Jupitermedia Corporation Reports Record Results for Its First Quarter Ended March 31, 2006

Highlights for the first quarter include:

-- Revenues for the first quarter of 2006 were $33.9 million compared to revenues of $19.7 million for the same period last year, an increase of 72%.

-- EBITDA grew 24% to $8.6 million. The results of the first quarter of 2006 include non-cash stock-based compensation expense of $761,000.

-- Earnings per diluted share from continuing operations were $0.08 and included stock-based compensation expense of $0.01.

Beginning on January 1, 2006, Jupitermedia began expensingstock-based compensation. The results of the first quarter of 2006include non-cash stock-based compensation expense of $761,000. Theprovision for income taxes for the first quarter of 2006 increased to$1.7 million from $678,000 for the same period last year. Net incomefor the first quarter of 2006 was $9.2 million, or $0.25 per dilutedshare, compared to net income of $5.5 million, or $0.16 per dilutedshare, for the same period last year. Net income for the first quarterof 2006 included a gain of $6.2 million, net of income taxes, relatedto the sale of Jupitermedia's Research business.

As a result of the sale of the JupiterResearch business, thesefinancial results reflect Jupitermedia's Research segment as adiscontinued operation in accordance with Statement of FinancialAccounting Standards No. 144. Prior year financial results have beenpresented to reflect Jupitermedia's Research segment as a discontinuedoperation.

"Our financial results for the first quarter showed improvementover the same quarter in the prior year with significant increases inrevenue and EBITDA" stated Jupitermedia's Chairman and CEO Alan M.Meckler. "We have been emphasizing the development of ourJupiterimages division and the sale of the JupiterResearch business isfurther evidence of Jupitermedia's strategy to be primarily focused onour rapidly growing digital asset collections. Jupitermedia continuesto grow as a powerful creator and distributor of a wide range ofcommercial images and digital content. In addition to the expansion ofour image offerings, through several acquisitions we increased ourwholly-owned royalty-free music offerings during the quarter. In themeantime we continue to evolve as a company making positive financialprogress not only with Jupiterimages, but with our JupiterWeb divisionas well," added Meckler.

Jupitermedia Corporation 1st Quarter 2006 Financial ResultsConference Call Alert

Jupitermedia Corporation invites you to participate in itsconference call reviewing 2006 first quarter results on Wednesday, May10, 2006 at 11:00 am EST.

The conference call number is (800) 946-0785 for domesticparticipants and (719) 457-2661 for international participants; passcode "984 6690." Please call five minutes in advance to ensure thatyou are connected prior to the presentation. The conference callreplay will be available until Wednesday, May 24, 2006. Replay callnumbers are (888) 203-1112 for domestic participants and (719)457-0820 for international participants: pass code: "984 6690."

Acquisitions

In January 2006, Jupitermedia purchased a 49.7% equity investmentin HAAP Media Ltd., based in Budapest, Hungary. HAAP Media operatestwo stock photo related Web sites: Stock.xchng (www.sxc.hu) andStockxpert.com (www.stockxpert.com). Financial terms of thetransaction were not disclosed.

In February 2006, Jupitermedia acquired all of the shares of StockImage S.A.S (www.stockimage.fr) for approximately U.S. $11.1 millionin cash. Located in Paris, France, Stock Image is a leading resourcefor rights-managed images through its Stock Image brand androyalty-free images through its Pixland (www.pixland.fr) brand.

In February 2006, Jupitermedia acquired the assets of The BeautyArchive (www.thebeautyarchive.com). The Beauty Archive is a leadingprovider of rights-managed images for business users and creativeprofessionals in the editorial, advertising and design industries.Terms of the acquisition were not disclosed.

In March 2006, Jupitermedia acquired the assets of Crank CityMusic, which includes a wholly-owned music library of over 1,300royalty-free music tracks and its Web site (www.crankcity.com). CrankCity Music provides royalty-free CD collections in a variety of themesand styles for a wide range of product applications, and MP3 downloadswith a simple e-commerce process. Terms of the acquisition were notdisclosed.

