424			636			826			1,444
Total cost of professional services	4,389			9,396			9,174			23,480
Sales and marketing	1,152			2,552			2,578			5,496
General and administrative	5,432			9,520			11,197			21,668
Restructuring	3,184			—			3,184			16,747

Total operating expenses	14,157			21,468			26,133			67,391

Loss from operations	(8,394		)	(11,317		)	(15,016		)	(42,146		)
Interest and other income (expense), net	514			1,329			1,161			2,679

Net loss	$	(7,880	)	$	(9,988	)	$	(13,855	)	$	(39,467	)

Net loss per share:

Basic	$	(0.16	)	$	(0.20	)	$	(0.28	)	$	(0.79	)
Diluted	$	(0.16	)	$	(0.20	)	$	(0.28	)	$	(0.79	)

Shares used in computing net loss per share:

Basic	49,152			50,316			49,071			50,185
Diluted	49,152			50,316			49,071			50,185

The accompanying notes are an integral part of these consolidated financial statements.

VIANT CORPORATION

CONSOLIDATED BALANCE SHEET

(IN THOUSANDS, EXCEPT SHARE DATA)

(UNAUDITED)

	June 30, 2002			December 31, 2001
ASSETS
Current assets:
Cash and cash equivalents	$	87,919		$	43,601
Short-term investments	23,424			94,158
Accounts receivable, net	4,052			2,667
Prepaid expenses and other current assets	450			1,356
Total current assets	115,845			141,782
Property and equipment, net	5,809			8,226
Long-term investments	314			314
Other assets	3,778			3,778
Total assets	$	125,746		$	154,100

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of capital lease obligations	$	348		$	741
Accounts payable	1,274			1,673
Accrued expenses	3,532			5,830
Restructuring reserve	5,261			17,885
Deferred revenues	560			665
Total current liabilities	10,975			26,794
Capital lease obligations, net of current portion	17			114
Restructuring reserve, net of current portion	4,097			2,937
Total liabilities	15,089			29,845

Stockholders’ equity:
Preferred stock, $0.001 par value; Authorized: 5,000,000 shares; Issued and outstanding: no shares at June 30, 2002 and December 31, 2001	—			—
Common stock, $0.001 par value; Authorized 200,000,000 shares; Issued and outstanding: 51,897,048 and 49,183,048 at June 30, 2002 and 51,591,468 and 48,877,468 shares at December 31, 2001, respectively	52			52
Additional paid-in capital	217,596			217,239
Treasury stock, at cost, 2,714,000 shares at June 30, 2002 and December 31,2001	(7,188		)	(7,188		)
Accumulated other comprehensive income	—			100
Accumulated deficit	(99,803		)	(85,948		)
Total stockholders’ equity	110,657			124,255
Total liabilities and stockholders’ equity	$	125,746		$	154,100

The accompanying notes are an integral part of these consolidated financial statements.

VIANT CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

	Six Months Ended
	June 30, 2002			June 30, 2001

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(13,855	)	$	(39,467	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	2,089			3,036
Loss on disposal of property and equipment in restructuring	299			1,237
Write-down of investments	—			1,471
Stock-based compensation expense	—			42
Changes in operating assets and liabilities:
Accounts receivable	(1,385		)	11,905
Prepaid expenses and other assets	906			(111		)
Accounts payable	(399		)	(3,478		)
Accrued expenses	(2,298		)	(8,382		)
Restructuring reserve	(11,464		)	10,680
Deferred revenues	(105		)	(3,330		)

Net cash used in operating activities	(26,212		)	(26,397		)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments	(3,400		)	(60,725		)
Maturities of short-term investments	74,134			35,969
Purchases of long-term investments	—			(971		)
Proceeds from sale of property and equipment	76			90
Purchases of property and equipment	(47		)	(2,503		)

Net cash provided by (used in) investing activities	70,763			(28,140		)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	357			511
Principal payments on capital lease obligations	(490		)	(330		)

Net cash provided by (used in) financing activities	(133		)	181

Effect of exchange rate changes on cash and cash equivalents	(100		)	203

Net increase (decrease) in cash and cash equivalents	44,318			(54,153		)
Cash and cash equivalents at beginning of period	43,601			141,629
Cash and cash equivalents at end of period	$	87,919		$	87,476

SUPPLEMENTAL CASH FLOW DISCLOSURE:
Cash paid for interest	$	47		$	77

The accompanying notes are an integral part of these consolidated financial statements.

VIANT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared by Viant Corporation (“Viant”, “We” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2001 included in the Company’s Form 10-K, filed April 1, 2002 (File No. 0-26303), and as amended on Form 10-K/A on April 30, 2002. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting solely of normal, recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of results for the interim periods presented. The results of operations for the three and six month periods ended June 30, 2002 are not necessarily indicative of the results to be expected for any future period or the full fiscal year.

On January 1, 2002, Viant adopted EITF Issue No. 01-14, “Income Statement Characterization of Reimbursements Received for “Out-Of-Pocket” Expenses Incurred.” This consensus requires that reimbursements received for out-of-pocket expenses should be characterized as revenue and the corresponding amount as cost of services. We incur incidental expenses in the delivery of services to our clients that in practice are commonly referred to as “out-of-pocket” expenses. These expenses include, but are not limited to, travel and administrative charges. Historically, we have reported our revenues and cost of services net of these reimbursements. Comparative financial statements for prior periods have been reclassified to comply with this new FASB guidance.

2. EARNINGS (LOSS) PER SHARE

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted income (loss) per common share reflects the maximum dilution that would have resulted from the assumed exercise and share repurchase related to dilutive stock options and is computed by dividing net income (loss) by the weighted average number of common shares and all dilutive securities outstanding. The calculation of diluted net loss per common share does not include 0.2 and 0.1 million potential shares of common stock equivalents for the three and six months ended June 30, 2002, respectively, and 0.4 and 0.8 million shares for the three and six months ended June 30, 2001, respectively, as their inclusion would be anti-dilutive.

3. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Viant considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. All other investments with original maturities between 91 and 360 days are classified as short-term investments because they are liquid and are available to meet working capital needs. Short-term investments are classified as held-to-maturity securities and are recorded at amortized cost. Investments with original maturities greater than one year are classified as long-term investments. At June 30, 2002 and December 31, 2001, Viant’s short-term investments consisted primarily of certificates of deposit, U.S. Government-backed securities and money market funds secured by U.S. Government-backed securities. At June 30, 2002, cash and cash equivalents included $2.0 million, which collateralizes outstanding letters of credit.

4. SEGMENTS AND GEOGRAPHIC INFORMATION

Viant engages in business activities in one operating segment that provides professional services to global companies that seek to solve complex business problems with digital solutions. Revenues from and long-lived assets at Viant’s international operations in Munich, whose operations ceased as a result of the restructuring undertaken in March 2001, and London, whose operations ceased as a result of the restructuring undertaken in October 2001, are not significant for the periods reported.

5. RESTRUCTURING

In December 2000, Viant recorded restructuring and other related charges of $6.0 million, consisting of $1.7 million for headcount reductions, $4.0 million for closure and consolidation of facilities and related fixed assets, and $0.3 million of other related restructuring charges. These restructuring and other related charges were taken to align Viant’s cost structure with changing market conditions and decreased demand for Viant’s services. The plan resulted in headcount reduction of 125 employees, which was made up of 99 professional services staff and 26 enterprise services staff.

On March 27, 2001, Viant announced that it was undertaking additional cost cutting measures to address the increasingly challenging demand environment. Viant recorded additional restructuring costs of $16.7 million, consisting of $4.1 million for headcount reductions, $11.6 million for consolidation of facilities and related fixed assets, $6.5 million of which was an update to the fourth quarter 2000 estimated restructuring reserve, and $1.0 million of other restructuring related charges. The change in estimate for facilities was the result of the significant softening in the overall commercial real estate market. The $11.6 million for facilities costs represents future minimum facility lease payments net of amounts estimated to be received for subleases. This plan resulted in headcount reduction of 211 employees, which was made up of 152 professional services staff and 59 enterprise services staff. The reduction in force was primarily the result of the closure of the Houston, San Francisco and Munich offices.

On October 12, 2001 Viant announced it would undertake further cost cutting measures. Viant recorded additional restructuring costs of $14.3 million during the fourth quarter 2001, consisting of $1.2 million for headcount reductions, $12.3 million for consolidation of facilities and related fixed assets, $8.6 million of which was an update to previous quarter restructuring estimates, and $0.8 million of other restructuring related charges. The change in estimate for facilities was the result of the continued significant softening in the overall commercial real estate market. The $12.3 million for facilities costs represents future minimum facility lease payments net of amounts estimated to be received for subleases. This plan resulted in the headcount reduction of 116 employees, which was made up of 82 professional services staff and 34 enterprise services staff. As a result of the restructuring, Viant closed its Atlanta, Chicago and London offices.

During the quarter ended June 30, 2002, Viant recorded additional restructuring costs consisting of $3.2 million for continued consolidation of facilities. This change in estimate for facilities represents an update to the first quarter 2002 restructure reserve and represents future minimum facility lease payments net of amounts to be received under a current sublease agreement and future subleases. This change in estimate is a result of a current subleasee’s inability to continue making payments under an existing sublease agreement and the continued softening of the overall commercial real estate market.

As of June 30, 2002, $9.4 million, primarily related to real estate lease obligations, remained accrued for restructuring. Of this amount, a $5.3 million cash outlay is expected over the next 12 months, and the remaining cash outlay of approximately $4.1 million is expected to occur over the next 6 years.

Restructuring reserve activities during the six months ended June 30, 2002 were as follows (in thousands):

	Balance							Balance
	December 31, 2001		Expense		Utilization			June 30, 2002

Severance and benefits	$	119	$	—	$	(119	)	$	—
Facilities	20,567		3,184		(14,490		)	9,261
Other	136		—		(39		)	97
Total	$	20,822	$	3,184	$	(14,648	)	$	9,358

6. COMPREHENSIVE LOSS

Total comprehensive loss, which was comprised of net loss and foreign currency translation adjustments, was $(7,960,000) and $(9,897,000) for the three months ended June 30, 2002 and 2001, respectively, and $(13,955,000) and $(39,264,000) for the six months ended June 30, 2002 and 2001, respectively.

7. SUBSEQUENT EVENT

On April 5, 2002, Viant Corporation entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), with divine, inc. and DVC Acquisition Company, pursuant to which DVC, a direct, wholly owned subsidiary of divine, will be merged with and into Viant and the separate corporate existence of DVC shall cease. The Merger Agreement was subsequently amended on July 23, 2002 and August 2, 2002 to provide for revised terms of the pending transaction. As divine will not assume or substitute any of the outstanding Viant stock options, all of the outstanding Viant stock options will accelerate and become fully exercisable for a 15-day period. At the end of the 15-day period, Viant’s 1996 Stock Option Plan, 1999 Stock Option Plan and all outstanding, unexercised options under those plans will terminate.

Upon consummation of the merger, each of the approximately 49.75 million outstanding shares of Viant common stock, which number assumes the acceleration and net exercise of outstanding Viant stock options, will be converted into the right to receive that fraction of a share of divine Class A common stock equal to $8,600,000 divided by the average trading price of divine Class A common stock, but in no event will divine issue more than 19.99% of its outstanding common stock in the transaction. The average trading price for the divine Class A common stock will be equal to the volume weighted average price for the 10-day trading period ending 2 days prior to the closing of the merger, but the per share average trading price for this calculation will not be less than $2.0325 or greater than $2.9675.

