SC 13E3/A

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13E-3
(AMENDMENT NO. 1)

Rule 13e-3 Transaction Statement
under Section 13(e) of the Securities Exchange Act of 1934

THE COBALT GROUP, INC.
(Name of the Issuer)

The Cobalt Group, Inc.; Cobalt Acquisition Corporation;
Warburg, Pincus Equity Partners, L.P.; Warburg, Pincus & Co.; Warburg Pincus LLC;
Joseph P. Landy; Ernest Pomerantz; and John W.P. Holt
(Name of Person(s) Filing Statement)

Common Stock, par value $0.01 per share
(Title of Class of Securities)

19074Q1031
(CUSIP Number of Class of Securities)

Scott A. Arenare, Esq.
Warburg Pincus LLC
466 Lexington Avenue
New York, New York 10017
(212) 878-0600
(Name, Address and Telephone Number of Person Authorized To Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)

Copies to:

Steven J. Gartner, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
(212) 728-8000

This statement is filed in connection with (check the appropriate box):

a.	/x/	The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934.
b.	/ /	The filing of a registration statement under the Securities Act of 1933.
c.	/ /	A tender offer.
d.	/ /	None of the above.

Check the following box if the solicitation materials or information statement referred to in checking box (a) are preliminary copies: /x/

Calculation of Filing Fee

Transaction Valuation*	Amount of Filing Fee
$38,430,833	$7,687.00

*

For purposes of calculating the filing fee only. This calculation assumes the purchase of 10,980,238 shares of common stock of The Cobalt Group, Inc. at $3.50 per share in cash. The amount of the filing fee, calculated in accordance with Regulation 240.0-11 promulgated under the Securities Exchange Act of 1934, as amended, equals 1/50 of one percent of the value of the maximum number of shares proposed to be purchased as described in the Proxy Statement.

   /x/  Check box if any part of the fee is offset as provided by Rule 0-11(a) (2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and date of its filing.

Amount Previously Paid: $7,687.00	Filing Party: The Cobalt Group, Inc.
Form or Registration No: Schedule 14A	Date Filed: June 28, 2001

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SCHEDULE 13E-3

    This Amendment No. 1 to the Rule 13e-3 Transaction Statement on Schedule 13E-3 (the "Transaction Statement"), filed pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended, relates to the Agreement and Plan of Merger (the "Merger Agreement"), dated as of June 2, 2001, between The Cobalt Group, Inc., a Washington corporation (the "Company"), and Cobalt Acquisition Corporation, a Washington corporation ("Merger Sub"). Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company, with the Company being the surviving corporation (the "Merger").

    The terms and conditions of the Merger Agreement are described in Amendment No. 1 to the Company's preliminary proxy statement (the "Amended Proxy Statement") filed herewith as Exhibit 99(a). A copy of the Merger Agreement is annexed to the Amended Proxy Statement as Appendix A thereto.

    Pursuant to General Instruction F to Schedule 13E-3, the information in the Company's 2001 Annual Proxy Statement filed by the Company on April 24, 2001, under the heading "Election of Directors" is hereby expressly incorporated by reference herein.

    This Transaction Statement is being jointly filed by the Company (the issuer of the class of equity securities that is the subject of the transaction), Merger Sub, Warburg, Pincus Equity Partners, L.P., a Delaware limited partnership and the sole shareholder of Merger Sub ("WPEP"), Warburg, Pincus & Co., the general partner of WPEP ("WP"), Warburg Pincus LLC, a New York limited liability company and the manager of WPEP ("WP LLC"), Joseph P. Landy, a general partner of WP, a member of WP LLC and a member of the Company's board of directors ("Landy"), Ernest Pomerantz, a member of the Company's board of directors ("Pomerantz") and John W.P. Holt, a member of the Company's board of directors and the Chief Executive Officer of the Company ("Holt" and, collectively with the Company, Merger Sub, WPEP, WP, WP LLC, Landy and Pomerantz, the "Filing Persons").

ITEM 1.  SUMMARY TERM SHEET

    The information contained in "Summary Term Sheet" and "Certain Questions and Answers About the Merger" in the Amended Proxy Statement is incorporated herein by reference.

ITEM 2.  SUBJECT COMPANY INFORMATION

    (a)  Name and address.  The information set forth in "Cover Page," "Summary Term Sheet" and "Participants—Parties to the Merger Agreement" in the Amended Proxy Statement is incorporated herein by reference.

    (b)  Securities.  The class of securities that is the subject of the transaction is the common stock, par value $0.01 per share, of the Company. As of June 2, 2001, there were 20,357,472 shares of common stock issued and outstanding.

    (c)  Trading market and price.  The information set forth in "Markets and Market Price" in the Amended Proxy Statement is incorporated herein by reference.

    (d)  Dividends.  The information set forth in "Markets and Market Price" in the Amended Proxy Statement is incorporated herein by reference.

    (e)  Prior public offerings.  The information set forth in "Markets and Market Price" in the Amended Proxy Statement is incorporated herein by reference.

    (f)  Prior stock purchases.  The information set forth in "Past Contracts, Transaction, Negotiations and Agreements" and "Common Stock Purchase Information" in the Amended Proxy Statement is incorporated herein by reference.

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ITEM 3.  IDENTITY AND BACKGROUND OF FILING PERSON.

    (a)  Name and address.  The information set forth in "Summary Term Sheet," "Participants," "Special Factors—Position of Merger Sub, Warburg Pincus and its Affiliates, Joseph P. Landy, John W.P. Holt, Ernest Pomerantz and Cobalt as to the Fairness of the Merger" and "Security Ownership of Certain Beneficial Owners and Management" in the Amended Proxy Statement and the information set forth in the Company's 2001 Annual Proxy Statement under the heading "Election of Directors" is incorporated by reference herein. The name and address of each general partner of WP and each member of WP LLC is set forth on Schedule I hereto. The name and address of each executive officer of Merger Sub is set forth on Schedule II hereto.

    (b)  Business and background of entities.  The information set forth in "Summary Term Sheet," "Participants" and "Security Ownership of Certain Beneficial Owners and Management" in the Amended Proxy Statement is incorporated herein by reference.

    (c)  Business and background of natural persons.  The information set forth in "Summary Term Sheet," "Participants," "Security Ownership of Certain Beneficial Owners and Management" in the Amended Proxy Statement and the information set forth in the Company's 2001 Annual Proxy Statement under the heading "Election of Directors" is incorporated by reference herein. The business background and other information required by Item 1003(c) of Regulation M-A of each general partner of WP and each member of WP LLC is set forth on Schedule I hereto. The business background and other information required by Item 1003(c) of Regulation M-A of each executive officer of Merger Sub is set forth on Schedule II hereto. None of the Filing Persons who are natural persons or, to the best of their knowledge, any executive officer, director or controlling person of the Company, Merger Sub, WPEP, WP or WP LLC has during the past five years (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining further violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation with respect to such laws. Except as set forth in Schedule I hereto, all Filing Persons who are natural persons and, to the best of their knowledge, any executive officer, director or controlling person of the Company, Merger Sub, WPEP, WP or WP LLC are United States citizens.

ITEM 4.  TERMS OF THE TRANSACTION

    (a)  Material terms.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger," "The Special Meeting," "Special Factors—Background of the Merger;—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger;—Position of Merger Sub, Warburg Pincus and its Affiliates, Joseph P. Landy, John W.P. Holt, Ernest Pomerantz and Cobalt as to the Fairness of the Merger,—Purpose and Reasons for the Merger;—Certain Effects of the Merger;—Interests of Cobalt Directors and Officers and Continuing Shareholders in the Merger," "Material U.S. Federal Income Tax Consequences of the Merger", "Terms of the Merger Agreement" and "Terms of the Voting Agreement and the Commitment Letter" in the Amended Proxy Statement is incorporated herein by reference.

    (c)  Different terms.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger,"—Certain Effects of the Merger;—Interests of Cobalt Directors and Officers and Continuing Shareholders in the Merger" and "Terms of the Merger Agreement" in the Amended Proxy Statement is incorporated herein by reference.

    (d)  Appraisal rights.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger" and "Dissenters' Rights" in the Amended Proxy Statement is incorporated herein by reference.

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    (e)  Provisions for unaffiliated security holders.  No provision has been made by the Filing Persons to grant unaffiliated security holders of the Company access to the corporate files of any of the Filing Persons and none of the Filing Persons intend to obtain counsel or appraisal services for such unaffiliated security holders at the expense of the Filing Persons.

    (f)  Eligibility for listing or trading.  Not applicable.

ITEM 5.  PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

    (a)  Transactions.  The information set forth in "Special Factors—Background of the Merger," "Interests of Cobalt Directors and Officers and Continuing Shareholders in the Merger" and "Past Contacts, Transactions, Negotiations and Agreements" in the Amended Proxy Statement is incorporated herein by reference.

    (b)  Significant corporate events.  The information set forth in "Special Factors—Background of the Merger;—Interests of Cobalt Directors and Officers and Continuing Shareholders in the Merger" and "Past Contacts, Transactions, Negotiations and Agreements" in the Amended Proxy Statement is incorporated herein by reference.

    (c)  Negotiations or contacts.  The information set forth in "Special Factors—Background of the Merger;—Interests of Cobalt Directors and Officers and Continuing Shareholders in the Merger" and "Past Contacts, Transactions, Negotiations and Agreements" in the Amended Proxy Statement is incorporated herein by reference.

    (e)  Agreements involving the subject company's securities.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger," "The Special Meeting—Record Date and Voting Information," "Special Factors—Background of the Merger;—Position of Merger Sub, Warburg Pincus and its Affiliates, Joseph P. Landy, John W.P. Holt, Ernest Pomerantz and Cobalt as to the Fairness of the Merger;—Interests of Cobalt Directors and Officers and Continuing Shareholders in the Merger," "Terms of the Merger Agreement," "Terms of the Voting Agreement and the Commitment Letter" and "Past Contacts, Transactions, Negotiations and Agreements" in the Amended Proxy Statement is incorporated herein by reference. The information set forth in Exhibits 99(d)(1) and 99(d)(2) hereto is incorporated herein by reference.

ITEM 6.  PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

    (b) Not applicable.

    (c)(1)-(8)  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger," "Special Factors—Certain Effects of the Merger" and "Terms of the Merger Agreement" in the Amended Proxy Statement is incorporated herein by reference.

ITEM 7.  PURPOSES, ALTERNATIVES, REASONS AND EFFECTS

    (a)  Purposes.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger" and "Special Factors—Background of the Merger;—Position of Merger Sub, Warburg Pincus and its Affiliates, Joseph P. Landy, John W.P. Holt, Ernest Pomerantz and Cobalt as to the Fairness of the Merger;—Purpose and Reason for the Merger;—Certain Effects of the Merger" in the Amended Proxy Statement is incorporated herein by reference.

    (b)  Alternatives.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger" and "Special Factors—Background of the Merger;—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger;—Position of Merger Sub, Warburg Pincus and its Affiliates, Joseph P. Landy, John W.P. Holt, Ernest Pomerantz and Cobalt as to the Fairness of the Merger" in the Amended Proxy Statement is incorporated herein by reference.

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    (c)  Reasons.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger" and "Special Factors—Background of the Merger;—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger;—Position of Merger Sub, Warburg Pincus and its Affiliates, Joseph P. Landy, John W.P. Holt, Ernest Pomerantz and Cobalt as to the Fairness of the Merger;—Opinion of SG Cowen;—Purpose and Reasons for the Merger" in the Amended Proxy Statement is incorporated herein by reference.

    (d)  Effects.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger," "Special Factors—Background of the Merger;—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger;—Position of Merger Sub, Warburg Pincus and its Affiliates, Joseph P. Landy, John W.P. Holt, Ernest Pomerantz and Cobalt as to the Fairness of the Merger;—Opinion of SG Cowen;—Certain Effects of the Merger," "Material Federal Income Tax Consequences," "Shareholder Litigation," "Dissenters' Rights" and "Terms of the Merger Agreement" in the Amended Proxy Statement is incorporated herein by reference.

ITEM 8.  FAIRNESS OF THE TRANSACTION

    (a)  Fairness.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger" and "Special Factors—Background of the Merger;—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger;—Position of Merger Sub, Warburg Pincus and its Affiliates, Joseph P. Landy, John W.P. Holt, Ernest Pomerantz and Cobalt as to the Fairness of the Merger;—Opinion of SG Cowen;—Interests of Cobalt Directors and Officers and Continuing Shareholders in the Merger" in the Amended Proxy Statement is incorporated herein by reference.

    (b)  Factors considered in determining fairness.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger" and "Special Factors—Background of the Merger;—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger;—Position of Merger Sub, Warburg Pincus and its Affiliates, Joseph P. Landy, John W.P. Holt, Ernest Pomerantz and Cobalt as to the Fairness of the Merger;—Opinion of SG Cowen;—Interests of Cobalt Directors and Officers and Continuing Shareholders in the Merger" in the Amended Proxy Statement is incorporated herein by reference.

    (c)  Approval of security holders.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger," "The Special Meeting," "Special Factors—Interests of Cobalt Directors and Officers and Continuing Shareholders in the Merger" and "Terms of the Voting Agreement and the Commitment Letter" in the Amended Proxy Statement is incorporated herein by reference.

    (d)  Unaffiliated representative.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger" and "Special Factors—Background of the Merger;—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger;—Position of Merger Sub, Warburg Pincus and its Affiliates, Joseph P. Landy, John W.P. Holt, Ernest Pomerantz and Cobalt as to the Fairness of the Merger;—Opinion of SG Cowen" in the Amended Proxy Statement is incorporated herein by reference.

    (e)  Approval of directors.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger" and "Special Factors—Background of the Merger;—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger;—Position of Merger Sub, Warburg Pincus and its Affiliates, Joseph P. Landy, John W.P. Holt, Ernest Pomerantz and Cobalt as to the Fairness of the Merger;—Opinion of SG Cowen" in the Amended Proxy Statement is incorporated herein by reference.

    (f)  Other offers.  Not applicable.

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ITEM 9.  REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS.

    (a)  Report, opinion or appraisal.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger" and "Special Factors—Background of the Merger;—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger;—Opinion of SG Cowen" in the Amended Proxy Statement is incorporated herein by reference.