In April 2006, Jupitermedia acquired certain assets of SteveShapiro Music, including a wholly-owned music library of over 2,200royalty-free music tracks with a wide selection of tracks offeringmoods, themes and instrumentation ranging from hip-hop to classicalstyles. Terms of the acquisition were not disclosed.

In May 2006, Jupitermedia acquired all of the shares of IFABilderteam GmbH (www.ifa-bilderteam.com). IFA Bilderteam isheadquartered in Munich, Germany and has an office in Dusseldorf,Germany. IFA Bilderteam is a leading resource for rights-managedimages. Terms of the acquisition were not disclosed.

Divestiture and Discontinued Operations

In March 2006, Jupitermedia announced that it sold itsJupiterResearch division for $10.1 million in cash and the assumptionof certain liabilities by the purchaser, subject to certainpost-closing adjustments. The purchaser is JupiterResearch, LLC asubsidiary of JupiterKagan, Inc., which is a portfolio company of MCGCapital Corporation (Nasdaq: MCGC). As a result of this sale,Jupitermedia's Research segment is now being presented as adiscontinued operation in accordance with Statement of FinancialAccounting Standards No. 144.

New Online Images Offerings

Jupitermedia continued to expand and strengthen its world-classproprietary Jupiterimages offerings with the addition of thefollowing:

In January 2006, Jupitermedia announced an exclusive worldwidepartnership with Photographic Youth Music Culture Archive (PYMCA), arights-managed image company based in London, U.K. The PYMCAcollection is available at www.jupiterimages.com.

In February 2006, Jupitermedia announced the launch of FlashKit'sFlashFoundry.com (www.flashfoundry.com), a new paid subscriptionservice offering over 100,000 professional-quality Flash components,video, buttons, animations and templates. Web designers and PowerPointusers can easily add Flash content to their Web sites andpresentations in just minutes, rather than creating it from scratch.

In March 2006, Jupitermedia announced the launch of Photostock.jp(www.photostock.jp), a Japanese language version of its Photos.com(www.photos.com) subscription service. Operated by a team in Japan,Photostock.jp is modeled after Photos.com and was specifically builtfor the Japanese marketplace.
Jupitermedia Corporation
Consolidated Statements of Operations
For the Three Months Ended March 31, 2005 and 2006
(unaudited)
(in thousands, except per share amounts)

Three Months Ended
March 31,
------------------
2005 2006
--------- --------
Revenues $ 19,711 $33,941

Cost of revenues (exclusive of items shown
separately below) 6,256 11,925
Advertising, promotion and selling 3,369 7,166
General and administrative 3,144 6,231
Depreciation 278 653
Amortization 829 2,271
--------- --------
Total operating expenses 13,876 28,246
--------- --------
Operating income 5,835 5,695
Income (loss) on investments and other, net (30) 73
Interest income 119 117
Interest expense (88) (1,319)
--------- --------
Income before income taxes, minority interests and
equity income from venture fund investments and
other, net 5,836 4,566
Provision for income taxes 678 1,715
Minority interests (23) (9)
Equity (loss) from venture fund investments and
other, net - (9)
--------- --------
Income from continuing operations 5,135 2,833
Income from discontinued operations, net of taxes 411 67
Gain on sale of discontinued operations, net of
taxes - 6,291
--------- --------
Net income $ 5,546 $ 9,191
========= ========
Earnings per share:
Basic
Income from continuing operations $ 0.16 $ 0.08
========= ========
Net income $ 0.17 $ 0.26
========= ========
Diluted
Income from continuing operations $ 0.14 $ 0.08
========= ========
Net income $ 0.16 $ 0.25
========= ========
Shares used in computing earnings per share:
Basic 32,733 35,111
========= ========
Diluted 35,693 36,735
========= ========

Segment Information

The following tables summarize the results of the segments of
Jupitermedia for the three months ended March 31, 2005 and 2006.
Online images consists of the Jupiterimages business that includes
BananaStock, Brand X, FoodPix, Botanica, Nonstock, The Beauty Archive,
Comstock Images, Creatas Images, PictureQuest, Liquid Library,
Thinkstock Images, Thinkstock Footage, Bigshot Media, Goodshoot,
ITStockFree, Stock Image, Pixland, Photos.com, Ablestock.com,
PhotoObjects.net, Clipart.com, FlashFoundry.com and
AnimationFactory.com. Online media consists of the JupiterWeb business
that includes the internet.com, EarthWeb.com, DevX.com and
Graphics.com Networks. Other includes corporate overhead, depreciation
and amortization.