In connection with the closing of the merger, Viant will distribute at least $72.5 million, in the aggregate, to its stockholders; provided, however, that if the proposed business combination does not close, the cash distribution will not occur. The record date for the cash distribution has not yet been set. In the event that divine would be required to issue more than 19.99% of its outstanding shares of common stock on the closing date of the merger, the remaining portion of the $8,600,000 would be added to Viant’s $72.5 million cash distribution.

Following the merger, Viant will be a wholly owned subsidiary of divine.

8. NEW ACCOUNTING PRONOUNCEMENTS

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS 146”). This statement 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)” (“EITF 94-3”). SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. EITF 94-3 allowed for an exit cost liability to be recognized at the date of an entity’s commitment to an exit plan. SFAS 146 also requires that liabilities recorded in connection with exit plans be initially measured at fair value. The provisions of SFAS 146 are effective for exit or disposal activities that are initiated after December 31, 2002, with early adoption encouraged. This standard will impact any future restructurings approved by Viant on or after January 1, 2003.

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

THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF VIANT SHOULD BE READ IN CONJUNCTION WITH VIANT’S UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, INCLUDED ELSEWHERE IN THIS REPORT AND WITH THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2001, AS AMENDED ON FORM 10-K/A. EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE DISCUSSION IN THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE EXCHANGE ACT OF 1934. THESE STATEMENTS INVOLVE RISKS, UNCERTAINTIES AND ASSUMPTIONS AS TO SUCH MATTERS AS VIANT’S PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS. THE CAUTIONARY STATEMENTS MADE IN THIS REPORT SHOULD BE READ AS BEING APPLICABLE TO ALL RELATED FORWARD-LOOKING STATEMENTS WHEREVER THEY APPEAR IN THIS REPORT. VIANT’S ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE, ACHIEVEMENTS AND REPORTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED BELOW. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE THOSE DISCUSSED IN “FACTORS AFFECTING VIANT’S OPERATING RESULTS, BUSINESS PROSPECTS AND MARKET PRICE OF STOCK,” AS WELL AS THOSE DISCUSSED ELSEWHERE HEREIN. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS DOCUMENT ARE MADE AS OF THE DATE HEREOF, BASED ON INFORMATION AVAILABLE TO THE COMPANY ON THE DATE THEREOF, AND THE COMPANY ASSUMES NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS.

OVERVIEW

Viant is a professional services firm that helps global companies identify and solve complex business problems with digital solutions. Viant creates value by deploying integrated teams of strategists, creative designers and technologists to work closely with the client to develop and implement solutions that address challenges facing businesses today. Viant focuses upon service offerings related to collaboration networks, knowledge portals, and the leverage of intellectual property as a way to assist its clients in improving business processes and increasing revenue productivity.

Viant’s critical accounting policies and areas of significant accounting judgments and estimates are described in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Viant’s most recent Annual Report on Form 10-K for the year ended December 31, 2001, as amended on Form 10-K/A, which should be read in conjunction with the discussion below.

Viant derives substantially all of its revenues from the performance of professional services. The contracts that it enters into and operates under specify whether the engagement is on a fixed-price or time and materials basis. For each engagement, Viant generally enters into a Master Services Agreement with its clients establishing the legal and general business terms of the relationship. As specific engagements are identified, Viant and the client then enter into separate statements of work that outline the time frame, billing rates and fees applicable to the specific engagement. Typically, these engagements are of a short predetermined time frame, generally lasting three to six months. A member of Viant’s senior management team approves all contracts.

We recognize all of our revenue under written service contracts with our clients and only in those situations where collection from a client is reasonably assured. Revenues from time and materials service contracts are recognized as the services are provided. Revenues from fixed-price engagements are recognized using the percentage of completion method based on the ratio of costs incurred to the total estimated project costs. Project costs are based on the direct payroll and associated fringe benefits of the consultants on the engagement plus all direct expenses incurred to complete the engagement that are not reimbursed by the client. The percentage of completion method is used since reasonably dependable estimates of the revenues and costs applicable to various stages of a contract can be made, based on historical experience and milestones set in the contract. Finance department personnel meet regularly with project managers to discuss the status of the projects and, for fixed-price engagements, the finance department is updated on the budgeted costs and required resources to complete the project. These budgets are then used to calculate revenue recognition and to estimate the anticipated income or loss on the project. In the past, we have been required to commit unanticipated additional resources to complete projects, which have resulted in lower than anticipated profitability or losses on those contracts. We may experience similar situations in the future. Provisions for estimated losses on contracts are made during the period in which such losses become probable and can be reasonably estimated. To date, such losses have not been significant.

The market for our professional services has declined significantly and sales cycles have lengthened. As a result of these effects, our gross revenues for the second quarter of 2002 decreased by 43% as compared to our gross revenues for the second quarter of 2001. We expect to continue to incur net losses in future quarters.

Viant’s revenues and earnings may fluctuate from quarter to quarter based on such factors within and outside its control, including: the variability in market demand for the Internet and for professional services, the length of the sales cycle associated with our service offerings, the number, size and scope of our projects, and the efficiency with which we utilize our employees. See “Factors Affecting Viant’s Operating Results, Business Prospects and Market Price of Stock—Fluctuations in our Quarterly Revenues and Operating Results May Lead to Reduced Prices for our Stock.” Viant does not track backlog information. Any information regarding anticipated future revenue from clients would not be meaningful and potentially misleading.