    (b)  Preparer and summary of the report, opinion or appraisal.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger" and "Special Factors—Background of the Merger;—Opinion of SG Cowen" in the Amended Proxy Statement is incorporated herein by reference and Appendix B—Opinion of SG Cowen Securities Corporation in the Amended Proxy Statement is incorporated herein by reference. The information set forth in Exhibits 99.(c)(2) and 99.(c)(3) hereto is incorporated herein by reference.

    (c)  Availability of documents.  The opinion of SG Cowen Securities Corporation, the preliminary discussion materials presented by SG Cowen Securities Corporation to the special committee on May 18, 2001 and the materials presented by SG Cowen Securities Corporation to the special committee on June 2, 2001 shall also be made available for inspection and copying during regular business hours at the principal executive offices of the Company by any interested holder of common stock or by the representative of any such holder who has been so designated in writing upon written request and at the expense of the requesting securityholder.

ITEM 10.  SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION

    (a)  Source of funds.  The information set forth in "Special Factors—Merger Financing" and "Estimated Fees and Expenses of the Merger" in the Amended Proxy Statement is incorporated herein by reference.

    (b)  Conditions.  The information set forth in "Special Factors—Merger Financing" and "Estimated Fees and Expenses of the Merger" in the Amended Proxy Statement is incorporated herein by reference.

    (c)  Expenses.  The information set forth in "Special Factors—Merger Financing" and "Estimated Fees and Expenses of the Merger" in the Amended Proxy Statement is incorporated herein by reference.

    (d)  Borrowed funds.  Not applicable.

ITEM 11.  INTEREST IN SECURITIES OF THE SUBJECT COMPANY

    (a)  Securities ownership.  The information set forth in "Summary Term Sheet" and "Security Ownership of Certain Beneficial Owners and Management" in the Amended Proxy Statement is incorporated herein by reference.

    (b)  Securities transactions.  The information set forth in "Summary Term Sheet," "Common Stock Purchase Information" and "Security Ownership of Certain Beneficial Owners and Management" in the Amended Proxy Statement is incorporated herein by reference.

ITEM 12.  THE SOLICITATION OR RECOMMENDATION

    (d)  Intent to tender or vote in a going private transaction.  The information set forth in "Summary Term Sheet," "The Special Meeting," "Special Factors—Background of the Merger;—Position of Merger Sub, Warburg Pincus and its Affiliates, Joseph P. Landy, John W.P. Holt, Ernest Pomerantz and Cobalt as to the Fairness of the Merger;—Interests of Cobalt Directors and Officers and Continuing Shareholders in the Merger" and "Terms of the Voting Agreement and the Commitment Letter" in the

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Amended Proxy Statement is incorporated herein by reference. The information set forth in Exhibit 99(d)(2) hereto is incorporated herein by reference.

    (e)  Recommendation of others.  The information set forth in "Summary Term Sheet" and "Interests of Cobalt Directors and Officers and Continuing Shareholders in the Merger" in the Amended Proxy Statement is incorporated herein by reference.

ITEM 13.  FINANCIAL STATEMENTS

    (a)  Financial information.  The information set forth in "Selected Historical Financial Data", "Selected Financial Information", "Per Share Data", "Cobalt Management's Discussion and Analysis of Financial Condition and Results of Operations", "Risks Relating to the Proposed Merger and our Business" and "Where Shareholders Can Find More Information" in the Amended Proxy Statement is incorporated herein by reference.

    (b)  Pro forma information.  Not applicable.

ITEM 14.  PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED

    (a)  Solicitations or recommendations.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger" and "The Special Meeting" in the Amended Proxy Statement is incorporated herein by reference.

    (b)  Employees and corporate assets.  The information set forth in "Summary Term Sheet," "Certain Questions and Answers About the Merger" and "The Special Meeting" in the Amended Proxy Statement is incorporated herein by reference.

ITEM 15.  ADDITIONAL INFORMATION

    The information set forth in the Amended Proxy Statement and the Appendices thereto, in the Company's 2001 Annual Proxy Statement under the heading "Election of Directors" is incorporated herein by reference in its entirety.

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ITEM 16.  EXHIBITS

99(a)	Amendment No. 1 to the Preliminary Proxy Statement for the Special Meeting of Shareholders of The Cobalt Group, Inc.
99.(c)(1)	Opinion of SG Cowen Securities Corporation, dated June 2, 2001(*)
99.(c)(2)	Preliminary discussion materials presented by SG Cowen Securities Corporation to the Cobalt Special Committee on May 18, 2001
99.(c)(3)	Materials presented by SG Cowen Securities Corporation to the Cobalt Special Committee on June 2, 2001
99.(d)(1)	Voting Agreement, dated June 2, 2001, by and among Warburg, Pincus Equity Partners, L.P. and John W.P. Holt(**)
99.(d)(2)	Agreement and Plan of Merger by and between The Cobalt Group, Inc. and Cobalt Acquisition Corporation dated as of June 2, 2001(*)
99(d)(3)	Commitment Letter, dated June 2, 2001, from Warburg, Pincus Equity Partners, L.P. and certain affiliates to The Cobalt Group, Inc.(**)
99.(f)	Dissenters' Rights under Chapter 13 of the Washington Business Corporation Act (RCW 23B.13).(*)

(*)

Incorporated by reference from the initial preliminary proxy statement, filed by the Company on June 29, 2001.

(**)

Incorporated by reference from the Schedule 13D filed by Warburg, Pincus Equity Partners, L.P. and certain affiliates on June 5, 2001.

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    After due inquiry and to the best of my knowledge and belief, I certify that the information in this statement is true, complete and correct.

Dated: August 15, 2001

THE COBALT GROUP, INC.
By:	/s/ JOHN W.P. HOLT Name: John W.P. Holt Title:  President and Chief Executive Officer
COBALT ACQUISITION CORPORATION
By:	/s/ GREGORY BACK Name: Gregory Back Title:  Vice President and Secretary
WARBURG, PINCUS EQUITY PARTNERS, L.P.
By:	Warburg, Pincus & Co., General Partner
By:	/s/ GREGORY BACK Name: Gregory Back Title:  Partner
WARBURG, PINCUS & CO.
By:	/s/ GREGORY BACK Name: Gregory Back Title:  Partner

WARBURG PINCUS LLC
By:	/s/ GREGORY BACK Name: Gregory Back Title:  Member
	/s/ JOHN W.P. HOLT John W. P. Holt
	/s/ JOSEPH P. LANDY Joseph P. Landy
	/s/ ERNEST POMERANTZ Ernest Pomerantz

Schedule I

    Set forth below is the name, position and present principal occupation of each of the general partners of Warburg, Pincus & Co. ("WP") and members of Warburg Pincus LLC ("WP LLC"). Unless otherwise indicated, each general partner or member, as applicable, has held such position for the last five years. The sole general partner of Warburg, Pincus Equity Partners, L.P. ("WPEP") is WP. Except as otherwise indicated, the business address of each of such persons is 466 Lexington Avenue, New York, New York 10017. Except as otherwise indicated, each person listed below is a citizen of the United States.

GENERAL PARTNERS OF WP

NAME	CURRENT PRINCIPAL OCCUPATION AND MATERIAL OCCUPATIONS DURING THE PAST FIVE YEARS
Joel Ackerman	Partner of WP; Member and Managing Director of WP LLC
Gregory Back	Partner of WP; Member and Managing Director of WP LLC; Vice President and Secretary of Merger Sub; prior to 1999, Mr. Back was employed by McKinsey & Company
David Barr	Partner of WP; Member and Managing Director of WP LLC; prior to 2000, Mr. Barr was a Managing Director of Butler Capital and was employed by Goldman, Sachs & Co.
Harold Brown	Partner of WP; Member and Managing Director of WP LLC
Sean D. Carney	Partner of WP; Member and Managing Director of WP LLC
Timothy J. Curt	Partner of WP; Member and Managing Director of WP LLC; prior to 1998, Mr. Curt was a tax partner in the accounting firm of Ernst & Young LLP and a member of its Mergers & Acquisitions Services Group
W. Bowman Cutter	Partner of WP; Member and Managing Director of WP LLC
Cary J. Davis	Partner of WP; Member and Managing Director of WP LLC
Stephen Distler	Partner of WP; Member and Managing Director of WP LLC
Stewart K. P. Gross	Partner of WP; Member and Senior Managing Director of WP LLC
Patrick T. Hackett	Partner of WP; Member and Managing Director of WP LLC
Jeffrey A. Harris	Partner of WP; Member and Senior Managing Director of WP LLC
William H. Janeway	Partner of WP; Member and Vice Chairman of WP LLC
Charles R. Kaye	Partner of WP; Member and Executive Managing Director of WP LLC

Henry Kressel	Partner of WP; Member and Senior Managing Director of WP LLC
Joseph P. Landy	Partner of WP; Member and Executive Managing Director of WP LLC; President and Treasurer of Merger Sub
Sidney Lapidus	Partner of WP; Member and Managing Director of WP LLC
Kewsong Lee	Partner of WP; Member and Managing Director of WP LLC
Jonathan S. Leff	Partner of WP; Member and Managing Director of WP LLC
Reuben S. Leibowitz	Partner of WP; Member and Managing Director of WP LLC
David E. Libowitz	Partner of WP; Member and Managing Director of WP LLC
Nancy Martin	Partner of WP; Member and Managing Director of WP LLC; prior to 1999, Dr. Martin was Vice President of Research and Development of MCI Systemhouse, Executive Director of Advanced Technology for Melville Corporation and a partner of Coopers & Lybrand where she directed advanced technology nationally. In addition, Dr. Martin was the founder and Chief Executive Officer of SoftPert Systems, founding professor of Software Engineering at Wang Institute of Graduate Studies and Visiting Professor at Stanford University.
Edward J. McKinley	Partner of WP; Member and Managing Director of WP LLC; President of Warburg Pincus International LLC
Rodman W. Moorhead III	Partner of WP; Member and Managing Director of WP LLC
James Neary	Partner of WP; Member and Managing Director of WP LLC; prior to 2000, Mr. Neary was a Managing Director of Chase Securities and was employed by Credit Suisse First Boston
Howard H. Newman	Partner of WP; Member and Vice Chairman of WP LLC
Gary D. Nusbaum	Partner of WP; Member and Managing Director of WP LLC
Dalip Pathak	Partner of WP; Member and Managing Director of WP LLC
Lionel I. Pincus	Managing Partner of WP; Managing Member, Chairman and Chief Executive Officer of WP LLC

John D. Santoleri	Partner of WP; Member and Managing Director of WP LLC
Steven G. Schneider	Partner of WP; Member and Managing Director of WP LLC; prior to 1997, Mr. Schneider was a Managing Director with NationsBank Capital Markets, Inc.
Barry Taylor	Partner of WP; Member and Managing Director of WP LLC; prior to 2000, Mr. Taylor was employed by the law firm of Wilson Sonsini Goodrich and Rosati
John L. Vogelstein	Partner of WP; Member, President and Vice Chairman of WP LLC
Elizabeth H. Weatherman	Partner of WP; Member and Managing Director of WP LLC
David Wenstrup	Partner of WP; Member and Managing Director of WP LLC; prior to 1997, Mr. Wenstrup was employed by the Boston Consulting Group

MEMBERS OF WP LLC

NAME	CURRENT PRINCIPAL OCCUPATION AND MATERIAL OCCUPATIONS DURING THE PAST FIVE YEARS
Joel Ackerman	Member and Managing Director of WP LLC; Partner of WP
Gregory Back	Member and Managing Director of WP LLC, Partner of WP; Vice President and Secretary of Merger Sub; prior to 1999, Mr. Back was employed by McKinsey & Company
David Barr	Member and Managing Director of WP LLC, Partner of WP; prior to 2000, Mr. Barr was a Managing Director of Butler Capital and was employed by Goldman, Sachs & Co.
Frank M. Brochin(1)	Member and Managing Director of WP LLC
Harold Brown	Member and Managing Director of WP LLC; Partner of WP
Sean D. Carney	Member and Managing Director of WP LLC, Partner of WP
Timothy J. Curt	Member and Managing Director of WP LLC, Partner of WP; prior to 1998, Mr. Curt was a tax partner in the accounting firm of Ernst & Young LLP and a member of its Mergers & Acquisitions Services Group
W. Bowman Cutter	Member and Managing Director of WP LLC; Partner of WP
Cary J. Davis	Member and Managing Director of WP LLC; Partner of WP
Stephen Distler	Member and Managing Director of WP LLC; Partner of WP
Tetsuya Fukagawa(2)	Member and Managing Director of WP LLC; prior to 1999, Mr. Fukagawa was employed by J.P. Morgan (New York and Tokyo), McKinsey & Company, Inc. (Tokyo), and Mitsubishi Bank (Tokyo)
Makoto Fukuhara(2)	Member and Managing Director of WP LLC; prior to 1999, Mr. Fukuhara was employed by Credit Suisse First Boston
Stewart K. P. Gross	Member and Senior Managing Director of WP LLC; Partner of WP
Alf Grunwald(3)	Member and Managing Director of WP LLC; prior to 2000, Mr. Grunwald was President and Chief Executive Officer of Deloitte and Touche Consulting Group-ICS and Vice President of Sales and Marketing of SAP Canada
Patrick T. Hackett	Member and Managing Director of WP LLC; Partner of WP
Jeffrey A. Harris	Member and Senior Managing Director of WP LLC; Partner of WP

Sung-Jin Hwang(4)	Member and Managing Director of WP LLC; prior to 1999, Mr. Hwang was employed with the Investment Banking Division of Credit Suisse First Boston and was an associate of the law firms of Sullivan & Cromwell and Kim & Chang
Roberto Italia(5)	Member and Managing Director of WP LLC
William H. Janeway	Member and Vice Chairman of WP LLC; Partner of WP
Charles R. Kaye	Member and Executive Managing Director of WP LLC; Partner of WP
Rajesh Khanna(6)	Member and Managing Director of WP LLC
Henry Kressel	Member and Senior Managing Director of WP LLC; Partner of WP
Rajiv B. Lall(6)	Member and Managing Director of WP LLC; prior to 1997, Mr. Lall was an Executive Director of Morgan Stanley (Asian Economic Research)
Joseph P. Landy	Member and Executive Managing Director of WP LLC; Partner of WP; President and Treasurer of Merger Sub
Sidney Lapidus	Member and Managing Director of WP LLC; Partner of WP
Kewsong Lee	Member and Managing Director of WP LLC; Partner of WP
Jonathan S. Leff	Member and Managing Director of WP LLC; Partner of WP
Reuben S. Leibowitz	Member and Managing Director of WP LLC; Partner of WP
David E. Libowitz	Member and Managing Director of WP LLC; Partner of WP
Nicholas J. Lowcock(7)	Member and Managing Director of WP LLC
John W. MacIntosh(8)	Member and Managing Director of WP LLC
Nancy Martin	Member and Managing Director of WP LLC; Partner of WP; prior to 1999, Dr. Martin was Vice President of Research and Development of MCI Systemhouse, Executive Director of Advanced Technology for Melville Corporation and a partner of Coopers & Lybrand where she directed advanced technology nationally. In addition, Dr. Martin was the founder and Chief Executive Officer of SoftPert Systems, founding professor of Software Engineering at Wang Institute of Graduate Studies and Visiting Professor at Stanford University.
Edward J. McKinley	Member and Managing Director of WP LLC; Partner of WP; President of Warburg Pincus International LLC

