InfoSpace to bring Switchboard on board
news.com.com
Last modified: March 26, 2004, 9:54 AM PST
By Dinesh C. Sharma
Special to CNET News.com
InfoSpace on Friday announced that it plans to acquire Switchboard, a provider of online yellow pages listings, for about $160 million in cash.
The Internet company said that the takeover would boost traffic to its online directories and allow it to enter the market for local searches. InfoSpace plans to pay $7.75 per share for Switchboard and expects the deal to close in the second half of the year.
The big players in the search industry have been busy expanding their efforts in local search. This month, Google unveiled a service designed to let users find maps, locally relevant Web sites and listings from businesses in any area. Rival Yahoo, meanwhile, introduced its SmartView service, which incorporates points of interest such as restaurants and automated teller machines into local maps and which draws on Yahoo's "Yellow Pages" listings.
InfoSpace doesn't have nearly the heft of those giants, but the acquisition should extend its reach significantly, according to the company. The addition of Switchboard to its own sites and those of its distribution partners will account for nearly a quarter of all online yellow pages searches, InfoSpace said, citing figures from ComScore/Media Metrix.
"Through this acquisition, we nearly double our share of online directory traffic, gain a proven technology platform and add several new and important partner relationships," Jim Voelker, CEO of Bellevue, Wash.-based InfoSpace, said in a statement. "Combined, we assume a leadership role in a market growing as fast as Web search and position ourselves to leverage our complementary assets in Web search and online directory."
If the deal closes around July 1, InfoSpace expects that Westborough, Mass.-based Switchboard will contribute about $10 million to $12 million in revenue and $4 million to $5 million in search and directory income for the second half of the year. The deal is subject to approval by Switchboard's shareholders and regulatory authorities.
At midday trading on the Nasdaq, Switchboard shares were up 27 percent, or $1.62, at $7.67. InfoSpace shares also took off, trading up 14 percent, or $4.54, to $36.29. |