The number of Viant employees decreased from 197 as of December 31, 2001 to 162 employees as of June 30, 2002. Personnel compensation and facilities costs represent a high percentage of Viant’s operating expenses and are relatively fixed in advance of each quarter. Accordingly, if revenues do not increase, Viant’s business, financial condition or results of operations could be materially and adversely affected. In addition, Viant’s liquidity may also be adversely affected if revenues do not increase and Viant is unable to further reduce operating expenses.

SUBSEQUENT EVENT On April 5, 2002, Viant Corporation entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), with divine, inc. and DVC Acquisition Company, pursuant to which DVC, a direct, wholly owned subsidiary of divine, will be merged with and into Viant and the separate corporate existence of DVC shall cease. The Merger Agreement was subsequently amended on July 23, 2002 and August 2, 2002 to provide for revised terms of the pending transaction. As divine will not assume or substitute any of the outstanding Viant stock options, all of the outstanding Viant stock options will accelerate and become fully exercisable for a 15-day period. At the end of the 15-day period, Viant’s 1996 Stock Option Plan, 1999 Stock Option Plan and all outstanding, unexercised options under those plans will terminate.

Following the merger, Viant will be a wholly owned subsidiary of divine.

OPERATING AND OTHER EXPENSES

Viant’s operating and other expenses are comprised of the following:

• Cost of professional services which consist primarily of compensation and benefits for employees engaged in the delivery of professional services and all direct expenses related to client projects.

• Sales and marketing expense which consists primarily of compensation, benefits and travel costs for employees in the sales and marketing and research and development groups, marketing program costs and an allocation of facilities costs.

• General and administrative expense which consists primarily of compensation, benefits and travel costs for employees in Viant’s management, human resources, finance and administration groups, and an allocation of facilities costs.

• Interest and other income (expense), net which consists primarily of interest earned on cash and cash equivalents and short and long-term investments, interest paid on capital lease obligations and the write-down of long-term investments.

RESULTS OF OPERATIONS

The following table sets forth the percentage of revenues of certain items included in the Company’s consolidated statements of operations:

VIANT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS PERCENTAGES

	Three Months Ended				Six Months Ended
	June 30, 2002		June 30, 2001		June 30, 2002		June 30, 2001

Revenues:
Revenues before expense reimbursements	93		94		93		94
Reimbursements for expenses	7		6		7		6
Total revenues	100	%	100	%	100	%	100	%

Operating expenses:
Cost of professional services
Cost of professional services before reimbursable expenses	69		86		75		87
Reimbursable expenses	7		6		7		6
Total cost of professional services	76		92		82		93
Sales and marketing	20		25		23		22
General and administrative	94		94		101		86
Restructuring	55		—		29		66

Total operating expenses	245		211		235		267

Loss from operations	(145	)	(111	)	(135	)	(167	)
Interest and other income (expense), net	9		13		10		11

Net loss	(136	)%	(98	)%	(125	)%	(156	)%

COMPARISON OF THE QUARTERS ENDED JUNE 30, 2002 AND JUNE 30, 2001

REVENUES. Gross revenues decreased 43% to $5.8 million for the second quarter of 2002 from $10.2 million for the second quarter of 2001. Net revenues (excluding reimbursements of expenses) decreased 44% to $5.3 million for the second quarter of 2002 from $9.5 million for the second quarter of 2001. The decrease in revenues reflects an overall decrease in demand for professional services, variability in market demand for the Internet and a decrease in the number, size and scope of our projects. We believe that period-to-period comparisons of our operating results are not necessarily meaningful. Net revenues derived from Viant’s three largest clients, as a percentage of total net revenues, increased to 89% for the second quarter of 2002 from 53% for the second quarter of 2001. Net revenues derived from Viant’s largest client increased to 69% for the second quarter of 2002 from 34% for the second quarter of 2001.

COST OF PROFESSIONAL SERVICES. Cost of professional services decreased 53% to $4.4 million for the second quarter of 2002 from $9.4 million for the second quarter of 2001. This decrease was primarily due to a reduction in professional services personnel to 119 as of June 30, 2002 from 242 as of June 30, 2001, as a result of restructurings undertaken by us in 2001, and the corresponding decrease in Viant’s compensation and compensation related expenses for such personnel. Cost of professional services decreased as a percentage of gross revenues to 76% for the second quarter of 2002 from 92% for the second quarter of 2001. This decrease was primarily the result of an overall decrease in professional services personnel and increased utilization of our remaining professional services staff on client engagements for the period.

SALES AND MARKETING. Sales and marketing expense decreased 55% to $1.2 million for the second quarter of 2002 from $2.6 million in the second quarter of 2001. The primary contributors to this decrease were reductions in sales and marketing personnel, as a result of restructurings undertaken by us in 2001, and the corresponding decrease in compensation and compensation related expenses, which accounted for 78% of the decrease and reductions in Viant’s marketing and branding efforts, which accounted for 17% of the decrease. Sales and marketing expense decreased as a percentage of gross revenues to 20% for the second quarter of 2002 from 25% for the second quarter of 2001. This decrease was due to reductions in sales and marketing personnel and the corresponding decrease in compensation and compensation related expenses at a higher rate than the decrease in revenues for the second quarter of 2002 versus the same period in 2001.

GENERAL AND ADMINISTRATIVE General and administrative expense decreased 43% to $5.4 million for the second quarter of 2002 from $9.5 million in the second quarter of 2001. The primary contributors to this decrease were reductions in: compensation and compensation related expenses, which accounted for 58% of the decrease, infrastructure costs, which accounted for 36% of the decrease, travel costs, which accounted for 12% of the decrease, and outside consultants and services expense, which accounted for 12% of the decrease. This aggregate decrease was offset by a reversal of a portion of the bad debt provision in the second quarter 2001, which accounted for a 22% increase. General and administrative expense as a percentage of gross revenues was at 94% for the second quarter of 2002 and for the second quarter of 2001.