Rodman W. Moorhead III	Member and Managing Director of WP LLC; Partner of WP
James Neary	Member and Managing Director of WP LLC; Partner of WP; prior to 2000, Mr. Neary was a Managing Director of Chase Securities and was employed by Credit Suisse First Boston
Howard H. Newman	Member and Vice Chairman of WP LLC; Partner of WP
Gary D. Nusbaum	Member and Managing Director of WP LLC; Partner of WP
Dalip Pathak	Member and Managing Director of WP LLC; Partner of WP
Lionel I. Pincus	Managing Member, Chairman and Chief Executive Officer of WP LLC; Managing Partner of WP
Pulak Chandan Prasad(6)	Member and Managing Director of WP LLC; prior to 1998, Mr. Prasad was a management consultant with McKinsey & Company (United States, India and South Africa)
John D. Santoleri	Member and Managing Director of WP LLC; Partner of WP; prior to 1997, Mr. Schneider was a Managing Director with NationsBank Capital Markets, Inc.
Steven G. Schneider	Member and Managing Director of WP LLC; Partner of WP
Melchior Stahl(3)	Member and Managing Director of WP LLC; prior to 1999, Mr. Stahl was a Managin Director of Goldman, Sachs & Co. (Frankfurt and London), First Boston (New York) and Booz Allan & Hamilton GmbH (Dusseldorf)
Chang Q. Sun(9)	Member and Managing Director of WP LLC
Barry Taylor	Member and Managing Director of WP LLC, Partner of WP; prior to 2000, Mr. Taylor was employed by the law firm of Wilson Sonsini Goodrich and Rosati
John L. Vogelstein	Member, President and Vice Chairman of WP LLC; Partner of WP
Elizabeth H. Weatherman	Member and Managing Director of WP LLC; Partner of WP
David Wenstrup	Member and Managing Director of WP LLC; Partner of WP; prior to 1997, Mr. Wenstrup was employed by the Boston Consulting Group
Jeremy S. Young(7)	Member and Managing Director of WP LLC

(1)

Citizen of France

(2)

Citizen of Japan

(3)

Citizen of Germany

(4)

Citizen of Korea

(5)

Citizen of Italy

(6)

Citizen of India

(7)

Citizen of United Kingdom

(8)

Citizen of Canada

(9)

Citizen of China

Schedule II

    Set forth below is the name, position, present principal occupation and material occupations during the last five years of each of the executive officers of Cobalt Acquisition Corporation ("Merger Sub"). Merger Sub is a wholly-owned subsidiary of Warburg, Pincus Equity Partners, L.P. ("WPEP"). The business address of each of such persons is 466 Lexington Avenue, New York, New York 10017. Each of the persons listed below is a citizen of the United States.

EXECUTIVE OFFICERS OF MERGER SUB

NAME	CURRENT PRINCIPAL OCCUPATION AND MATERIAL OCCUPATIONS DURING THE PAST FIVE YEARS
Joseph P. Landy	Partner of WP; Member and Executive Managing Director of WP LLC; President, Treasurer and director of Merger Sub
Gregory Back	Partner of WP; Member and Managing Director of WP LLC; Vice President and Secretary of Merger Sub; prior to 1999, Mr. Back was employed by McKinsey & Company
Maya Chorengel	Vice President of WP LLC; Assistant Vice President of Merger Sub; prior to 1997, Ms. Chorengel was employed by Morgan Stanley and James D. Wolfensohn

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Schedule II

EX-99.(C)(2)

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CONFIDENTIAL

PRELIMINARY

PROJECT COLORS

Preliminary Discussion Materials

May 18, 2001

SG Cowen

INTRODUCTION

    The following materials, including the information on specific companies and transactions, are preliminary and for use solely by the Special Committee of the Board of Directors of Colors for discussion purposes only. These materials are not meant to suggest or assign any value to any company. These materials are confidential and shall not be reproduced or provided to any third party except with the express written consent of SG Cowen Securities Corporation.

TRADING MULTIPLES OF SELECTED COMPANIES
Trading Multiples of Selected Companies
(US$ in millions, except per share data)

										Enterprise Value as a Multiple of (b)(c)(d)
										Revenues						Price/Earnings(c)(d)
Company (FYE)	Stock Price(a)		% of 52 Week High(a)		Market Value		Enterprise Value(b)															Estimated 5 yr EPS Growth(e)
										LTM		CY01E		CY02P		LTM		CY01E		CY02P
ASPs
Corio, Inc. (12/31)	$	1.08	5.0	%	$	56.9	$	(50.6	)	(0.98	)x	(0.78	)x	(0.44	)x	NM		NM		NM		20.0	%
Interliant, Inc. (12/31)		1.30	4.5			87.1		216.6		1.27		1.06		0.67		NM		NM		NM		32.5
NaviSite, Inc. (7/31)		1.96	3.3			116.7		48.0		0.54		0.11		NM		NM		NM		NM		122.9
eCRM
Chordiant Software Inc. (12/31)		3.05	16.0			161.0		82.8		1.98		1.15		0.80		NM		NM		NM		45.0
FirePond, Inc. ( 10/31)		1.93	4.5			69.4		(31.5	)	(0.49	)	(0.41	)	NM		NM		NM		NM		62.5
Onyx Software (12/31)		4.96	15.4			213.4		182.6		1.44		1.32		0.93		NM		NM		62.0	x	41.0
B2B
Onvia.com, Inc. (12/31)	$	0.89	7.5	%	$	80.9	$	(30.7	)	(0.22	)x	(1.36	)x	(0.87	)x	NM		NM		NM		100.0	%
PurchasePro.com (12/31)		2.53	5.3			173.8		150.7		1.67		0.92		0.63		NM		84.3	x	9.0	x	NM
VerticalNet, Inc. (12/31)		2.74	4.3			268.6		202.5		1.49		0.90		0.54		NM		NM		NM		35.0
Transportation
Autobytel.com (12/31)	$	1.37	16.0	%	$	27.9	($	39.6	)	(0.58	)x	(0.51	)x	NM		NM		NM		NM		20.0	%
CCC Information Services Group (12/31)		9.75	70.9			215.1		257.4		1.23		1.22		NM		NM		NM		NM		NM
PartsBase.com (12/31)		1.03	11.8			14.8		(12.3	)	(2.39	)	(1.76	)	(0.95	)x	NM		NM		NM		NM
The Reynolds and Reynolds Co. (9/30)		22.15	82.2			1,667.1		1,856.7		1.92		1.78		NM		17.7	x	16.2	x	NM		NM
High			82.2	%						1.98	x	1.78	x	0.93	x	17.7	x	84.3	x	62.0	x	122.9	%
Median			7.5							1.23	x	0.90	x	0.59	x	17.7	x	50.3	x	35.5	x	41.0	%
Mean			19.0							0.53		0.28		0.16		17.7		50.3		35.5		53.2
Low			3.3							(2.39	)	(1.76	)	(0.95	)	17.7		16.2		9.0		20.0

(a)

Stock price data as of May 15, 2001.

(b)

Enterprise Value defined as Market Value plus Total Debt less Cash.

(c)

LTM as of last reported quarter.

(d)

Estimates are calendar year end per First Call where available, otherwise IBES.

(e)

Five-Year Growth Rate Estimates are from First Call where available; otherwise IBES, Zacks or S&P Earnings Report.

OPERATING STATISTICS OF SELECTED COMPANIES
Operating Statistics of Selected Companies
(US$ in millions, except per share data)

			Operating Results(a)(b)(c)
			Revenues									Margins				EPS(a)(b)(c)
Company (FYE)	Revenue Growth Rate CY/CY+1																														Book Value(d)
			LTM		CY01E		CY02P		LTM EBIT			Gross		EBIT		LTM			CY01E			CY02P			Cash(d)		STD(d)		LTD(d)					Debt/Cap.
ASPs
Corio, Inc. (12/31)	76.6	%	$	51.9	$	64.6	$	114.0	($	82.5	)	(23.1)	%	(159.1)	%	($	1.65	)	($	1.68	)	($	1.15	)	$	117.1	$	0.0	$	9.6	$	137.8		6.5	%
Interliant, Inc. (12/31)	58.8			170.8		204.0		324.0		(98.4	)	27.3		(57.6	)		(2.12	)		(3.26	)		(2.63	)		68.1		14.1		183.6		29.3		87.1
NaviSite, Inc. (7/31)	NM			88.5		454.8		NA		(90.2	)	(27.7	)	(102.0	)		(1.87	)		(1.64	)		NA			68.7		0.0		0.0		57.2		0.0
eCRM
Chordiant Software, Inc. (13/31)	43.5			41.7		72.3		103.7		(26.6	)	51.1		(63.7	)		(0.59	)		(0.51	)		(0.06	)		78.7		0.5		0.0		94.8		0.5
FirePond, Inc. (10/31)	NM			64.5		77.3		NA		(18.4	)	56.6		(28.6	)		(0.36	)		(0.73	)		NA			101.2		0.3		0.0		104.4		0.3
Onyx Software (12/31)	41.9			126.7		138.6		196.7		(11.1	)	74.3		(8.8	)		(0.29	)		(0.56	)		0.08			36.4		1.2		4.3		83.4		6.2
B2B
Onvia.com, Inc. (12/31)	57.1	%	$	137.9	$	22.5	$	35.3	($	102.8	)	(1.5)	%	(74.6)	%	($	1.03	)	($	0.53	)	($	0.26	)	$	118.6	$	4.8	$	2.2	$	163.2		4.1	%
PurchasePro.com (12/31)	45.8			90.2		163.1		237.7		(9.5	)	93.0		(10.6	)		(0.08	)		0.03			0.28			54.9		24.7		7.2		263.7		10.8
VerticalNet, Inc. (12/31)	67.8			136.3		224.1		376.0		(113.4	)	36.1		(83.2	)		(1.29	)		(0.68	)		(0.01	)		107.3		2.1		39.1		647.5		6.0
Transportation
Autobytel.com (12/31)	NM		$	68.1	$	78.0		NA	($	30.1	)	NM		(44.2)	%	($	1.17	)	($	0.28	)		NA		$	76.2	$	0.0	$	8.8	$	86.2		9.3	%
CCC Information Services Group (12/31)	NM			209.5		210.5		NA		(3.5	)	64.5	%	(1.7	)		(1.10	)		(0.34	)		NA			11.6		0.4		53.4		(5.5	)	NM
PartsBase.com (12/31)	85.7	%		5.1		7.0	$	13.0		(11.0	)	(21.1	)	(213.4	)		(0.60	)		(0.72	)	($	0.54	)		27.1		0.0		0.0		30.3		0.0
The Reynolds and Reynolds Co. (9/30)	NM			967.4		1,041.9		NA		158.8		58.5		16.4			1.25			1.37			NA			134.0		211.6		112.1		467.1		40.9
High	85.7	%										93.0	%	16.4	%																			87.1	%
Median	57.9	%										43.6	%	(57.6)	%																			6.1	%
Mean	59.6											32.3		(63.9	)																			14.3
Low	41.9											(27.7	)	(213.4	)																			0.0

(a)

EBIT, net income and earnings per share before extraordinary item(s) and cumulative effect of accounting change.

(b)

LTM as of last reported quarter.

(c)

Estimates are calendar year end per First Call where available, otherwise IBES.

(d)

Book Value, Total Debt and Cash as of last reported quarter.

SELECTED TRANSACTION STATISTICS^(a)
Selected Transaction Statistics
(US$ in millions)

								Total Consideration as a Multiple of:						Premiums Paid to Market(a)
Announce Date	Closing Date	Acquiring Company/ Target Company	Equity Value		Enterprise Value			LTM Revenue		LQA Revenue		FY+1 Revenue		4 Weeks Prior		One Day Prior
4/11/01	Pending	Autobytel.com Inc.  Autoweb.com, Inc.	$	15.6	$	2.6		0.06	x	0.07	x	NA		69.4	%	82.6	%
4/9/01	Pending	Kana Communications, Inc.  Broadbase Software, Inc.		87.1		(45.1	)	(0.82	)	(0.86	)	(0.78)	x	(55.1	%)	27.8	%
4/9/01	Pending	General Electric  NBCi		86.1		244.8		1.99		1.97		2.76		24.0	%	46.0	%
1/8/01	3/27/01	Chordiant Software Inc.  Prime Response Inc.		34.2		2.2		0.07		0.08		NA		(5.7	%)	(2.4	%)
12/20/00	4/12/01	Vitamin Shoppe Industries Inc.  VitaminShoppe.com, Inc.		20.4		18.6		0.54		0.48		0.27		113.3	%	220.0	%
12/11/00	1/22/01	Bosch Security Systems Corp.  Detection Systems, Inc.		121.1		139.0		1.00		0.98		NA		46.9	%	38.5	%
10/25/00	11/29/00	Telelogic AB  Continuus Software Corp.		41.5		41.8		1.03		0.95		0.60		90.9	%	28.7	%
10/25/00	12/21/00	Trilogy Software, Inc.  pcOrder.com, Inc.		105.5		32.9		0.56		0.61		0.60		55.7	%	85.5	%
6/27/00	9/29/00	Integrated Defense Technologies, Inc.  Tech-Sym		183.0		151.1		0.89		0.84		NA		36.4	%	25.0	%
4/27/00	9/1/00	Allen Systems Group, Inc.  Viasoft, Inc.		157.4		69.1		1.00		1.54		1.10		26.8	%	52.7	%
		High	$	183.0	$	244.8		1.99	x	1.97	x	2.76	x	113.3	%	220.0	%
		Median		86.6		37.3		0.73		0.73		0.60		41.7	%	42.2	%
		Mean		85.2		65.7		0.63		0.67		0.76		40.3	%	60.4	%
		Low		15.6		(45.1	)	(0.82	)	(0.86	)	(0.78	)	(55.1	%)	(2.4	%)

(a)

As per Press Releases and SEC filings of either Target or Acquiror.