Three Months Ended
March 31,
(unaudited)
(in thousands)
-------------------
2005 2006
--------- ---------
Revenues:
Online images $ 12,163 $ 26,565
Online media 7,540 7,370
Other 8 6
--------- ---------
19,711 33,941
--------- ---------
Operating expenses (A):
Online images 5,359 16,176
Online media 5,045 5,179
Other 3,472 6,891
--------- ---------
13,876 28,246
--------- ---------

Operating income (loss):
Online images 6,804 10,389
Online media 2,495 2,191
Other (3,464) (6,885)
--------- ---------
$ 5,835 $ 5,695
========= =========

(A) Operating expenses include stock-based compensation expense of
$761,000 for the first quarter of 2006.

Jupitermedia Corporation
Consolidated Balance Sheets
December 31, 2005 and March 31, 2006
(in thousands, except share and per share amounts)

December 31, March 31,
2005 2006
------------ ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 18,546 $ 26,637
Accounts receivable, net of allowances of $1,935
and $1,648, respectively 20,640 23,309
Prepaid expenses and other 3,517 3,723
Deferred income taxes 425 797
Assets of discontinued operations 8,763 -
---------- ---------
Total current assets 51,891 54,466

Property and equipment, net 9,807 10,736
Intangible assets, net 66,799 74,120
Goodwill 169,960 177,474
Deferred income taxes 8,690 6,484
Investments and other assets 1,766 2,248
---------- ---------
Total assets $ 308,913 $325,528
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 6,552 $ 6,080
Accrued payroll and related expenses 2,390 2,357
Accrued expenses and other 13,287 13,978
Current portion of long-term debt 16,000 16,000
Deferred revenues 11,743 12,453
Liabilities of discontinued operations 7,211 -
---------- ---------
Total current liabilities 57,183 50,868

Long-term debt 46,214 57,214
Deferred revenues 156 182
---------- ---------
Total liabilities 103,553 108,264
---------- ---------
Stockholders' equity:
Preferred stock, $.01 par value, 4,000,000
shares authorized, no shares issued - -
Common stock, $.01 par value, 75,000,000 shares
authorized, 34,937,025 and 35,205,197 shares
issued at December 31, 2005 and March 31, 2006,
respectively 349 352
Additional paid-in capital 251,919 254,417
Accumulated deficit (45,291) (36,100)
Treasury stock, 65,000 shares at cost (106) (106)
Accumulated other comprehensive income (1,511) (1,299)
---------- ---------
Total stockholders' equity 205,360 217,264
---------- ---------
Total liabilities and stockholders' equity $ 308,913 $325,528
========== =========