RESTRUCTURING. In December 2000, Viant recorded restructuring and other related charges of $6.0 million, consisting of $1.7 million for headcount reductions, $4.0 million for closure and consolidation of facilities and related fixed assets, and $0.3 million of other related restructuring charges. These restructuring and other related charges were taken to align Viant’s cost structure with changing market conditions and decreased demand for Viant’s services. The plan resulted in headcount reduction of 125 employees, which was made up of 99 professional services staff and 26 enterprise services staff.

Restructuring reserve activities during the quarter ended June 30, 2002 were as follows (in thousands):

	Balance							Balance
	March 31, 2002		Expense		Utilization			June 30, 2002
Severance and benefits	$	—	$	—	$	—		$	—
Facilities	7,142		3,184		(1,065		)	9,261
Other	115		—		(18		)	97
Total	$	7,257	$	3,184	$	(1,083	)	$	9,358

INTEREST AND OTHER INCOME (EXPENSE), NET. Interest and other income (expense), net decreased 61% to $0.5 million in the second quarter of 2002 from $1.3 million in the second quarter of 2001. This decrease was primarily the result of a decrease in income from the investment of cash, cash equivalents and short-term investments due to declining interest rates and the use of these funds for operations. Cash used for operations, net of restructuring activities, for the second quarter 2002 and 2001 totaled $3.5 million and $10.6 million, respectively.

COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2002 AND JUNE 30, 2001

REVENUES. Gross revenues decreased 56% to $11.1 million for the first six months of 2002 from $25.2 million for the first six months of 2001. Net revenues (excluding reimbursements of expenses) decreased 57% to $10.3 million for the first six months of 2002 from $23.8 million for the first six months of 2001. The decrease in revenues reflects an overall decrease in demand for professional services, variability in market demand for the Internet and a decrease in the number, size and scope of our projects. We believe that period-to-period comparisons of our operating results are not necessarily meaningful. Net revenues derived from Viant’s three largest clients, as a percentage of total net revenues, increased to 83% for the first six months of 2002 from 40% for the first six months of 2001. Net revenues derived from Viant’s largest client increased to 68% for the first six months of 2002 from 22% for the first six months of 2001.

COST OF PROFESSIONAL SERVICES. Cost of professional services decreased 61% to $9.2 million for the first six months of 2002 from $23.5 million for the first six months of 2001. This decrease was primarily due to a reduction in professional services personnel to 119 as of June 30, 2002 from 242 as of June 30, 2001, as a result of restructurings undertaken by us in 2001, and the corresponding decrease in Viant’s compensation and compensation related expenses for such personnel. Cost of professional services decreased as a percentage of gross revenues to 82% for the first six months of 2002 from 93% for the first six months of 2001. This decrease was primarily the result of an overall decrease in professional services personnel and increased utilization of our remaining professional services staff on client engagements for the period.

SALES AND MARKETING. Sales and marketing expense decreased 53% to $2.6 million for the first six months of 2002 from $5.5 million in the first six months of 2001. The primary contributors to this decrease were reductions in sales and marketing personnel, as a result of restructurings undertaken by us in 2001, and the corresponding decrease in compensation and compensation related expenses, which accounted for 68% of the decrease, reductions in Viant’s marketing and branding efforts, which accounted for 19% of the decrease and reductions in travel for sales and marketing personnel, which accounted for 4% of the decrease. Sales and marketing expense increased as a percentage of gross revenues to 23% for the first six months of 2002 from 22% for the first six months of 2001. This increase was due to lower revenues generated per sales employee and a decrease in revenues for the first six months of 2002 versus the same period in 2001.

GENERAL AND ADMINISTRATIVE General and administrative expense decreased 48% to $11.2 million for the first six months of 2002 from $21.7 million in the first six months of 2001. The primary contributors to this decrease were reductions in: compensation and compensation related expenses, which accounted for 36% of the decrease, infrastructure costs, which accounted for 30% of the decrease, travel costs, which accounted for 16% of the decrease, and outside consultants and services expense, which accounted for 10% of the decrease. General and administrative expense increased as a percentage of gross revenues to 101% for the first six months of 2002 from 86% for the first six months of 2001. This increase was primarily the result of a decrease in revenue for the first six months of 2002 versus the same period in 2001.

Restructuring reserve activities during the six months ended June 30, 2002 were as follows (in thousands):

	Balance							Balance
	December 31, 2001		Expense		Utilization			June 30, 2002

Severance and benefits	$	119	$	—	$	(119	)	$	—
Facilities	20,567		3,184		(14,490		)	9,261
Other	136		—		(39		)	97
Total	$	20,822	$	3,184	$	(14,648	)	$	9,358

INTEREST AND OTHER INCOME (EXPENSE), NET. Interest and other income (expense), net decreased 57% to $1.2 million in the first six months of 2002 from $2.7 million in the first six months of 2001. This decrease is primarily the result of a decrease in income from the investment of cash, cash equivalents and short-term investments due to declining interest rates and the use of these funds for operations. Cash used in operations, net of restructuring activities, for the six months ending June 30, 2002 and June 30, 2001, totaled $11.6 million and $20.3 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, Viant has funded its operations and investments in property and equipment through private and public equity financings, bank borrowings and capital lease financing arrangements. Viant’s cash and cash equivalents and short-term investments decreased from $137.8 million at December 31, 2001 to $111.3 million as of June 30, 2002, which includes $2.0 million to collateralize letters of credit.

The majority of Viant's liquid unused assets, as of June 30, 2002 consisted of $87.9 million of cash and cash equivalents and $23.4 million of short-term investments. Viant considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. All other investments with original maturities between 91 and 360 days are classified as short-term investments because they are liquid and are available to meet working capital needs. For a further breakdown of our interest bearing funds, please see Part I, Item III, "Quantitative and Qualitative Disclosures about Market Risk". Viant believes that its current cash, cash equivalents and short-term investments will be sufficient to meet Viant's working capital and capital expenditure needs. However, there can be no assurance that Viant will not require additional financings within this time frame or that such additional financing, if needed, will be available on terms acceptable to Viant, if at all.