PREMIUMS PAID IN RECENT PRIVATIZATION TRANSACTIONS^(a)

Recent Privatization Premiums Paid
(US$ in millions)

								Premium
Ann. Date	Eff. Date	Target Name	Acquiror Name	Trans. Val.		Ent. Val.		1 day		1 week		4 weeks
12/20/2000	04/12/2001	Vitaminshoppe.com Inc.	Vitamin Shoppe Industries Inc.	$	7.3	$	13.0	220.0	%	113.3	%	166.7	%
12/19/2000	01/31/2001	Loislaw.com Inc.	Wolters Kluwer NV		92.9		84.4	190.3		322.3		298.1
10/25/2000	12/22/2000	pcOrder.com	Trilogy Software Inc.		48.3		48.5	85.5		108.2		55.7
10/25/2000	12/29/2000	Axcelis Technologies(Eaton)	Shareholders		696.8		689.0
10/01/2000		Detection Systems Inc.	Robert Bosch GmbH		117.5		135.4	95.9		93.9		97.3
08/11/2000	10/06/2000	BI Inc.	Investor Group		67.4		72.3	78.4		106.3		65.0
07/17/2000	08/24/2000	CareerBuilder Inc.	Investor Group		199.3		134.7	93.9		106.5		169.5
06/27/2000	09/29/2000	Tech-Sym Corp.	Integrated Defense Tech		93.0		154.3	25.0		23.7		36.4
06/08/2000	07/07/2000	PFSweb Inc.	Shareholders		60.8		NA
05/25/2000	08/01/2000	Neoforma.com Inc.	Investor Group		630.0		NA
04/27/2000	09/01/2000	VIASOFT Inc.	Allen Systems Group		157.4		119.2	52.7		46.1		29.9
03/06/2000	04/25/2000	Data Transmission Network Corp.	Veronis Suhler & Assoc Commun		467.1		477.3	16.0		16.6		52.6
02/25/2000	04/13/2000	Spanlink Communications Inc.	Spanlink Acquisition Group		69.5		69.3	NM		6.3		47.4
02/19/2000	02/19/2000	Diehl Graphsoft Inc.	Nemetschek AG		29.5		28.3	33.3		52.0		94.9
02/14/2000	03/29/2000	GRC International Inc.	AT&T Corp.		218.9		217.6	12.2		16.5		18.8
01/31/2000	05/12/2000	ThermoQuest Corp.	Thermo Instrument Systems Inc.		96.9		902.2
01/31/2000	05/03/2000	Metrika Systems Corp.	Thermo Instrument Systems Inc.		14.2		81.2
01/31/2000	04/13/2000	ONIX Systems Inc.	Thermo Instrument Systems Inc.		23.1		128.8
01/31/2000	04/04/2000	Thermo Sentron Inc. (Thermedics)	Thermedics (Thermo Electron)		30.7		153.5	7.4		6.9		6.9
12/21/1999	02/03/2000	Micro Warehouse Inc.	Investor Group		679.9		543.4	24.6		51.2		47.6
12/03/1999	03/23/2000	Analogy Inc.	Avant Corp.		24.3		25.0	32.3		24.0		16.7
11/15/1999	03/08/2000	n-Vision Inc.	ATS Acquisitions Inc.		1.3		NA
11/12/1999	02/09/2000	Vertex Communications Corp.	TriPoint Global Communications		116.0		102.5	48.5		37.5		71.7
10/26/1999	01/31/2000	Watkins-Johnson Co.	Fox Paine & Co LLC		319.0		334.0	30.0		29.0		24.6
10/21/1999	12/22/1999	Premisys Communications Inc.	Zhone Technologies Inc.		249.9		243.6	12.7		23.1		22.1
10/19/1999	12/10/1999	TeleSciences Inc.	EDB AS		17.3		21.8
08/24/1999	02/02/2000	Aavid Thermal Technologies Inc.	Willis Stein & Partners LP		264.1		245.5	29.1		23.3		28.7
07/28/1999	10/19/1999	Kofax Image Products	Investor Group	$	70.7	$	42.5	36.0	%	30.8	%	30.8	%
07/07/1999	08/31/1999	Smartflex Systems	Saturn Electronics		69.1		90.1	108.7		217.0		205.5
06/24/1999	12/22/1999	Lasergate Systems Inc.	Tickets.com		1.5		NA
05/21/1999	12/10/1999	ThermoSpectra (Thermo Instr)	Thermo Instrument Systems Inc.		26.1		298.2	39.1	%	43.8	%	61.0	%
05/18/1999	08/16/1999	Varlen Corp.	AMSTED Industries Inc.		784.8		817.1	61.9		50.0		68.4
05/14/1999	10/29/1999	Kentek Information Systems Inc.	Investor Group		42.1		29.8	8.7		8.7		18.4
05/14/1999	09/02/1999	WesTower Corp.	SpectraSite Holdings Inc.		330.0		NA
05/12/1999	06/21/1999	Optek Technology Inc.	Dyson-Kissner-Moran Corp.		202.6		184.6	29.9		47.8		81.3
05/07/1999	09/29/1999	Instron Corp.	Kirtland Capital Partners		159.9		180.0	36.4		29.4		31.3
05/05/1999	09/17/1999	Enterprise Software Inc.	LiveWire Ventures LLC		74.0		69.2	23.3		25.4		49.5
05/03/1999	08/24/1999	Cellular Commun of Puerto Rico	Investor Group		867.8		850.6	24.2		12.9		7.3
04/05/1999	07/22/1999	BancTec Inc.	Welsh Carson Anderson & Stowe		535.5		497.6	42.3		33.9		28.1
03/29/1999	12/31/1999	Logitek Inc.	North Atlantic Instruments Inc.		3.3		NA
03/15/1999	05/30/1999	Haskel International Inc.	Investor Group		65.4		52.8	42.3		49.6		51.8
03/08/1999	06/24/1999	Analysis & Technology Inc.	Anteon Corp.		108.5		115.3	18.9		16.2		23.8
02/17/1999	08/06/1999	Equitrac Corp.	Investor Group		81.5		78.8	4.3		5.7		15.9
02/17/1999	07/09/1999	Precision Systems Inc.	Anshutz Digital Media Inc.		20.2		27.2	NM		NM		NM
			High					220.0	%	322.3	%	298.1	%
			Median					33.3	%	32.4	%	47.5	%
			Mean					50.5	%	55.6	%	63.2	%
			Low					4.3	%	5.7	%	6.9	%

(a)

Source: SDC.

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PRELIMINARY PROJECT COLORS Preliminary Discussion Materials May 18, 2001 SG Cowen

EX-99.(C)(3)

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CONFIDENTIAL

Project Colors

Presentation to the Special Committee
of the Board of Directors

June 2, 2001

INTRODUCTION

    The following materials were prepared solely for discussion at the meeting of the Special Committee of the Board of Directors of Blue ("Company") scheduled for June 2, 2001.

In preparing this presentation, we have, with your consent, relied upon information provided by the Company and other publicly available information. We have not independently verified any of such information, and have relied on it being complete and accurate in all material respects.

Please note that this presentation is based on the business and operations of Blue as represented to us as of the date hereof and does not purport to take into consideration any information or events arising subsequent to such date. SG Cowen makes no representation or warranty that there has been no material change in the information provided or reviewed by us in connection herewith.

The information contained herein is confidential and has been prepared exclusively for the benefit and use of the Special Committee of the Board of Directors of the Company in its consideration of the proposed transaction, and may not be used for any other purpose or be discussed, reproduced, disseminated, quoted or referred to at any time, in any manner or for any purpose without our prior written consent. This presentation is not for the benefit of, and does not convey any rights or remedies to, any holder of securities of the Company or any other person.

This presentation is subject to the assumptions, qualifications and limitations set forth herein and in the form of our fairness opinion letter, included as an appendix to this presentation, and does not constitute a recommendation by SG Cowen to the Special Committee of the Board of Directors or shareholders of the Company on how to vote with respect to the proposed transaction.

TABLE OF CONTENTS

1.	TRANSACTION OVERVIEW
2.	BLUE OVERVIEW
3.	VALUATION CONSIDERATIONS
APPENDICES
A.	QUARTERLY FINANCIAL STATEMENTS
B.	FORM OF SG COWEN FAIRNESS OPINION

TRANSACTION OVERVIEW

1

TRANSACTION OVERVIEW

Structure and Consideration

•

Proposed acquisition of the outstanding shares of Blue not currently owned by certain shareholders led by White and John W.P. Holt ("Purchasing Shareholders")

•

Transaction structured as a merger

•

Transaction is a "going private" transaction subject to SEC rule 13E-3

•

Intended to be accounted for under recapitalization accounting

•

Purchasing Shareholders will "roll-over" their shares

•

Additional shareholders may choose to "roll-over" shares and join Purchasing Shareholders

•

There are 20.354^(a) million shares outstanding, White proposes to pay $3.50 per share in cash for the 10.405 million outstanding shares not owned by the Purchasing Shareholders

•

In addition, Purchase Shareholders will buy out in the money options and warrants

•

Transaction Value:

•

$75.2 million Total Equity Value^(b)

•

$66.6 million Enterprise Value^(c)

Transaction Voting Shareholder Breakdown^(d)
(in millions)

Shareholders	Total Shares	%
White(e)	9.377	46.1	%
John W.P. Holt(e)	0.572	2.8	%
Total Purchasing Shareholders	9.949	48.9	%
Other Shareholders	10.405	51.1	%
Total Shares Outstanding(a)	20.354	100.0	%

2

•

At the effective time, as defined in the Merger Agreement, each share of common stock other than those of the Purchasing Shareholders listed above and of shareholders exercising dissenting rights will be converted into the right to receive $3.50 per share, without interest ("Per Share Amount")

•

The shares of Purchasing Shareholders shall remain outstanding and after the Merger shall represent one share of common stock of the surviving corporation after the Merger ("Surviving Corporation")

•

Following the transaction, the Company shall cease to be a publicly traded company

•

Dissenting Shares shall not be converted into the right to receive cash, but Dissenting Shares will be cancelled in accordance with state law

•

In connection with the execution of the Merger Agreement, Purchasing Shareholders will enter into a voting agreement wherein such shareholders will agree to vote their shares in favor of the merger

•

Certain shareholders, including White, will enter into a Stockholders' Agreement and Registration Rights Agreement containing agreements as to, among other things, the election of directors, transfer of shares and registration rights in the event of a public offering

(a)

Source: Blue Form 10-Q for the period ended March 31, 2001.

(b)

Fully Diluted Shares Outstanding of 21,484,782 include 1,130,539 dilutive options and no dilutive warrants at an offer price of $3.50 calculated using the Treasury Stock Method accounting.

(c)

Enterprise Value calculated as Total Equity Value plus Total Debt of $1.8 million less Cash of $10.4 million.

(d)

Excludes options and warrants to purchase common shares.

(e)

Source: Blue Proxy Statement dated May 22, 2001.

3

•

All vested and unvested options, in-the-money options will exchanged for an amount in cash equal to the number of underlying shares multiplied by the (Per Share Amount less the exercise price), such amount to be paid promptly following the effective time

Shares		Exercise Price
						Average Price
Outstanding	Exercisable	Low		High
482,367	418,452	$	0.10	$	0.75	$	0.43
549,631	341,505		1.85		1.85		1.85
196,165	2,664		1.88		2.00		1.94
1,208,853	—		2.56		2.56		2.56
2,145,115	396,493		2.81		19.50		8.26
4,582,131	1,159,114					$	4.89

•

Company shall use commercially reasonable efforts to obtain the agreement of holders of warrants outstanding under certain warrant agreements as to which the per share exercise price is less than the Per Share Amount to terminate such warrants in exchange for an amount in cash equal to the underlying shares multiplied by the (Per Share Amount less the exercise price), such amount to be paid promptly following the effective time

Holder	Shares	Strike Price	Expires
Locators, Inc.	83,000	$6.00	4/04
Compu-Time, Inc.	35,000	$6.00	4/04
Parts Finder Locating Systems, Inc.	42,000	$6.00	4/04
DaimlerChrysler AG	1,454,324	$10.03 - $15.04	5/08 - 5/10
Warburg, Pincus EP, L.P.	416,390	$6.86	6/05
Riverside Partnership	138,797	$6.86	6/05
Third Point	125,981	$6.86	6/05
Points West Intl. Inv. Ltd.	12,816	$6.86	6/05
General Electric Capital	400,000	$6.50	12/05
	2,708,308	$9.40

4

Additional Key Transaction Items

•

Company agrees not to solicit or encourage any inquiries regarding any alternative merger proposal or participate in any discussions relating to any alternative merger proposal, but may respond to an unsolicited proposal submitted to Blue that Company Board of Directors determines in good faith is reasonably likely to represent a Superior Proposal as required to discharge Company Board of Directors' fiduciary duties

•

Company may not withdraw or modify its approval of the Merger upon receipt of a Superior Proposal, or approve, recommend or enter into an agreement with respect to a Superior Proposal unless Company gives Merger Sub written notice of the Superior Proposal, and allows Merger Sub at least 5 business days to adjust the terms of the Merger in response to the Superior Proposal

•

Notwithstanding the receipt of a Superior Proposal and the withdrawal of Company Board of Director approval of the Merger, Company shall hold a shareholders' meeting to vote upon the Merger

•

Company (and Surviving Corporation if the Merger becomes effective) shall indemnify Company's directors, officers, employees and agents for 6 years after the Merger against any costs and expenses in connection with any claim arising out of the Merger and shall maintain directors' and officers' insurance for 3 years with respect to current directors and officers

•

The Merger is conditional upon, among other things:

•

Company shareholder approval

•

No government action restricting or limiting the ownership or operation by Merger Sub of Company's business or material assets, requiring disposition of any portion of Company's business or material assets or imposing material limitations on the ability of Merger Sub to hold or exercise full rights of ownership of any shares of Company common stock or effectively to control the Company's business

•

Receipt of all necessary government approvals and expiration of any applicable waiting periods, including Hart-Scott-Rodino waiting periods

5

•

Receipt of all necessary consents



•

White and its affiliates executing a subscription agreement pursuant to which White and its affiliates shall purchase from the Company preferred stock in exchange for an aggregate amount of cash sufficient to pay the Per Share Amount in the merger and all fees and expenses of White, Merger Sub and the Company incurred in the merger