Jupitermedia Corporation
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2005 and 2006
(unaudited)
(in thousands)
Three Months Ended
March 31,
-------------------
2005 2006
--------- ---------
Cash flows from operating activities:
Income from continuing operations $ 5,135 $ 2,833
Adjustments to reconcile income from continuing
operations to net cash provided by operating
activities:
Depreciation and amortization 1,116 2,924
Stock-based compensation - 761
Provision (benefit) for losses on accounts
receivable (38) (9)
Minority interests 23 9
Equity loss from investments, net - 9
(Income) loss on investments and other, net 30 (73)
Deferred income taxes - 589
Changes in current assets and liabilities (net of
businesses acquired):
Accounts receivable, net 1,580 (3,000)
Prepaid expenses and other 265 (241)
Accounts payable and accrued expenses (2,830) (3,223)
Deferred revenues (586) 736
Discontinued operations 2,523 1,110
--------- ---------
Net cash provided by operating activities 7,218 2,425
--------- ---------
Cash flows from investing activities:
Purchases of property and equipment (221) (492)
Acquisitions of businesses and other (37,830) (15,591)
Proceeds from sales of assets and other - 152
Proceeds from sale of discontinued operations - 9,600
--------- ---------
Net cash used in investing activities (38,051) (6,331)
--------- ---------
Cash flows from financing activities:
Borrowings under credit facilities 20,000 15,000
Debt issuance costs (75) (12)
Repayment of borrowings under credit facility - (4,000)
Proceeds from exercise of stock options 330 1,027
--------- ---------
Net cash provided by financing activities 20,255 12,015
--------- ---------
Effect of exchange rates on cash (15) (18)
--------- ---------
Net increase (decrease) in cash and cash
equivalents (10,593) 8,091
Cash and cash equivalents, beginning of period 30,179 18,546
--------- ---------
Cash and cash equivalents, end of period $ 19,586 $ 26,637
========= =========
Supplemental disclosures of cash flow:
Cash paid for income taxes $ 227 $ 5,069
========= =========
Cash paid for interest $ 5 $ 1,201
========= =========
Non-cash investing activities:
Common stock issued for acquisitions $ 21,611 $ -
========= =========

Business Outlook

Jupitermedia's financial guidance is prepared in accordance with
accounting principles generally accepted in the United States of
America. Historical results below have been adjusted to conform to
this presentation. The amounts below reflect the preliminary
allocation of the purchase prices paid by Jupitermedia in connection
with its recent acquisitions and are subject to change pending a final
allocation of these amounts. The following forward looking-statements
reflect Jupitermedia's expectations as of May 9, 2006. Due to
potential changes in general economic conditions and the various other
risk factors discussed below and in Jupitermedia's reports filed with
the Securities and Exchange Commission from time to time, actual
results may differ materially. Jupitermedia intends to continue its
practice of not updating forward-looking statements until its next
quarterly results announcement, other than in publicly available
statements.

Future Expectations

(In millions except for earnings per diluted share)
Q2 2006
to
Q2 2006 Q1 2007
---------- -------------
(A) (A)

Revenues $37.0-38.0 $156.0-161.0

Cost of revenues, advertising, promotion &
selling, and general & administrative
expenses $25.5-26.5 $100.0-105.0

EBITDA (Earnings before interest, taxes,
depreciation and amortization) $ 11.5 $ 54.0-58.0

Depreciation and amortization $ 3.0 $ 12.0-13.0

Interest expense, net $ 1.2 $ 4.0

Provision for income taxes $ 3.0 $ 15.0-16.0

Net income $ 4.3 $ 23.0-25.0

Diluted share count 36.9 37.2

Earnings per diluted share $ 0.12 $ 0.63-0.68

Notes:

(A) This financial guidance does not include estimated share-based
compensation expense relating to employee stock options in the
amount of $0.02 per share and $0.08 per share for Q2 2006 and for
the period from April 1, 2006 to March 31, 2007, respectively.

About Jupitermedia Corporation

Jupitermedia Corporation (Nasdaq: JUPM), (www.jupitermedia.com)headquartered in Darien, CT, is a leading global provider of originalinformation and images for information technology, business andcreative professionals. Jupitermedia includes Jupiterimages, one ofthe leading images companies in the world with over 7.0 million imagesonline serving creative professionals with brands like BananaStock,Brand X, FoodPix, Botanica, Nonstock, The Beauty Archive, IFABilderteam, Comstock Images, Creatas Images, PictureQuest, LiquidLibrary, Thinkstock Images, Thinkstock Footage, Bigshot Media,Goodshoot, ITStockFree, Stock Image, Pixland, Photos.com,Ablestock.com, PhotoObjects.net, Clipart.com, FlashFoundry.com andAnimationFactory.com. The online media division of Jupitermedia isJupiterWeb, which operates four distinct online networks: internet.comand EarthWeb.com for IT and business professionals; DevX.com fordevelopers; and Graphics.com for creative professionals. JupiterWebproperties include more than 150 Web sites and over 150 e-mailnewsletters that are viewed by over 20 million users and generate over350 million page views monthly.

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

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