Cash used by operations during the six months ended June 30, 2002 was $26.2 million, primarily due to losses from operations, totaling $13.9 million and a decrease in the restructuring reserve as a result of the buyout of a Boston lease agreement, totaling $11.9 million. Cash provided by investing activities during this period was $70.8 million, primarily due to the maturities of short-term investments.

Viant has a $3.2 million capital lease facility with a leasing company that is secured by the capital assets purchased with the borrowings. Outstanding borrowings under the above credit facility totaled $0.4 million as of June 30, 2002, which will be repaid over the next 15 months.

Viant leases office facilities and certain equipment under operating and capital leases, respectively. Viant is party to letters of credit in support of their minimum future lease payments under leases for permanent office space amounting to $2.0 million as of June 30, 2002, declining annually. These letters of credit are collateralized in equal amounts by short-term certificates of deposit.

On July 12, 2002, Viant entered into an agreement to eliminate a $3.5 million real estate obligation, as of June 30, 2002, through the buyout of its Atlanta lease agreement. In connection with the lease buyout, Viant paid a total of $1.4 million in August 2002, which was accrued in Viant’s restructuring reserve as of December 31, 2001.

Viant’s minimum future lease commitments under noncancelable capital and operating leases at June 30, 2002, including reducing the Atlanta lease commitment to the final settlement payment of $1.4 million and amounts comprehended in the restructuring reserve, are as follows (in thousands):

	Capital		Operating

2002	$	360	$	5,260
2003	20		6,082
2004	—		4,342
2005	—		3,002
2006	—		2,103
Thereafter	—		3,389
Total minimum lease payments	380		24,178
Less: Amounts representing sublease income	—		2,507
Less: Amount representing interest	15		—
Total present value of minimum capital lease payments and total operating lease payments, net of sublease income	$	365	$	21,671

In October 2000, Viant’s Board of Directors authorized the repurchase of up to $50 million of Viant’s outstanding common stock. Under the stock repurchase program, Viant may purchase shares from time to time through October 2002. Since the inception of the stock repurchase program and through June 30, 2002, Viant has repurchased a total of 2.7 million shares for $7.2 million. There were no repurchases made during the six months ended June 30, 2002.

Pursuant to the merger agreement, as amended, with divine, Viant may be obligated to pay a termination fee in the amount of $2.7 million in the event of certain circumstances resulting in the termination of the agreement or may be required to pay the reasonable out-of-pocket expenses of divine if Viant’s stockholders do not approve and adopt the merger agreement and approve the merger of DVC with and into Viant.

New Accounting Pronouncements

FACTORS AFFECTING VIANT’S OPERATING RESULTS, BUSINESS PROSPECTS AND MARKET PRICE OF STOCK

The following important factors, among others, could cause actual results to differ materially from those contained in forward-looking statements made in this Quarterly Report on Form 10-Q or presented elsewhere by management from time to time.

Our Limited Operating History in the Professional Services Market Increases the Possibility that the Value of Your Investment Will Decline

We were formed in 1996. Our limited operating history in the professional services market makes it difficult to evaluate our business. The uncertainty of our future performance and the uncertainties regarding the Internet, such as taxation, technical limitations and competition, increase the risk that the value of your investment will decline. Our failure to accurately address the issues facing our business could cause our business results to significantly decline.

Our Business May Be Negatively Impacted If We Fail to Accurately Estimate the Time and Resources Necessary for the Performance of our Services

We enter into fixed-price, fixed-time contracts, as well as contracts in which the client pays us on a time and materials basis. If we fail to accurately estimate the resources required for a fixed-price, fixed-time project or fail to satisfy our contractual obligations in a manner consistent with the project plan, then our costs to complete the project could increase substantially. We have occasionally had to commit unanticipated additional resources to complete projects, and we may have to take similar action in the future.

If Clients do not Rehire us for New Projects, or They Terminate or Reduce the Scope of Existing Projects, our Revenues May Decline

Our engagements vary in size and scope. If clients do not retain us for subsequent engagements, then our revenues could decline. In addition, while our service model is designed as an integrated approach, each sequential phase of that process represents a separate contractual commitment. The client may elect not to proceed to the next phase of a project. The decision of clients not to proceed to the next phase of a project could impair our revenues. Most of our contracts cannot be terminated by a client unless we have materially breached the contract. However, a client may nevertheless attempt to cancel or reduce the scope of a project. It is possible that we may agree to the cancellation or reduction in scope, or that in the event of a dispute over whether it has the right to cancel or reduce the scope of a project, the client may prevail. The cancellation, or reduction in scope, of a project could have a negative impact on our revenues.

Our Revenues Could Be Negatively Affected by the Loss of a Major Client

We derive a significant portion of our revenues from large projects for a limited number of clients. The loss of any major client could dramatically reduce our revenues. For the quarter ended June 30, 2002, our five largest clients accounted for approximately 94% of our net revenues. During this period three clients each accounted for more than 5% of net revenues, of which two clients each accounted for more than 10% of our net revenues, and one client accounted for more than 65% of our net revenues. In the second quarter of 2001, our five largest clients accounted for approximately 66% of our net revenues. During such period five clients each accounted for more than 5% or our revenues, of which two clients each accounted for more than 10% of our net revenues, and no clients accounted for more than 65% of or net revenues.