•

Aggregate number of Dissenting Shares not exceeding 15% of the issued and outstanding shares of Company common stock excluding shares of Purchasing Shareholders and Dissenting Shares

•

The merger agreement may be terminated in the following situations, among others:

•

By mutual written consent of Company and Merger Sub

•

By Company or Merger Sub if Company shareholders do not approve the Merger at the shareholder meeting

•

By Company or Merger Sub if the Merger has not closed by December 31, 2001 (the "Outside Date")

•

By Company if (i) Merger Sub or White has materially breached any of its representations, warranties or covenants, and such breach has not been cured within 10 business days following written notice of the breach has been given or (ii) if White fails to vote or advises that it will not vote all of its shares in favor of the Merger

•

By Merger Sub if:

—

Company Board of Directors changes its approval of the Merger in a manner adverse to Merger Sub

—

Any person or group other than Merger Sub and its affiliates acquires beneficial ownership of 10% or more of the Company's common stock and Company Board of Directors approves the acquisition

—

Company materially breaches any representation, warranty, covenant or other agreement provided such breach has not been cured within 10 business days following written notice of the breach has been given

—

Company has not held the shareholders' meeting by six days prior to Outside Date

6

•

Company shall pay to White a termination fee plus expenses, which expenses are not to exceed $750,000, at the time of the termination of the Agreement by Merger Sub in the event the Company (a) materially breaches any of its representations, warranties or covenants, (b) violates its non-soliciation covenant or (c) fails to call and hold a shareholders' meeting six days prior to the Outside Date

•

Subject to the terms of the Agreement, the Company shall pay to White a termination fee if the Company enters into agreement with another acquiror within 6 months of termination of the Agreement by Merger Sub in the event:

•

the Merger is not consummated by the Outside Date (except where Merger Sub would otherwise be prohibited from terminating the Agreement for such reason)

•

of a material breach by the Company of a representation, warranty or covenant of the Company (other than a breach of the Company's non-solicitation covenant)

7

CERTAIN TRANSACTION BACKGROUND INFORMATION

•

The Board of Directors of Blue was made aware that White was considering a proposal for the Company on April 25, 2001

•

SG Cowen was engaged on May 18, 2001 by the Special Committee of the Board of Directors of Blue

•

On November 1, 2000, White, First Analysis and Third Point Partners purchased $15M of Preferred Stock of Blue convertible into Blue common stock at $6.86 per share

•

On April 3, 2001, White purchased 200,000 shares of Common Stock from Geoffrey T. Barker at $3.50 per share

•

SG Cowen did not contact, nor was it requested to contact, additional prospective purchasers for the assets or stock of Blue because SG Cowen was informed by the Special Committee of the Board of Directors that White was not interested in selling any of its shares or participating in any other transaction that might result in a dilution of its equity ownership

8

TRANSACTION SUMMARY

Implied Multiples of Proposed Transaction
(US$ in millions)

Valuation Summary
Offer Price per Share		$	3.50
Primary Shares Outstanding(a)			20.354
Options and Warrants(b)			1.131
Fully Diluted Shares Outstanding			21.485
Implied Equity Value		$	75.2
	Plus: Debt(a)		1.8
	Less: Cash(a)		10.4
Enterprise Value		$	66.6
Blue Stock Price as of June 1, 2001		$	1.95
Premium to Market			79.5%

Total Consideration as a Multiple of:
Revenue^(c)

	Operating Statistic		Implied Multiples
LTM(d)	$	44.9	1.5	x
LQA(d)		49.1	1.4
CY2001 - Base Case(e)		54.2	1.2
CY2002 - Base Case(e)		72.9	0.9

(a)

Source: Blue Form 10-Q for the period ended March 31, 2001.

(b)

Options and Warrants per Blue Management as of April 30, 2001 calculated using the treasury stock method.

(c)

Revenue is net of amounts relating to the fair value of warrants and common stock issued pursuant to the DaimlerChrysler Services Agreement which is consistent with Generally Accepted Accounting Principles ("GAAP").

(d)

Latest Twelve Months ("LTM") and Latest Quarter Annualized ("LQA") per Blue Form 10-Q for the period ended March 31, 2001 and Blue Form 10-K for the period ended December 31, 2000.

(e)

Source: Blue Management's Base Case scenario as of May 24, 2001.

9

TRANSACTION PREMIUMS ANALYSIS^(a)

Premiums Based on Blue Closing Stock Price

(a)

Source: FactSet Data Systems as of June 1, 2001.

10

ANTICIPATED TIMETABLE

•

In the event the SEC does not review the proxy statement filed in connection with the merger

Event	Approximate Timing
Delivery of Opinion to Blue Special Committee of the Board of Directors	June 2, 2001
Blue Board of Directors Meeting	June 2, 2001
Execution of Agreement / Transaction Announcement	June 4, 2001
File Proxy Statement	Mid / Late June 2001
Distribute Proxy Statement to Blue Shareholders	Late June / Early July 2001
Special Meeting of Blue Shareholders	Late July / Early August 2001
Closing	Late July / Early August 2001

11

BLUE OVERVIEW

12

BLUE OVERVIEW (SEATTLE, WA)^(a)

•

Blue provides e-Business products and services to the retail automotive industry

•

Design and host dealer web sites and provide customer relationship management (CRM) tools

•

Collect, aggregate, and distribute dealer data

•

Other e-Business products include training and consulting, and portal services for industry information on parts and wholesale used vehicle sales

•

The Company's core e-Business solutions are endorsed by the National Automotive Dealers Association (NADA)

•

Client base is comprised of approximately 8,950 auto dealers as well as 14 auto manufacturers

•

DaimlerChrysler is the Company's largest customer, accounting for approximately 20% of FY2000 revenues

•

Blue's strategy is to expand its network of clients and to leverage it with solutions that allow dealers to increase customer loyalty and revenue growth

•

The Company is headquartered in Seattle, WA and had 674 employees as of April 30, 2001

•

Selected affiliates include Vicinity, AutoVantage, Excite Classifieds2000, Yahoo Autos, BuySellBid.com, InfoSpace.com

(a)

Source: Blue Web site, Blue Form 10-K for the period ended December 31, 2000 and Blue Management as of April 30, 2001.

13

PRODUCTS AND SERVICES^(a)

Summary Product Review
(US$ in millions)

				Revenue Contribution(b)
	Product Offering	Description		2002E				2001E				2000A				1999A
Internet Applications and Professional Services	Packaged e-Business Services	•	Standardized dealer Web site and advertising tools	$	52.5	72.0	%	$	39.6	73.0	%	$	27.3	65.8	%	$	13.5	58.0	%
	Custom Development Services	•	Provide upgrades and enhancements to standard solutions
	CRM Tools	•	Internet-based lead management, maintenance record tracking, and lead "pick-or-pass"
Data Extraction and Aggregation Services	IntegraLink (subsidiary)	•	Collects service, inventory, sales, parts and accounting data from dealerships		12.1	16.7	%		11.9	21.9	%		12.5	30.2	%		7.3	31.5	%
	PartsVoice (subsidiary)	•	Database of original equipment manufacturers (OEM) parts
		•	Includes inventory information for 9,000 dealers
Other Services	Dealer Advisory Services	•	Best practices e-Business training and consulting for dealers and manufacturers		8.3	11.3	%		2.7	5.0	%		1.7	4.0	%		2.4	10.5	%
	Internet Portals	•	Host industry information site MotorPlace.com and automotive research portal DealerNet.com
	MotorPlace Auto Exchange	•	Marketplace for auto leasing companies to sell wholesale used vehicles
				$	72.9	100.0	%	$	54.2	100.0	%	$	41.5	100.0	%	$	23.3	100.0	%

(a)

Source: Form 10-K for the period ended December 31, 2000 and Blue Management's Base Case scenario as of May 24, 2001.

(b)

Revenue is net of amounts relating to the fair value of warrants and common stock issued pursuant to the DaimlerChrysler Services Agreement which is consistent with Generally Accepted Accounting Principles ("GAAP").

14

PRODUCTS AND SERVICES^(a)(b)

Revenue Contribution—2002E	Revenue Contribution—2001E
Revenue Contribution—2000A	Revenue Contribution—1999A

15

BLUE RECENT EVENTS^(a)

•

May 7, 2001—Announced the availability of NADA Sales Accelerator Package, a suite of e-business tools for automotive dealers that gives consumers the ability to research, locate and arrange purchase of a vehicle from a dealer online

•

April 24, 2001—Announced financial results for the first quarter ended March 31, 2001. Pro forma revenue for the first quarter of 2001 was $13.6 million, compared to $8.9 million for the first quarter of 2000

•

April 3, 2001—White purchases 200,000 common shares from Geoffrey Barker, Blue Director, at $3.50 per share

•

March 14, 2001—Announced that it has secured a $10 million revolving credit facility from Silicon Valley Bank of Santa Clara, CA

•

January 25, 2001—Announced that gross revenue for the fourth quarter of 2000, excluding certain adjustments, increased 58% to $13.2 million, compared to $8.4 million in the fourth quarter of 1999

•

November 1, 2000—Added $15 million in private equity funding to finance the continued development of e-business products and services for automotive dealer and manufacturer customers. The $15 million investment at $6.86 per share results from a private equity agreement announced in June with White, First Analysis Venture Capital, and Third Point Partners L.P.

(a)

Source: Form 10-K for the period ended December 31, 2000 and Blue Management's Base Case scenario as of May 24, 2001.

(b)

Revenue is net of amounts relating to the fair value of warrants and common stock issued pursuant to the DaimlerChrysler Services Agreement which is consistent with Generally Accepted Accounting Principles ("GAAP").

16

MANAGEMENT AND BOARD OF DIRECTORS^(a)

Executive Officers

Name	Age	Position
John W.P. Holt(b)	44	President and Chief Executive Officer
David S. Snyder	40	Executive Vice President and Chief Financial Officer
Rajan Krishnamurty	43	Executive Vice President and Chief Technology Officer
Terrence E. Smail	57	Executive Vice President, Sales and Account Services
Kevin M. Distelhorst	39	Vice President and General Manager, IntegraLink
Michael D. Bell	43	Vice President and General Manager, PartsVoice

Board of Directors

Name	Age	Position
Geoffrey T. Barker	39	Co-Founder, Blue; Chairman and CEO, Vigilos, Inc.
Mark T. Koulogeorge	37	Managing Director, First Analysis Corporation
Joseph P. Landy	39	Managing Director, White
Ernest H. Pomerantz	59	Senior Managing Director, Mesa Partners, Inc.
J.D. Power, III	69	Chairman and CEO, J.D. Power and Associates
Howard A. Tullman	55	CEO, Worldwide Xceed Group, Inc.

(a)

Source: Blue Proxy Statement dated May 22, 2001 and Company Web site.

(b)

Management member is on the Board of Directors.

17

SUMMARY OWNERSHIP PROFILE^(a)

Ownership by Major Classification

Shareholder Class / Owner		Shares	% of Total
Direct Insider Ownership(a)
	John W.P. Holt	572,132	2.8	%
	Geoffrey Barker	427,492	2.1	%
	Mark Koulogeorge	156,574	0.8	%
	Howard Tullman	36,000	0.2	%
	Ernest Pomerantz	30,000	0.1	%
	David Snyder	7,500	0.0	%
	Michael Bell	7,250	0.0	%
	Rajan Krishnamurty	2,441	0.0	%
	J.D. Power, III	1,000	0.0	%
	Terrence Smail	—	0.0	%
	Joseph Landy	—	0.0	%
		1,240,389	6.1	%
Beneficial Ownership(a)
	White	9,377,068	46.1	%
	First Analysis Corporation	1,642,962	8.1	%
	General Electric Capital Assurance Company	713,065	3.5	%
		11,733,095	57.6	%
13F Filing Institutions(b)
	Third Point Management Co, LLC	798,258	3.9	%
	Peter A. Wright Capital	252,100	1.2	%
	Dimensional Fund Advisors	250,900	1.2	%
		1,301,258	6.4	%
	Other Institutional Holders	1,304,968	6.4	%
	Total Institutional Holders	2,606,226	12.8	%
Other Holders		4,774,533	23.5	%
Total Common Shares Outstanding(c)		20,354,243	100.0	%

(a)

Source: Blue Proxy Statement dated May 22, 2001 as of March 14, 2001.

(b)

Source: CDA/Prism as of May 29, 2001 as of April 30, 2001.

(c)

Source: Blue Form 10-Q for the period ended March 31, 2001. Assumes 20,354,243 common shares outstanding as of April 30, 2001.

18

HISTORICAL STOCK PRICE PERFORMANCE^(a)

Trading Statistics
Current	$	1.95
5-Day Average		1.99
10-Day Average		1.95
20-Day Average		1.98
Closing Average Since IPO		7.01
Trading High Since IPO		34.00
Trading Low Since IPO		0.88

(a)

Source: FactSet Data Systems as of June 1, 2001.

19

HISTORICAL STOCK PRICE PERFORMANCE^(a)

Blue vs. NASDAQ and Indices—LTM

(a)

Source: FactSet Data Systems as of June 1, 2001.

(b)

B2B Software Index includes: ARBA CMRC FMKT PPRO SQST VERT WEBM.

(c)

Transportation Tech Cos. Index includes: ABTL CCCG PRTS REY TRDR.

20

HISTORICAL STOCK PRICE PERFORMANCE^(a)

Trading Statistics
Current	$	1.95
5-Day Average		1.99
10-Day Average		1.95
20-Day Average		1.98
LTM Average		3.79
LTM High		8.00
LTM Low		0.88

Last Twelve Months

(a)

Source: FactSet Data Systems as of June 1, 2001.

21

HISTORICAL STOCK PRICE PERFORMANCE^(a)

Avg. Close	$	2.59
Avg. Volume		34,324
Avg. $/ Day	$	84,817
Total Volume		4,290,500
Shares O/S		20,354,243
Float		7,380,759
Float Turnover		0.6	x

Shares at Specific Prices—Last 6 months

Cumulative Shares Traded at Specific Prices—Last 6 months

(a)

Source: FactSet Data Systems as of June 1, 2001.

22

HISTORICAL STOCK PRICE PERFORMANCE^(a)

Avg. Close	$	3.79
Avg. Volume		50,358
Avg. $/ Day	$	192,968
Total Volume		12,740,600
Shares O/S		20,354,243
Float		7,380,759
Float Turnover		1.7	x

Shares at Specific Prices—LTM

Cumulative Shares Traded at Specific Prices—LTM

(a)

Source: FactSet Data Systems as of June 1, 2001.

