Agreed Sy....and here's what INSP's home newspaper says...Notice NO mention of VV, Paul Allen, nor Bill Savoy...WHY?????
Tuesday, February 13, 2001, 12:00 a.m. Pacific
InfoSpace disappoints analysts
seattletimes.nwsource.com
by Sharon Pian Chan
Seattle Times technology reporter
Arun Sarin
After a month of layoffs, revolving-door management and a reeling stock price, Internet content provider InfoSpace had promised a revised financial outlook and revised company strategy yesterday. But coupled with news that former Chief Executive Arun Sarin was resigning from the board, the new numbers did little to lift spirits.
The Bellevue company's new guidance numbers for the year are a pro forma loss until the third quarter, totaling a 5-cent pro forma loss for the year. Those numbers were better than the guidance numbers it gave when announcing its fourth-quarter earnings last month - a 14-cent loss on $240 million revenues for the year - but still far from what it was projecting three months ago. Then, the company had predicted 15-cent profits a share and $360 million in sales.
InfoSpace approximated 20 to 25 percent of the year's revenue to come from licensing content and services to wireless carriers, another 20 to 25 percent from selling wireless and Internet services to merchants and the other 50 to 60 percent from its consumer business.
Most analysts were disappointed with the company's vague projections.
"The visibility on future revenue streams remains pretty cloudy," said Peter Friedland, an analyst for W.R. Hambrecht & Co. "I didn't get a lot of incrementally positive information."
Mostly, Chief Executive Naveen Jain just repeated his mantra of "de-emphasizing" the company's consumer business, an area in which he doesn't see much growth potential.
Yesterday he went into slightly more detail, explaining that InfoSpace would not invest in growing its business-to-consumer sites like MetaCrawler and SiliconInvestor and instead focus on licensing the underlying technology to other businesses.
For example, instead of investing money to attract users to Go2Net's PlaySite.com, the company would seek partnerships similar to the one it struck with Hasbro, in which Hasbro licensed the technology to build its own site.
The company's efforts will now be focused on growing its wireless, commerce and broadband business, the last of which will not bring in money until 2002.
News that Sarin was severing ties with InfoSpace deflated expectations even more. Sarin had been recruited from Vodaphone to boldly lead the company into wireless. "It's surprising that he will leave just a few weeks after he stepped down," said Safa Rashtchy, analyst for U.S. Bancorp Piper Jaffrey. "It was expected he would stay active."
Sarin's departure is the latest in a long string of executive flights. Since the beginning of this month, most of the principals who came over from Go2Net have stepped down. Go2Net co-founders Russell Horowitz, John Keister and former Go2Net Chief Financial Officer Rick Thompson have filed to sell a total of more than 6 million shares of InfoSpace stock since they left.
Add to that the 250 employees the company laid off last week. In yesterday's conference call, Jain said the layoffs would save the company $20 million annually and a one-time charge of $1 million, numbers which analysts were pleased with.
"Still, I can't say the image of the company has improved from this call," said Rashtchy. "When everyone digests all of this, it won't bode well for InfoSpace." |