Fluctuations in our Quarterly Revenues and Operating Results May Lead to Reduced Prices for our Stock

We believe that period-to-period comparisons of our operating results are not necessarily meaningful. You should not rely upon these comparisons or existing statements made by the Company regarding our ability to sustain revenue growth as actual indicators of future performance. Moreover, if our operating results in any future period fall below the expectations of securities analysts and investors, whether these expectations are based upon such comparisons or statements, the market price of our securities would likely decline. Factors that have caused our results to fluctuate in the past and which are likely to affect us in the future include the following:

• variability in market demand for the Internet and for professional services;

• length of the sales cycle associated with our service offerings;

• the number, size and scope of our projects; and

• the efficiency with which we utilize our employees, including our ability to transition employees from completed engagements to new engagements and our ability to effectively capture additional client projects.

In addition, other factors may also affect us, including:

• the introduction of new services by our competitors;

• changes in pricing policies by our competitors; and

• our ability to attract and retain clients.

Some of these factors are within our control and others are outside our control.

The Professional Services Market is Highly Competitive and Has Low Barriers to Entry. If We Cannot Effectively Compete, Our Revenues May Decline

The professional services market is intensely competitive. We expect competition to intensify even further as this market evolves. Many of our competitors have longer operating histories, more clients, longer relationships with their clients, greater brand or name recognition and significantly greater financial, technical, marketing and public relations resources than we do. As a result, our competitors may be in a stronger position to respond quickly to new or emerging technologies and changes in client requirements. They may also develop and promote their products and services more effectively than we do. There are relatively low barriers to entry into the professional services market. In addition, we do not own any patented technology that stops competitors from entering the professional services market from providing services similar to ours. As a result, new and unknown market entrants pose a threat to our business. Current or future competitors may develop or offer services that are comparable or superior to ours at a lower price, which could significantly decrease our revenues.

Our Business Will Be Negatively Affected If We Do Not Keep up with the Industry’s Rapid Technological Change, Evolving Industry Standards and Changing Client Requirements

The professional services market is characterized by rapidly changing technology, evolving industry standards and changing client needs. Accordingly, our future success will depend, in part, on our ability to meet these challenges. Among the most important challenges facing us are the need to:

• effectively use leading technologies;

• continue to develop our strategic, creative and technical expertise;

• influence and respond to emerging industry standards and other technological changes;

• enhance our current service offerings;

• develop new service offerings that meet changing customer needs; and

• advertise and market our services.

All of these challenges must be met in a timely and cost-effective manner. We cannot assure you that we will succeed in effectively meeting these challenges and our failure to do so could harm our business results.

Our Revenues May Decrease If Growth in the Use of the Internet Declines

Our business is dependent upon continued growth in the use of the Internet by our clients, prospective clients and their customers and suppliers. Published reports indicate that capacity constraints caused by growth in Internet usage may, unless resolved, impede further growth in Internet use. If the number of users on the Internet does not increase and commerce over the Internet does not become more accepted and widespread, demand for our services may decrease and, as a result, our revenues would decline. The factors that may affect Internet usage or electronic commerce adoption include:

• actual or perceived lack of security of information;

• lack of access and ease of use;

• congestion of Internet traffic;

• inconsistent quality of service;

• increases in access costs to the Internet;

• excessive governmental regulation;

• uncertainty regarding intellectual property ownership;

• reluctance to adopt new business methods; and

• costs associated with the obsolescence of existing infrastructure.

We May Face Intellectual Property Claims that May Be Costly to Resolve or Limit Our Ability to Use Intellectual Property in the Future

We are obligated under some agreements to indemnify other parties as a result of claims that we infringe on the proprietary rights of third parties. Although we do not believe that the solutions that we develop for clients infringe on any third-party proprietary rights, we cannot assure you that third parties will not assert infringement claims against us in the future or that these claims will not be successful. We could incur substantial costs and diversion of management resources to defend any claims relating to proprietary rights. These costs and diversions could cause our business results to suffer. If any party asserts a claim against us relating to proprietary technology or information, we may need to obtain licenses to the disputed intellectual property. We cannot assure you, however, that we will be able to obtain these licenses on commercially reasonable terms or that we will be able to obtain any licenses at all. The failure to obtain necessary licenses or other rights could cause our business results to suffer. Our business often involves the development of software applications for specific client engagements. We generally retain the right to use any intellectual property that is developed during a client engagement that is of general applicability and is not specific to the client’s project. We also develop software applications for our own internal use and we retain ownership of these applications. There can be no assurance that clients will not demand assignment of ownership or restrictions on our use of the work that we produce for clients in the future. Issues relating to the ownership of and rights to use software can be complicated and there can be no assurance that disputes will not arise that affect our ability to reuse this software that could harm our business results.

The Focus of Our Business Model Along Vertical Market Segments Could Negatively Affect our Business Results

Our business model is focused on certain identified vertical market segments, such as, Financial Services, Media and Entertainment and Pharmaceutical/Healthcare. We believe that this focus has certain risks including the following:

• development or acquisition of the appropriate people and skill sets to serve the specialized demands of the segments;

• expense in obtaining relevant segment knowledge;

• inability to establish vertical expertise in additional market segments; and

• reliance upon industries in a few specified segments.

Any of these factors or other factors not enumerated here could damage our business results.