23

ACQUISITION / DIVESTITURE HISTORY

Historical Acquisition and Divestiture Activity^(a)
(US$ in millions)

Date	Target Name	Deal Value			Description
January 2000	IntegraLink Corporation	$	3.7		Acquisition enhanced data acquisition capabilities and provided access to additional clients
January 2000	YachtWorld.com		14.0	(b)	Sale of YachtWorld.com assets to Boats.com, Inc.
April 1999	PartsVoice, LLC		30.7	(c)	Acquisition of vehicle parts data aggregation and management services business

(a)

Source: Blue Form 10-K for the period ended December 31, 2000 and Company Press Releases.

(b)

Plus warrants. As of March 28, 2001, the Company had received $7.2 million of a $10.5 million promissory note issued by Boats.com in conjunction with this sale. The Company has agreed to forgive the remaining $3.6 million of the note receivable balance in exchange for release of certain obligations in connection with the transaction.

(c)

Weaker than expected sales and greater than expected client attrition in this business unit led the Company to recognize a $9.7 million impairment charge during the third quarter of 2000 which was allotted entirely to goodwill.

24

FINANCIAL SUMMARY^(a)

Revenue(b)	Gross Profit

EBIT^(c)

(a)

Source: Historical figures per Blue Form 10-K for the period ended December 31, 2000. Projections per Blue Management's Base Case scenario as of May 24, 2001.

(b)

Revenue is net of amounts relating to the fair value of warrants and common stock issued pursuant to the DaimlerChrysler Services Agreement which is consistent with Generally Accepted Accounting Principles ("GAAP").

(c)

Excludes Stock-based Compensation, Amortization of Intangibles and other extraordinary items.

25

INCOME STATEMENT

Financial Performance^(a)(b)
(US$ in millions, except per share data)

		Historical												Projected—Base Case
Fiscal Year Ending December 31,																				CAGR 1998-2002E
		1998			1999			2000			LTM(c)			2001E			2002E
Revenue(d)		$	6.2		$	23.3		$	41.5		$	44.9		$	54.2		$	72.9		84.9	%
	% Growth		265.0	%		272.9	%		78.1	%		—			30.7	%		34.5	%
Gross Profit		$	5.0		$	18.5		$	33.2		$	35.8		$	43.6		$	59.6		85.4	%
	% of Revenue		80.8	%		79.3	%		80.0	%		79.9	%		80.4	%		81.7	%
EBIT		$	(4.3	)	$	(9.5	)	$	(16.2	)	$	(20.4	)	$	(23.1	)	$	(9.9	)	NM
	% of Revenue		(68.7	)%		(40.8	)%		(39.0	)%		(45.5	)%		(42.6	)%		(13.6	)%
Net Income		$	(4.2	)	$	(10.0	)	$	(15.4	)	$	(19.6	)	$	(23.0	)	$	(9.7	)	NM
	% of Revenue		(67.9	)%		(43.0	)%		(37.2	)%		(43.8	)%		(42.5	)%		(13.3	)%
Earnings Per Share		$	(0.50	)	$	(0.74	)	$	(0.86	)	$	(1.05	)	$	(1.13	)	$	(0.47	)	NM

(a)

Source: Historical figures per Blue SEC filings. Projections per Blue Management's Base Case scenario as of May 24, 2001.

(b)

Excludes Stock-based Compensation, Amortization of Intangibles and other extraordinary items.

(c)

Latest Twelve Months ("LTM") per Blue Form 10-Q for the period ended March 31, 2001 and Blue Form 10-K for the period ended December 31, 2000.

(d)

Revenue is net of amounts relating to the fair value of warrants and common stock issued pursuant to the DaimlerChrysler Services Agreement which is consistent with Generally Accepted Accounting Principles ("GAAP").

26

COMPARISON OF BASE CASE AND OPTIMISTIC CASE^(a)

•

Management has provided us with revenue detail on an optimistic case

•

Management has not provided us with expense detail with respect to the optimistic case

Base Case vs. Optimistic Case Revenue Analysis
(US$ in millions)

	2001E								2002E
	Base		Optimistic		Difference		Percentage		Base		Optimistic		Difference		Percentage
Internet Applications	$	37.1	$	37.2	$	0.1	0.4	%	$	49.6	$	52.5	$	2.9	5.8	%
Professional Services		8.6		8.6		—	—			9.5		10.6		1.1	11.5	%
Dealer Advisory Services		0.8		1.2		0.4	51.9	%		1.3		3.0		1.7	134.1	%
PartsVoice		10.0		10.1		0.1	1.0	%		10.1		10.7		0.5	5.4	%
IntegraLink		1.9		1.9		—	—			2.0		2.4		0.4	20.0	%
MotorPlace Auto Exchange		1.0		1.0		—	—			6.0		7.8		1.8	30.0	%
Portals & Advertising		1.0		1.0		—	—			1.0		1.0		—	—
Pro Forma Revenue(b)	$	60.3	$	61.0	$	0.6	1.1	%	$	79.5	$	88.0	$	8.5	10.6	%
Chrysler Equity Subscriptions		6.1		6.1		—				6.6		6.6		—
Revenue(c)	$	54.2	$	54.8	$	0.6	1.2	%	$	72.9	$	81.4	$	8.5	11.6	%

(a)

Source: Blue Management as of May 24, 2001.

(b)

Pro Forma Revenue includes amounts relating to the fair value of warrants and common stock issued pursuant to the DaimlerChrysler Services Agreement.

(c)

Revenue is net of amounts relating to the fair value of warrants and common stock issued pursuant to the DaimlerChrysler Services Agreement which is consistent with Generally Accepted Accounting Principles ("GAAP").

27

BLUE PROJECTED CASH FLOW ANALYSIS

Projected Cash Flow Analysis^(a)
(US$ in millions)

	CY 2001												CY 2002
	Q1A			Q2E			Q3E			Q4E			Q1E			Q2E			Q3E			Q4E
Net loss	$	(6.2	)	$	(6.4	)	$	(5.8	)	$	(4.6	)	$	(4.2	)	$	(3.4	)	$	(2.0	)	$	(0.1	)
Chrysler Equity Subscriptions		1.3			1.5			1.6			1.7			1.7			1.7			1.7			1.7
Amortization of Deferred Equity Expenses		0.1			—			—			—			—			—			—			—
Depreciation & Amortization		1.3			1.3			1.4			1.8			1.8			1.8			1.9			1.9
Deferral of Revenue per SAB 101		1.0			0.7			1.1			0.6			1.0			0.6			0.4			0.2
Adjusted EBDA	$	(2.6	)	$	(2.9	)	$	(1.8	)	$	(0.4	)	$	0.3		$	0.7		$	1.9		$	3.6
Capital Purchases		(1.0	)		(3.4	)		(0.9	)		(0.7	)		(1.0	)		(0.7	)		(0.0	)		(0.6	)
Cash Provided by (used in) Financing Activities		(0.5	)		(0.5	)		(0.3	)		(0.4	)		(0.3	)		(0.1	)		(0.0	)		0.0
Cash Flow Before Changes in Working Capital		(4.1	)		(6.7	)		(3.0	)		(1.4	)		(1.0	)		(0.2	)		1.9			3.1
Changes in Working Capital		(2.2	)		1.9			(1.1	)		(0.2	)		(0.3	)		1.2			(0.5	)		(0.2	)
Net (Decrease) Increase in Cash	$	(6.2	)	$	(4.8	)	$	(4.1	)	$	(1.7	)	$	(1.3	)	$	1.0		$	1.4		$	2.9
Cash, Beginning of Quarter		16.6			10.4			5.6			1.5			(0.2	)		(1.4	)		(0.4	)		1.0
Cash, End of Quarter	$	10.4		$	5.6		$	1.5		$	(0.2	)	$	(1.4	)	$	(0.4	)	$	1.0		$	3.9

(a)

Source: Blue Management's Base Case scenario as of May 24, 2001.

28

BLUE PROJECTED BALANCE SHEET ANALYSIS

Projected Balance Sheet Analysis^(a)
(US$ in millions)

	CY 2001										CY 2002
	Q1A		Q2E		Q3E			Q4E			Q1E			Q2E			Q3E			Q4E
Cash and Cash Equivalents	$	10.4	$	5.6	$	1.5		$	(0.2	)	$	(1.4	)	$	(0.4	)	$	1.0		$	3.9
Accounts Receivable		10.4		10.0		11.3			12.4			13.4			13.2			14.0			15.4
Other Current Assets		1.5		1.5		1.4			0.9			1.4			1.1			1.7			1.5
Total Current Assets		22.3		17.1		14.1			13.1			13.3			13.9			16.6			20.7
Capital Assets, net		15.1		17.2		16.7			15.6			14.7			13.6			11.8			10.4
Intangible Assets, net		14.4		13.3		12.2			11.1			10.2			9.3			8.3			7.4
Other Assets		0.7		0.6		0.5			0.4			0.4			0.3			0.3			0.2
Total Assets	$	52.5	$	48.2	$	43.5		$	40.2		$	38.6		$	37.1		$	37.1		$	38.7
Accounts Payable and Other Current Liabilities	$	5.8	$	7.0	$	6.4		$	6.3		$	6.9		$	7.0		$	7.2		$	7.5
Deferred Revenues		7.3		8.1		9.6			10.8			12.4			13.5			14.6			15.4
Current Portion of Financing		1.4		1.3		0.9			0.5			0.2			0.0			0.0			0.0
Total Current Liabilities		14.3		16.4		17.0			17.6			19.4			20.6			21.8			22.9
Total Non-current Liabilities		0.4		0.1		(0.0	)		(0.0	)		(0.0	)		(0.0	)		(0.0	)		(0.0	)
Total Shareholders' Equity		37.7		31.8		26.5			22.6			19.2			16.5			15.2			15.9
Total Liabilities & Shareholders' Equity	$	52.5	$	48.2	$	43.5		$	40.2		$	38.6		$	37.1		$	37.1		$	38.7

(a)

Source: Blue Form 10-Q for the period ended March 31, 2001 and Blue Management's Base Case scenario as of May 24, 2001.

29

BLUE SUMMARY CAPITALIZATION

Selected Balance Sheet Items^(a)
(US$ in thousands)

					December 31,
			March 31, 2001
					2000		1999
Balance Sheet Data
	Cash and Cash Equivalents		$	10,354	$	16,577	$	14,224
	Working Capital (Deficit)			9,210		13,367		13,828
		Total Assets		52,513		57,926		54,032
		Long-term Obligations, net of Current Portion		435		548		1,245
	Total Shareholders' Equity			37,701		42,255		45,585

(a)

Source: Blue Form 10-K for the period ended December 31, 2000 and Blue Form 10-Q for the period ended March 31, 2001.

30

VALUATION CONSIDERATIONS

31

TRANSACTION PREMIUMS ANALYSIS^(a)

Premiums Based on Blue Closing Stock Price

(a)

Source: FactSet Data Systems as of June 1, 2001.

32

IMPLIED MULTIPLES OFFERED VS. INDUSTRY TRADING MULTIPLES^(a)

Total Consideration / LTM Revenue(b)	Total Consideration / LQA Revenue(b)
Total Consideration / CY01 Revenue(c)	Total Consideration / CY02 Revenue(c)

(a)

Source: FactSet Data Systems as of June 1, 2001.

(b)

Latest Twelve Months ("LTM") and Latest Quarter Annualized ("LQA") data as of last reported quarter.

(c)

Projections per First Call where available. Blue Projections per Blue Management's Base Case Scenario as of May 24, 2001.

33

SELECTED COMPANY ANALYSIS

Trading Multiples of Selected Companies
(US$ in millions, except per share data)

										Enterprise Value as a Multiple of (b)(c)(d)
										Revenue
Company (FYE)	Stock Price(a)		% of 52 Week High(a)		Market Value		Enterprise Value(b)											Estimated 5yr EPS Growth(e)
										LTM		LQA		CY01E		CY02P
ASPs
Corio, Inc. (12/31)	$	1.25	5.7	%	$	66.1	($	35.5	)	(0.7	)x	(0.7	)x	(0.7	)x	(0.5	)x	20.0	%
Interliant, Inc. (12/31)(f)		1.28	4.4			63.6		212.2		1.2		1.3		1.7		NA		32.5
NaviSite, Inc. (7/31)(g)		1.70	2.9			100.5		99.5		1.1		0.9		0.8		0.5		122.9
eCRM
Chordiant Software Inc. (12/31)	$	3.25	17.0	%	$	171.6	$	93.5		2.2	x	1.8	x	1.3	x	0.9	x	45.0	%
FirePond, Inc. (10/31)(h)		1.72	4.0			66.7		(4.1	)	(0.1	)	(0.1	)	(0.1	)	NA		50.0
Onyx Software Corp. (12/31)		5.95	18.5			256.4		224.3		1.8		2.0		1.7		1.3		41.0
B2B
PurchasePro.com, Inc. (12/31)	$	1.82	3.8	%	$	133.4	$	110.3		1.4	x	1.7	x	1.0	x	0.8	x	40.0	%
SciQuest.com, Inc. (12/31)		1.61	10.9			53.7		(5.2	)	(0.1	)	(0.1	)	(0.1	)	(0.1	)	60.0
VerticalNet, Inc. (12/31)		2.14	3.4			216.3		150.3		1.1		1.0		1.0		0.7		NM
Transportation / Data Aggregation
Autobytel.com, Inc. (12/31)	$	1.39	16.2	%	$	28.3	($	39.1	)	(0.6	)x	(0.6	)x	NA		NA		20.0	%
CCC Information Services Group, Inc. (12/31)		7.60	56.8			166.6		221.0		1.1		1.2		NA		NA		NM
PartsBase.com, Inc. (12/31)		1.40	16.0			20.2		(9.1	)	(1.8	)	(1.4	)	NA		NA		NM
The Reynolds and Reynolds Co. (9/30)		22.85	99.3			1,764.2		1,944.9		2.0		2.0		1.9	x	NA		13.0
High			99.3	%						2.2	x	2.0	x	1.9	x	1.3	x	122.9	%
Median			10.9							1.1		1.0		1.0		0.7		40.5
Mean			19.9							0.7		0.7		0.9		0.5		44.4
Low			2.9							(1.8	)	(1.4	)	(0.7	)	(0.5	)	13.0
Blue at Market (12/31)	$	1.95	24.4	%	$	40.5	$	31.9		0.7	x	0.6	x	0.6	x	0.4	x	NM
Blue at $3.50 Offer Price Per Share	$	3.50	43.8	%	$	75.2	$	66.6		1.5	x	1.4	x	1.2	x	0.9	x	NM

(a)

Stock price data as of June 1, 2001.

