Correction to #reply-342: GiantBear's website is still up: giantbear.com
Infospace has purchased one of their direct competitors in the wireless space. GiantBear, with all due respect, arrived at least two years late to the wireless scene. It looks like their amount of paid-in capital from venture financings was around $50 million. The last cash infusion was made more than a year ago. I presume they sold because of funding problems.
I was perusing their press releases to see what I could learn about the business relationships Infospace will accrue from the transaction both "here and abroad". The only really interesting tidbits I discovered were a list of the wireless carriers in the U.S. and Carribbean using GiantBear's wireless content and delivery platform compiled earlier this year and appearing in GiantBear's 12 February 2001 press release: "Centennial de Puerto Rico joins Dobson Cellular, Price Communications, Rural Cellular Corp. and Hargray on GiantBear's roster of participating wireless carriers." They are all small in scale. Here's a list of their names and what I was able to learn (without too much trouble) about their subscriber numbers as reported at various times in 1H2001:
Dobson Cellular 700,000
Price Communications (560,000+ sold to Verizon in 12/01)
Rural Cellular 600,000
Hargray ? (operates along the SC and GA coast)
Centennial Communications Puerto Rice 200,000
Infospace has acquired new wireless carrier clients with 2 million+ wireless subscribers. There appears to be no indication how many of these subscribers have converted to wireless internet use so far. Additionally, GiantBear appears to have some interesting niche technology, a little of which Infospace emphasized in their press release, and also some SMS relationships with other wireless carriers not mentioned in the press release, much like Infospace's SMS outsourced relationship with certain European carriers like Orange for which it does not provide content. The most notable of these clients appears to be Telecorp. Also, early last year, GiantBear acquired a streaming audio company called Savos. The import of Savos's technology to Infospace is unclear to me at this time.
(http://www.giantbear.com/pressroom/pr_03_20_01.htm)
GiantBear isn't worth anything as a stand alone company. It would seem to me that their limited intellectual property is worth far more in the hands of a company, like Infospace, that could truly leverage its potential over a substantial user base. I'll guess Infospace paid no more than $10 million for it, if that much. In any event, you can bet that the price was right and that Infospace probably was the only bidder, as with the Excite transaction, and that the transaction will probably be the good old fashioned type--immediately accretive to earnings per share. I also speculate that the employees Infospace will gain as a result will prove to be the most important aspect of the transaction. Believe it or not, there are actually a number of other competitors to Infospace in the wireless content and platform delivery business that are, or perhaps were, in worse shape than GiantBear. It's always nice to be able to purchase one of your primary competitors from the brink of insolvency, eh? (At times like these it's really nice to have an outsized cash hoard to be able to make such purchases now that the price is really, really right!) |