Provisions of Our Charter, By-Laws and Shareholder Rights Plan May Delay or Prevent Transactions that Are in Your Best Interests

Our certificate of incorporation and bylaws state that any action that can be taken by stockholders must be done at an annual or special meeting and may not be done by written consent, and require reasonable advance notice of a stockholder proposal or director nomination. The chairman of the board, the chief executive officer, the president or the board of directors are the only ones who may call a special meeting. The certificate of incorporation and bylaws also provide for a classified board of directors, and provide that members of the board of directors may be removed by the vote of the holders of at least a majority of the shares entitled to vote for that director. In addition, the board of directors has the authority, without further action by the stockholders, to fix the rights and preferences of and issue 5,000,000 shares of preferred stock, and on March 27, 2001, our board of directors approved and adopted a preferred stock rights agreement pursuant to which each of our stockholders of record on April 30, 2001 received the right to buy a share of our newly created Series A Junior Participating Preferred Stock upon the occurrence of certain events triggered by third parties. Under the merger agreement with divine, we have agreed to amend our shareholder rights plan so that the signing of the merger agreement and the consummation of the merger do not trigger any rights under the plan. The provisions of our certificate of incorporation, bylaws and preferred stock rights agreement may have the effect of deterring hostile takeovers or delaying or preventing changes in control of management, including transactions in which you might otherwise receive a premium for your shares. In addition, these provisions may limit your ability to approve other transactions that you find to be in your best interests.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk relates primarily to our investment portfolio, and the effect that changes in interest rates would have on that portfolio. Our investment portfolio includes:

• Cash and cash equivalents, which consist of financial instruments with purchased maturities of three months or less; and

• Short-term investments, which consist of financial instruments that meet the high quality standards specified in our investment policy.

We do not use derivative financial instruments for speculative or trading purposes. Due to the short duration of the financial instruments we invest in, we do not expect that an increase in interest rates would result in any material loss to our investment portfolio.

At June 30, 2002, Viant’s cash and cash equivalents and short-term investments consisted primarily of certificates of deposit, U.S. Government-backed securities and money market funds secured by U.S. Government-backed securities. The following table represents the carrying value and related weighted-average interest return for our investment portfolio. The carrying value approximates fair value at June 30, 2002.

(in thousands, except for interest rates)

June 30, 2002	Carrying Value		Weighted Average Interest Return

Cash and Cash Equivalents
Savings – variable rate	$	960	1.56	%
Money Market – variable rate	35,412		1.83	%
Certificates of Deposit – fixed rate	6,404		1.60	%
U.S.Government notes and bonds – fixed rate	43,946		1.52	%
Total Cash and Cash Equivalents	$	86,722	1.65	%
Short-term investments
U.S. Government notes and bonds–fixed rate	23,424		2.45	%

Total interest bearing instruments	$	110,146	1.82	%

Non-interest bearing instruments		1,197	-

Total Cash and cash equivalents and short-term investments	$	111,343	1.82	%

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, Viant may be involved in litigation incidental to the conduct of its business.

On July 16, 2001, the first of several purported securities class action lawsuits was filed in the United States District Court, Southern District of New York against certain underwriters involved in Viant’s initial public offering, Viant, and certain of Viant’s current and former officers and directors. The Court consolidated the cases against Viant into case number 01 Civ. 6403. On April 19, 2002, plaintiffs filed a consolidated amended class action complaint. Plaintiffs allege, among other things, violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 involving undisclosed compensation to the underwriters, and improper practices by the underwriters and seek unspecified damages.

Similar complaints were filed in the same court against numerous public companies that conducted initial public offerings (“IPOs”) of their common stock since the mid-1990s. All of these lawsuits were consolidated for pretrial purposes before Judge Shira Scheindlin of the United States District Court for the Southern District of New York as In re Initial Public Offering Securities Litigation, Civil Action No. 21-MC-92. Defendants in these cases have filed omnibus motions to dismiss. Viant denies the allegations against it and intends to defend itself vigorously.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

The following information is provided as an amendment to the initial report on Form SR, “Report of Sales of Securities and Use of Proceeds Therefrom,” regarding the use of proceeds from the sale of common stock under the Company’s Registration Statement on Form S-1 (SEC file number 333-76049), which was declared effective on June 17, 1999. The information provided is for the period from June 17, 1999 through June 30, 2002.

During this period, Viant utilized $59,109,000 of the proceeds from our Initial Public Offering and Secondary Offering in 1999 which totaled $170,452,000. Viant used approximately $18,062,000 in connection with our restructuring actions and the remaining $41,047,000 in connection with working capital for the operation of our business. None of the proceeds were used as finder’s fees or other payments to any of our directors officers or other affiliates, except for payments we made in the ordinary course of business to our directors and officers for directors’ fees, salary and bonus out of our working capital. As of June 30, 2002, Viant has used all the net proceeds received from its initial public offering, effective June 17, 1999.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On June 20, 2002, Viant held its annual meeting of stockholders to seek their approval as to the following matters: the reelection of Robert L. Gett and William E. Kelvie as Class III Directors and the ratification of the appointment of PricewaterhouseCoopers, LLP as the Company’s independent auditors.

There were 49,170,813 shares outstanding and available to vote at the meeting.

As to the reelection of directors:

	· Mr. Gett received: 40,888,243 shares for his reelection, 1,775,325 shares voted against the reelection and 6,507,245 shares did not vote;

	· Mr. Kelvie received: 40,941,057 shares for his reelection, 1,722,511 shares voted against the reelection and 6,507,245 shares did not vote.

As to the ratification of the appointment PricewaterhouseCoopers, LLP, 41,272,931 shares voted for the appointment, 1,380,288 shares voted against the appointment, 10,349 shares abstained from voting and 6,507,245 shares did not vote.

In addition, the terms of the following directors continued after the date of the meeting: Venetia Kontogouris, Jenne K. Britell, Ph.D. and John Gibbons, Ph.D.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits

None


(b) Reports on Form 8-k

The Company filed a report on Form 8-K on April 8, 2002, related to the merger agreement entered into with divine, inc.

SIGNATURES

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

		VIANT CORPORATION

		By	/s/ Robert L. Gett
			Robert L. Gett
			Chairman and Chief Executive Officer
			Director
Date: August 14, 2002


	By		/s/ M. Dwayne Nesmith
			M. Dwayne Nesmith
			Vice President and
			Chief Financial Officer
Date: August 14, 2002

VIANT CORP 10-Q