(b)

Enterprise Value defined as Market Value plus Total Debt less Cash.

(c)

Latest Twelve Months ("LTM") and Latest Quarter Annualized ("LQA") as of last reported quarter.

(d)

Estimates are calendar year end per First Call where available.

(e)

Five Year Growth Rate Estimates are from First Call where available; otherwise IBES, Zacks or S&P Earnings Report.

(f)

Interliant Revenue estimates per C. E. Unterberg Research Report dated May 7, 2001.

(g)

NaviSite Revenue and EPS estimates per Prudential Securities Research Report dated April 23, 2001.

(h)

FirePond Revenue and EPS estimates per Dain Rauscher Wessels Research Report dated May 24, 2001.

34

SELECTED COMPANY ANALYSIS

Operating Statistics of Selected Companies
(US$ in millions, except per share data)

			Operating Results(a)(b)(c)
			Revenue								Margins				EPS(a)(b)(c)
Company (FYE)	Revenue Growth Rate CY / CY+1																													Book Value(d)			Debt/ Cap.
			LTM		LQA		CY01E		CY02P		Gross		EBIT		LTM			CY01E			CY02P			Cash(d)		STD(d)		LTD(d)
ASPs
Corio, Inc. (12/31)	47.9	%	$	51.9	$	54.3	$	50.3	$	74.4	(23.1	)%	(158.1	)%	($	1.63	)	($	1.66	)	($	1.49	)	$	117.1	$	6.7	$	8.9	$	120.9		11.4	%
Interliant, Inc. (12/31)(e)	NM			170.8		158.3		124.6		NA	27.3		(57.6	)		(2.12	)		(3.26	)		(2.63	)		49.1		14.1		183.6		10.3		95.1
NaviSite, Inc. (7/31)(f)	74.1			88.5		110.8		123.3		214.7	(27.7	)	(102.0	)		(1.58	)		(1.81	)		(0.93	)		68.7		0.1		67.6		57.2		54.2
eCRM
Chordiant Software Inc. (12/31)	43.5	%	$	41.7	$	52.2	$	72.3	$	103.7	51.1	%	(63.8	)%	($	0.57	)	($	0.52	)	($	0.04	)	$	78.7	$	0.5	$	0.0	$	94.8		0.5	%
FirePond, Inc. (10/31)(g)	NM			63.3		49.3		50.3		NA	47.5		(48.3	)		(0.73	)		(0.83	)		NA			71.0		0.2		0.0		84.3		0.2
Onyx Software Corp. (12/31)	36.3			126.7		113.6		128.2		174.8	74.3		(8.9	)		(0.29	)		(0.56	)		0.08			36.4		1.2		3.0		87.7		4.6
B2B
PurchasePro.com, Inc. (12/31)	23.6	%	$	76.5	$	64.1	$	108.3	$	133.9	91.7	%	(32.9	)%	($	0.31	)	$	0.01		$	0.28		$	54.9	$	24.7	$	7.2	$	248.4		11.4	%
SciQuest.com, Inc. (12/31)	40.8			59.2		50.6		60.3		84.9	9.5		(99.2	)		(1.83	)		(1.23	)		(0.84	)		61.3		1.1		1.3		164.9		1.5
VerticalNet, Inc. (12/31)	50.0			136.3		146.7		150.0		225.0	61.2		(83.4	)		(1.30	)		(0.66	)		(0.01	)		107.3		2.1		39.1		550.9		7.0
Transportation / Data Aggregation
Autobytel.com, Inc. (12/31)	NM		$	68.1	$	66.6		NA		NA	NM		(44.2	)%	($	1.18	)		NA			NA		$	76.2	$	0.0	$	8.8	$	86.2		9.3	%
CCC Information Services Group, Inc. (12/31)	NM			209.5		189.6		NA		NA	64.5	%	(3.1	)		(1.06	)	($	0.34	)		NA			11.6		0.4		65.6		(5.5	)	NM
PartsBase.com, Inc. (12/31)	NM			5.1		6.4		NA		NA	(21.1	)	(213.4	)		(0.60	)		NA			NA			29.3		0.0		0.0		30.3		0.0
The Reynolds and Reynolds Co. (9/30)	NM			967.4		965.3	$	998.2		NA	58.6		16.4			1.25			1.37			NA			140.3		0.0		321.0		498.1		39.2
High	74.1	%									91.7	%	16.4	%																			95.1	%
Median	43.5										49.3		(57.6	)																			8.1
Mean	45.2										34.5		(69.1	)																			19.5
Low	23.6										(27.7	)	(213.4	)																			0.0
Blue at Market (12/31)	34.5	%	$	44.9	$	49.1	$	54.2	$	72.9	79.9	%	(45.4	)%	($	1.05	)	($	1.13	)	($	0.47	)	$	10.4	$	1.4	$	0.4	$	37.7		4.5	%

(a)

EBIT, net income and earnings per share before extraordinary item(s) and cumulative effect of accounting change.

(b)

Latest Twelve Months ("LTM") and Latest Quarter Annualized ("LQA") as of last reported quarter.

(c)

Estimates are calendar year end per First Call where available.

(d)

Book Value, Total Debt and Cash as of last reported quarter.

(e)

Interliant Revenue estimates per C. E. Unterberg Research Report dated May 7, 2001.

(f)

NaviSite Revenue and EPS estimates per Prudential Securities Research Report dated April 23, 2001.

(g)

FirePond Revenue and EPS estimates per Dain Rauscher Wessels Research Report dated May 24, 2001.

35

IMPLIED MULTIPLES OFFERED VS. SELECTED M&A TRANSACTIONS^(a)

Blue Statistics
Offer Price Per Share	$	3.50
Implied Enterprise Value	$	66.6
LTM Revenues(b)	$	44.9
LQA Revenue(b)	$	49.1
CY+1 Revenue(c)	$	54.2

Total Consideration / LTM Revenue(b)	Total Consideration / LQA Revenue(b)

Total Consideration / CY+1 Revenue^(d)

(a)

Assumes an offer price per share of $3.50.

(b)

Latest Twelve Months ("LTM") and Latest Quarter Annualized ("LQA") as of last reported quarter prior to announcement.

(c)

Source: Blue Management's Base Case scenario as of May 24, 2001.

(d)

Source: Wall Street Research. Assumes CY+1 Revenue estimates for the calendar year ending December 31, 2001.

36

IMPLIED PREMIUMS OFFERED VS. SELECTED M&A TRANSACTIONS^(a)

Blue Statistics
Offer Price Per Share		$	3.50
Price as of:
	6/1/01	$	1.95
	5/4/01	$	2.10

One Trading Day Prior to Announce

20 Trading Days Prior to Announce

(a)

Source: FactSet Data Systems as of June 1, 2001. Assumes an offer price per share of $3.50.

37

SELECTED TRANSACTION ANALYSIS^(a)

Analysis of Selected M&A Transactions
(US$ in millions)

								Total Consideration as a Multiple of:						Premiums Paid to Market(d)
Announce Date	Closing Date	Acquiring Company/ Target Company	Equity Value		Enterprise Value			LTM(b) Revenue		LQA(b) Revenue		CY+1(c) Revenue		4 Weeks Prior		One Day Prior
4/11/01	Pending	Autobytel.com Inc.    Autoweb.com, Inc.	$	15.6	$	2.6		0.1	x	0.1	x	NA		69.4	%	82.6	%
4/9/01	Pending	Kana Communications, Inc.    Broadbase Software, Inc.		77.8		(54.4	)	(1.0	)	(1.0	)	(0.9	)x	(55.1	%)	27.8	%
4/9/01	Pending	National Broadcasting Company, Inc.    NBC Internet, Inc.		152.2		(96.9	)	(0.9	)	(1.6	)	(1.1	)	24.0	%	46.0	%
1/8/01	3/27/01	Chordiant Software Inc.    Prime Response Inc.		33.0		6.0		0.2		0.3		0.1		(12.0	%)	20.0	%
12/19/00	4/12/01	Vitamin Shoppe Industries Inc.    VitaminShoppe.com, Inc.		20.4		16.3		0.5		0.4		0.2		128.6	%	220.0	%
12/11/00	1/23/01	Bosch Security Systems Corp.    Detection Systems, Inc.(e)		124.6		142.5		1.0		1.0		NA		108.7	%	97.3	%
10/25/00	12/8/00	Telelogic AB    Continuus Software Corp.		41.9		42.1		1.0		1.0		0.6		90.9	%	28.7	%
10/25/00	12/21/00	Trilogy Software, Inc.    pcOrder.com, Inc.		105.5		27.5		0.5		0.5		0.5		55.7	%	85.5	%
6/27/00	9/29/00	Integrated Defense Technologies, Inc.    Tech-Sym Corp.		183.0		151.6		0.9		0.8		NA		36.4	%	25.0	%
4/27/00	9/1/00	Allen Systems Group, Inc.    Viasoft, Inc.		157.4		69.1		1.0		1.5		NA		26.8	%	52.7	%
		High	$	183.0	$	151.6		1.0	x	1.5	x	0.6	x	128.6	%	220.0	%
		Median		91.7		21.9		0.5		0.5		0.2		46.0	%	49.4	%
		Mean		91.1		30.7		0.3		0.3		(0.1	)	47.3	%	68.6	%
		Low		15.6		(96.9	)	(1.0	)	(1.6	)	(1.1	)	(55.1	%)	20.0	%

(a)

Source: SEC Filings and Press Releases of acquiror or target.

(b)

Latest Twelve Months ("LTM") and Latest Quarter Annualized ("LQA") as of last reported quarter prior to transaction announcement.

(c)

Source: Wall Street Research. Assumes CY+1 Revenue estimates for the calendar year ending December 31, 2001.

(d)

Premiums analysis based on the closing price four weeks and one day prior to announcement, respectively.

(e)

Premiums calculated relative to October 13, 2000, the date of the initial offer of $14.00 per share. Initial offer was rejected, offer of $18.00 was accepted on December 11, 2000.

38

IMPLIED PREMIUMS VS. RECENT TECHNOLOGY GOING PRIVATE TRANSACTIONS^(a)

Premium Paid to One Day Prior	Premium Paid to One Week Prior

Premium Paid to One Month Prior

(a)

Source: SEC Filings or Press Releases of target or acquiror. Stock price data per FactSet Data Systems as of June 1, 2001. Assumes an offer price per share of $3.50.

39

PREMIUMS PAID IN RECENT TECHNOLOGY GOING PRIVATE TRANSACTIONS^(a)

Recent Technology Going Private Premiums Paid

				Premiums Paid to Market:
Announce Date	Closing Date	Target Company	Acquiring Company	1 day prior		1 week prior		1 month prior
12/20/2000	04/12/2001	Vitaminshoppe.com Inc.	Vitamin Shoppe Industries Inc.	220.0	%	113.3	%	128.6	%
12/19/2000	01/31/2001	Loislaw.com Inc.	Wolters Kluwer NV	190.3	%	322.3	%	309.8	%
12/11/2000	01/23/2001	Detection Systems Inc.(b)	Robert Bosch GmbH	97.3	%	100.0	%	108.7	%
10/25/2000	12/22/2000	pcOrder.com	Trilogy Software Inc.	85.5	%	108.2	%	55.7	%
08/11/2000	10/06/2000	BI Inc.	Investor Group	78.4	%	106.3	%	65.0	%
07/17/2000	08/24/2000	CareerBuilder Inc.	Investor Group	93.9	%	106.5	%	156.0	%
06/27/2000	09/29/2000	Tech-Sym Corp.	Integrated Defense Tech.	25.0	%	23.7	%	36.4	%
04/27/2000	09/01/2000	VIASOFT Inc.	Allen Systems Group	52.7	%	63.9	%	26.8	%
03/06/2000	04/25/2000	Data Transmission Network Corp.	Veronis Suhler & Assoc. Commun.	16.0	%	16.6	%	68.7	%
02/25/2000	04/13/2000	Spanlink Communications Inc.	Spanlink Acquisition Group	(2.3	%)	7.7	%	37.7	%
02/19/2000	02/19/2000	Diehl Graphsoft Inc.	Nemetschek AG	33.3	%	52.0	%	94.9	%
02/14/2000	03/29/2000	GRC International Inc.	AT&T Corp.	12.1	%	16.5	%	18.8	%
01/31/2000	05/12/2000	ThermoQuest Corp.	Thermo Instrument Systems Inc.	36.0	%	47.0	%	64.8	%
01/31/2000	05/03/2000	Metrika Systems Corp.	Thermo Instrument Systems Inc.	(6.5	%)	0.0	%	50.0	%
01/31/2000	04/13/2000	ONIX Systems Inc.	Thermo Instrument Systems Inc.	2.9	%	16.1	%	46.9	%
01/31/2000	04/04/2000	Thermo Sentron Inc. (Thermedics)	Thermedics (Thermo Electron)	7.4	%	6.9	%	6.9	%
12/21/1999	02/03/2000	Micro Warehouse Inc.	Investor Group	24.6	%	51.2	%	45.5	%
12/03/1999	03/23/2000	Analogy Inc.	Avant Corp.	32.3	%	24.0	%	20.2	%
11/12/1999	02/09/2000	Vertex Communications Corp.	TriPoint Global Communications	48.5	%	37.5	%	71.7	%
10/26/1999	01/31/2000	Watkins-Johnson Co.	Fox Paine & Co L.L.C.	30.0	%	29.0	%	24.6	%
10/21/1999	12/22/1999	Premisys Communications Inc.	Zhone Technologies Inc.	12.7	%	23.1	%	22.1	%
10/19/1999	12/10/1999	TeleSciences Inc.	EDB AS	181.3	%	219.6	%	251.6	%
08/24/1999	02/02/2000	Aavid Thermal Technologies Inc.	Willis Stein & Partners L.P.	29.1	%	23.3	%	28.7	%
07/28/1999	10/19/1999	Kofax Image Products	Investor Group	36.0	%	30.8	%	32.3	%
05/21/1999	12/10/1999	ThermoSpectra (Thermo Instr.)	Thermo Instrument Systems Inc.	39.1	%	43.8	%	61.0	%
05/18/1999	08/16/1999	Varlen Corp.	AMSTED Industries Inc.	61.9	%	50.0	%	68.4	%
05/14/1999	10/29/1999	Kentek Information Systems Inc.	Investor Group	8.7	%	8.7	%	18.4	%
05/12/1999	06/21/1999	Optek Technology Inc.	Dyson-Kissner-Moran Corp.	29.9	%	47.8	%	81.3	%
05/07/1999	09/29/1999	Instron Corp	Kirtland Capital Partners	36.4	%	29.4	%	31.3	%

(a)

Source: SEC Filings or Press Releases of target or acquiror.

