Infospace Annual Stockholders Meeting 5/10/04
Here's my impression of the meeting based on my notes. I haven't checked with other contributors and welcome insights and corrections. When in doubt ask Investor Relations or better yet check to see if they had a recording on the web. I can't catch everything because I can't write that quickly.
PRE-MEETING
This did not start off well. The hotel where they were holding the meeting changed its name May1st so I spent a half-hour driving around looking for the place. I missed the notice of the revised name. When I finally got in they had the typical signs, and amenities so it all looked familiar. The food and such were good but I wouldn't go to the meeting just to get free coffee, tea or pastries. (Of course the Starbucks meeting is a completely different experience, but I digress.) In what I considered an odd move they didn't let us in until about ten or five minutes before the meeting started. As a result there were a lot of people standing in the hallway balancing a hot beverage and a sticky bun. When we finally got in there were about 150 seats and about half of them were filled. As is typical for INSP there were very few suits and most of them sat up front.
FORMAL MEETING
The CEO did introductions and John Hall (what's his position?) ran through the official meeting in very few minutes. Everything passed. It almost took longer for him to read the legalese in the "Forward Looking Statement".
BUSINESS PRESENTATION
The CEO got back up and went through a short presentation of the business.
In 2003 they sold Payment Solutions to concentrate on Search & Directory and Mobile. They feel that they have improved their products and service. Some good data were a 38% decrease in operating costs, 15% increase in revenue, $24 million increase in cash, profitability in the second half of the year.
Currently they have had 3 quarters of positive income, $380 million in cash and no debt.
He briefly described the metasearch operation and how it generates ad revenues through click-throughs. They had 10% to 12% of the online directory business and the acquisition of Switchboard in the second half of 2004 will give them a 20% market share. That should make them a co-leader. This division has about a 40% profit margin.
The mobile market is seeing rapidly changing revenue growth. They reach 85% of the North American subscribers. Ring tones are the big app. They were quiet about the details for competitive reasons. I think they claimed a 60% market share.
Financial details for 1Q04 were 60% revenue growth relative to 1Q03 and 23% growth relative to 4Q03. EBITDA growth was 63% relative to 1Q03.
Goals for 2004 were to expand internationally, continue acquisitions, retain and attract good employees, maintain leadership, and keep a focus on long term revenue growth.
That was the end of his presentation. It took less than twenty minutes.
QUESTIONS & ANSWERS (paraphrased because I can't write fast enough.)
? The Jain appeals may run on for months or years.
? May is the month for tech conferences. The two most recent ones in San Francisco were well attended and I think he said that the attendees were not very familiar with Infospace. Infospace has seen an increase in institutional ownership.
That was it. By the time I walked out of the room and out of the hotel it was less than 23 minutes since the start of the meeting. I think that sets a record.
MY SUMMARY
The year to year numbers look good and the profit margins would not get turned down by most businesses. Infospace has survived an astonishing economy, stock market, and internal history. They shouldn't be going away soon.
MY CONCLUSION
The meeting produced very little to work from. There were only two questions and neither had much of an answer. Some meetings conclude with me wanting to rummage around the house looking for more money to invest in the company. This meeting left me unenthused. Afterwards I realized I should have asked about the presentations they are making at the investor conferences. Are they the same, or does management put on a more enthusiastic and compelling story to that crowd? Anybody out there attend one of those shows?
DISCLAIMER
LTBH and holder of GNET and then INSP stocks from early 1999. Ah those were the days. This was our purest internet play and it has become more information or telecom. We continue to hold out of habit. I admit to a personal fascination with this story. The changes in these years have been dramatic. The CEO styles from GNET to Naveen Jain to Jim Voelker are so varied that I sometimes wonder what the employees think. Someday we'll sell when we rearrange our portfolios. Until then I get to watch the show go by. |