(b)

Premiums calculated relative to October 13, 2000, the date of the initial offer of $14.00 per share. Initial offer was rejected, offer of $18.00 was accepted on December 11, 2000.

40

PREMIUMS PAID IN RECENT TECHNOLOGY GOING PRIVATE TRANSACTIONS^(a)

Recent Technology Going Private Premiums Paid

				Premiums Paid to Market:
Announce Date	Closing Date	Target Company	Acquiring Company	1 day prior		1 week prior		1 month prior
05/05/1999	09/17/1999	Enterprise Software Inc.	LiveWire Ventures L.L.C.	23.3	%	25.4	%	49.5	%
05/03/1999	08/24/1999	Cellular Commun of Puerto Rico	Investor Group	24.2	%	12.9	%	7.3	%
04/05/1999	07/22/1999	BancTec Inc.	Welsh Carson Anderson & Stowe	42.3	%	27.0	%	23.8	%
03/15/1999	05/30/1999	Haskel International Inc.	Investor Group	42.3	%	49.6	%	51.8	%
03/08/1999	06/24/1999	Analysis & Technology Inc.	Anteon Corp.	18.9	%	16.2	%	23.8	%
02/17/1999	08/06/1999	Equitrac Corp.	Investor Group	25.5	%	31.2	%	35.6	%
			High	220.0	%	322.3	%	309.8	%
			Median	32.3	%	30.8	%	46.9	%
			Mean	48.3	%	53.9	%	63.6	%
			Low	(6.5	%)	0.0	%	6.9	%

(a)

Source: SEC Filings or Press Releases of target or acquiror.

41

DISCOUNTED CASH FLOW ANALYSIS

•

SG Cowen did not perform a discounted cash flow analysis for Blue because Blue Management informed SG Cowen that because of the nature of the Company and its business there were no reliable projections for Blue beyond calendar year 2002

42

APPENDICES

43

QUARTERLY FINANCIAL STATEMENTS

44

BLUE HISTORICAL QUARTERLY FINANCIALS^(a)(b)

Historical Operating Results
(US$ in millions, except per share data)

	CY 1999															CY 2000															CY 2001
Fiscal Year end December
	Q1A			Q2A			Q3A			Q4A			CY1999A			Q1A			Q2A			Q3A			Q4A			CY2000A			Q1A
Pro Forma Revenue(c)	$	2.5		$	5.4		$	7.0		$	8.4		$	23.3		$	8.9		$	10.2		$	10.9		$	12.3		$	42.3		$	13.6
Chrysler Equity Subscriptions		—			—			—			—			—			—			0.0			0.1			0.7			0.8			1.3
Revenue(d)	$	2.5		$	5.4		$	7.0		$	8.4		$	23.3		$	8.9		$	10.2		$	10.8		$	11.6		$	41.5		$	12.3
Cost of Revenue		0.5			1.1			1.5			1.7			4.8			1.8			2.2			2.1			2.2			8.3			2.5
Gross Profit		1.9			4.3			5.5			6.7			18.5			7.1			8.0			8.7			9.4			33.2			9.8
Operating Expenses:
Sales & Marketing		1.7			2.4			3.7			3.8			11.6			4.3			5.2			6.1			6.3			21.8			7.0
General & Administrative		1.8			2.7			3.9			4.8			13.2			3.8			5.0			5.5			5.5			19.8			6.1
Research & Development		0.4			0.6			0.8			1.3			3.2			1.3			1.7			2.2			2.5			7.7			3.2
Operating Income		(1.9	)		(1.4	)		(2.9	)		(3.3	)		(9.5	)		(2.2	)		(3.9	)		(5.2	)		(4.9	)		(16.2	)		(6.4	)
Interest and Other Income/(Expense)		0.0			(0.5	)		(0.2	)		0.2			(0.5	)		0.2			0.2			0.2			0.1			0.7			0.2
Net Income Before Taxes		(1.9	)		(1.9	)		(3.1	)		(3.1	)		(10.0	)		(2.0	)		(3.6	)		(5.0	)		(4.8	)		(15.4	)		(6.2	)
Provision for Taxes		0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0
Net Income After Taxes	$	(1.9	)	$	(1.9	)	$	(3.1	)	$	(3.1	)	$	(10.0	)	$	(2.0	)	$	(3.6	)	$	(5.0	)	$	(4.8	)	$	(15.4	)	$	(6.2	)
Diluted EPS	$	(0.18	)	$	(0.17	)	$	(0.21	)	$	(0.18	)	$	(0.74	)	$	(0.12	)	$	(0.21	)	$	(0.28	)	$	(0.25	)	$	(0.86	)	$	(0.31	)
Fully Diluted Shares Outstanding		10.6			11.4			14.9			16.9			13.5			17.1			17.4			17.8			19.4			17.9			20.3
Net Revenue growth rate (Q/Q) sequential		8.5	%		120.5	%		30.3	%		18.8	%		—			6.4	%		14.4	%		5.7	%		7.6	%		—			5.9	%
Net Revenue growth rate (Y/Y)		127.3	%		330.0	%		328.0	%		270.4	%		272.9	%		363.4	%		188.5	%		152.9	%		138.5	%		78.1	%		37.8	%
Gross Margin		78.0	%		79.7	%		78.6	%		80.0	%		79.3	%		80.1	%		78.5	%		80.4	%		81.0	%		80.0	%		79.7	%
Operating Margin		(79.4	)%		(26.3	)%		(40.6	)%		(39.0	)%		(40.8	)%		(24.4	)%		(38.0	)%		(48.0	)%		(42.6	)%		(39.0	)%		(52.2	)%

(a)

Source: Blue Form 10-Q and 10-K SEC filings.

(b)

Excludes Stock-based Compensation, Amortization of Intangibles and other extraordinary items.

(c)

Pro Forma Revenue includes amounts relating to the fair value of warrants and common stock issued pursuant to the DaimlerChrysler Services Agreement.

(d)

Revenue is net of amounts relating to the fair value of warrants and common stock issued pursuant to the DaimlerChrysler Services Agreement which is consistent with Generally Accepted Accounting Principles ("GAAP").

45

BLUE PROJECTED BASE CASE QUARTERLY FINANCIALS^(a)(b)

Projected Operating Results
(US$ in millions, except per share data)

	CY 2001															CY 2002
Fiscal Year end December
	Q1A			Q2E			Q3E			Q4E			CY2001E			Q1E			Q2E			Q3E			Q4E			CY2002E
Pro Forma Revenue(c)	$	13.6		$	14.2		$	15.3		$	17.2		$	60.3		$	18.0		$	18.9		$	20.3		$	22.3		$	79.5
Chrysler Equity Subscriptions		1.3			1.5			1.6			1.7			6.1			1.7			1.7			1.7			1.7			6.6
Revenue(d)	$	12.3		$	12.7		$	13.7		$	15.4		$	54.2		$	16.3		$	17.3		$	18.7		$	20.6		$	72.9
Cost of Revenue		2.5			2.6			2.6			2.9			10.6			3.1			3.3			3.5			3.5			13.3
Gross Profit		9.8			10.2			11.1			12.6			43.6			13.3			14.0			15.2			17.1			59.6
Operating Expenses:
Sales & Marketing		7.0			6.8			7.1			7.0			28.0			7.3			7.1			7.1			7.0			28.5
General & Administrative		6.1			6.3			6.4			6.6			25.4			6.5			6.7			6.7			6.8			26.7
Research & Development		3.2			3.3			3.3			3.5			13.3			3.6			3.7			3.6			3.6			14.4
Operating Income		(6.4	)		(6.3	)		(5.8	)		(4.6	)		(23.1	)		(4.1	)		(3.4	)		(2.1	)		(0.3	)		(9.9	)
Interest and Other Income/(Expense)		0.2			(0.0	)		(0.1	)		(0.1	)		0.1			(0.1	)		0.0			0.1			0.2			0.2
Net Income Before Taxes		(6.2	)		(6.4	)		(5.8	)		(4.6	)		(23.0	)		(4.2	)		(3.4	)		(2.0	)		(0.1	)		(9.7	)
Provision for Taxes		0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0			0.0
Net Income After Taxes	$	(6.2	)	$	(6.4	)	$	(5.8	)	$	(4.6	)	$	(23.0	)	$	(4.2	)	$	(3.4	)	$	(2.0	)	$	(0.1	)	$	(9.7	)
Diluted EPS	$	(0.31	)	$	(0.31	)	$	(0.29	)	$	(0.23	)	$	(1.13	)	$	(0.21	)	$	(0.16	)	$	(0.10	)	$	(0.01	)	$	(0.47	)
Fully Diluted Shares Outstanding		20.3			20.4			20.5			20.5			20.4			20.5			20.5			20.5			20.5			20.5
Net Revenue growth rate (Q/Q) sequential		5.9	%		3.7	%		7.8	%		12.5	%		—			5.6	%		5.8	%		8.2	%		10.4	%		—
Net Revenue growth rate (Y/Y)		37.8	%		24.9	%		27.4	%		33.2	%		30.7	%		32.9	%		35.6	%		36.1	%		33.6	%		34.5	%
Gross Margin		79.7	%		79.8	%		80.8	%		81.3	%		80.4	%		81.2	%		81.1	%		81.4	%		82.9	%		81.7	%
Operating Margin		(52.2	)%		(49.7	)%		(42.0	)%		(29.5	)%		(42.6	)%		(25.4	)%		(19.6	)%		(11.2	)%		(1.5	)%		(13.6	)%

(a)

Quarter ending March 31, 2001 per Blue Form 10-Q for the period ended March 31, 2001. Projections per Blue Management's Base Case scenario as of May 24, 2001.

(b)

Excludes Stock-based Compensation, Amortization of Intangibles and other extraordinary items.

(c)

Pro Forma Revenue includes amounts relating to the fair value of warrants and common stock issued pursuant to the DaimlerChrysler Services Agreement.

(d)

Revenue is net of amounts relating to the fair value of warrants and common stock issued pursuant to the DaimlerChrysler Services Agreement which is consistent with Generally Accepted Accounting Principles ("GAAP").

46

BLUE BALANCE SHEET^(a)

Blue Balance Sheet
(US$ in millions)

		March 31, 2001			December 31, 2000
Cash and Cash Equivalents		$	10.4		$	16.6
Accounts Receivable			10.4			8.9
Other Current Assets			1.5			1.7
	Total Current Assets		22.3			27.1
Capital Assets, net			15.1			14.3
Intangible Assets, net			14.4			15.6
Other Assets			0.7			1.0
	Total Assets	$	52.5		$	57.9
Accounts Payable & Accrued Liabilities		$	2.7		$	4.7
Accrued Liabilities			3.1			2.2
Deferred Revenues			6.0			4.7
Notes Payable			—			0.3
Current Portion of Software Financing Contract			0.6			1.1
Current Portion of Capital Lease Obligations			0.7			0.9
	Total Current Liabilities		13.1			13.8
Deferred Revenues			1.3			1.3
Software Financing Contract			0.3			0.3
Capital Lease Obligations			0.2			0.3
	Total Non-current Liabilities		1.7			1.9
Common Stock			0.2			0.2
Additional Paid-In Capital			124.1			124.0
Deferred Equity Subscriptions			(11.6	)		(13.0	)
Deferred Equity Expenses			(0.7	)		(2.2	)
Notes Receivable from Shareholders			(0.1	)		(0.1	)
Accumulated Deficit			(74.2	)		(66.7	)
	Shareholders' Equity		37.7			42.3
Total Liabilities and Shareholders' Equity		$	52.5		$	57.9

(a)

Balance Sheet data per Blue Form 10-Q for the periods ended March 31, 2001 and December 31, 2000.

47

FORM OF SG COWEN FAIRNESS OPINION

48

QuickLinks

Project Colors Presentation to the Special Committee of the Board of Directors June 2, 2001
INTRODUCTION
TABLE OF CONTENTS
TRANSACTION OVERVIEW
CERTAIN TRANSACTION BACKGROUND INFORMATION
TRANSACTION SUMMARY
TRANSACTION PREMIUMS ANALYSIS^(a)
ANTICIPATED TIMETABLE
BLUE OVERVIEW
BLUE OVERVIEW (SEATTLE, WA)^(a)
PRODUCTS AND SERVICES^(a)
PRODUCTS AND SERVICES^(a)(b)
BLUE RECENT EVENTS^(a)
MANAGEMENT AND BOARD OF DIRECTORS^(a)
SUMMARY OWNERSHIP PROFILE^(a)
HISTORICAL STOCK PRICE PERFORMANCE^(a)
ACQUISITION / DIVESTITURE HISTORY
FINANCIAL SUMMARY^(a)
INCOME STATEMENT
COMPARISON OF BASE CASE AND OPTIMISTIC CASE^(a)
BLUE PROJECTED CASH FLOW ANALYSIS
BLUE PROJECTED BALANCE SHEET ANALYSIS
BLUE SUMMARY CAPITALIZATION
VALUATION CONSIDERATIONS
TRANSACTION PREMIUMS ANALYSIS^(a)
IMPLIED MULTIPLES OFFERED VS. INDUSTRY TRADING MULTIPLES^(a)
SELECTED COMPANY ANALYSIS
IMPLIED MULTIPLES OFFERED VS. SELECTED M&A TRANSACTIONS^(a)
IMPLIED PREMIUMS OFFERED VS. SELECTED M&A TRANSACTIONS^(a)
SELECTED TRANSACTION ANALYSIS^(a)
IMPLIED PREMIUMS VS. RECENT TECHNOLOGY GOING PRIVATE TRANSACTIONS^(a)
PREMIUMS PAID IN RECENT TECHNOLOGY GOING PRIVATE TRANSACTIONS^(a)
DISCOUNTED CASH FLOW ANALYSIS
APPENDICES
QUARTERLY FINANCIAL STATEMENTS
BLUE HISTORICAL QUARTERLY FINANCIALS^(a)(b)
BLUE PROJECTED BASE CASE QUARTERLY FINANCIALS^(a)(b)
BLUE BALANCE SHEET^(a)
FORM OF SG COWEN FAIRNESS OPINION