INFOSPACE.COM REVENUES MORE THAN QUADRUPLED RESULTING IN A PRO FORMA PROFIT OF $0.06 REVENUES GROW TO $10.1 MILLION POWERED BY STRONG SALES in Its Consumer, Merchant and Wireless Services; Committed Revenue Backlog of $38 Million Through Fiscal 2000; Gross Margins Increase to 85%
PR NEWSWIRE - October 28, 1999 16:00
REDMOND, Wash., Oct 28, 1999 /PRNewswire via COMTEX/ -- InfoSpace.com (Nasdaq: INSP), a leading provider of infrastructure services for consumers, merchants and wireless devices, today announced that third quarter revenues grew fourfold to $10.1 million fueled by the success of its wireless, merchant and consumer services. This is a 302% increase compared to the $2.5 million reported in the comparable quarter of 1998 and a 50% increase quarter over quarter.
(Photo: newscom.com ) InfoSpace.com earned a net profit of $3.1 million, or $0.06 cents per diluted share, excluding acquisition related expenses and amortization. This compares to a loss of ($600,000), or ($0.02) cents per diluted share for the same period last year. Including these expenses, InfoSpace.com earned a net profit of $1.3 million, or $0.02 cents per diluted share for third quarter 1999.
"We had a totally awesome quarter," said Naveen Jain, chairman and CEO, InfoSpace.com. "We focused on hot growth areas such as wireless and merchant services that contributed to our record growth. We have only just begun to capitalize on the opportunities to provide more wireless services to carriers and device manufacturers, merchant services to regional bell operating companies and merchant banks, and consumer services to portals and affinity sites.
"Our committed revenue backlog of $38 million through fiscal year 2000 gives us visibility in forecasting revenues for future periods," continued Jain. "Our ability to produce a profit this quarter while sustaining rapid revenue growth proves that we are executing on our aggressive growth strategy while controlling costs."
Wireless Services Wireless services is the fastest growing area for InfoSpace.com. The Company is making significant progress in executing its "InfoSpace in every space" strategy. During the quarter, major wireless carriers and device manufacturers launched new products using InfoSpace.com's wireless services with more products and services to be announced soon. This is in addition to the existing products that have been using InfoSpace.com's wireless services including alphanumeric pagers, personal digital assistants and existing digital cellular phones for the last three years.
This quarter, Sprint, the nation's largest PCS provider with more than 4 million customers nationwide, launched its PCS Wireless Web using InfoSpace.com's wireless directory services. BellSouth Corp. announced that it teamed with InfoSpace.com to provide wireless Internet portal services through global WAP technology during BellSouth's trial of Internet-enabled cellular phones.
InfoSpace.com already has relationships with the leading companies in the wireless market including: -- Wireless carriers such as AT&T, Sprint and BellSouth. -- Wireless device manufacturers such as Nokia, Ericsson and Neopoint. -- Wireless software application developers such as Phone.com, AvantGo, JP Systems and WolfeTech.
"The rapid adoption of our next-generation wireless services demonstrates our early market leadership in this area," said Jain. "We have been able to quickly and easily extend our existing platform to support new formats such as WAP and HDML to offer advanced wireless portal services. These are in addition to the services we already provide on existing devices such as alphanumeric pagers and personal digital assistants for over three years."
InfoSpace.com Wireless Web services are comprised of a comprehensive, integrated suite of wireless portal services that provide mobile users relevant content including real-time stock quotes and traffic reports, commerce capabilities that include price comparison shopping, person-to person instant messaging, personalization capabilities and localization.
Localization, or location-based services, is a very important feature for mobile users because it enables them to eliminate time-consuming steps to query and find relevant information. For example, InfoSpace.com is the only company today providing location-based directory services that enable mobile users to search for information, such as finding the nearest Italian restaurant, and automatically delivers the locations and directions of the Italian restaurants closest in proximity to them at that time.
The flexibility of InfoSpace.com's wireless mobile platform and the breadth and depth of services offered gives the Company a notable advantage in the market by making it possible to easily customize and deliver services to meet the needs of each particular carrier, device manufacturer or software provider.
Merchant Services InfoSpace.com is making significant progress in executing its strategy to build one of the largest merchant networks on the Web. This merchant network consists of comprehensive end-to-end merchant services and an extensive merchant network that includes distribution partners such as regional bell operating companies (RBOCs), merchant banks and other local media networks.
"The local commerce opportunity is huge. Each year, $3.6 trillion in business is conducted through the 10 million local merchants, according to the Kelsey Group. Further, these local merchants spend at least $40 billion annually on promotions and Web-related activities," said Jain. "The relationships we have forged with the RBOCs and merchant banks who already work with the majority of these local merchants, has given us the head start in dominating this market." Infospace.com's merchant services include:
-- InfoSpace.com Page Express which enables local merchants to create
a Web presence.
-- InfoSpace.com StoreBuilder which allows local merchants to e-commerce-
enable their Web presence.
-- ActivePromotion which enables local merchants to create real-time,
dynamic and targeted product offers across InfoSpace.com's extensive
distribution network.
-- ActiveShopper which provides an open marketplace where consumers can
find, research and purchase products from our merchant network.
In addition, the Company is developing a Universal Shopping Cart that is designed to allow buyers to purchase multiple products from multiple merchants. The Company expects this to launch during the current quarter.
Today, InfoSpace.com announced that BellSouth will be the first RBOC to license and distribute ActivePromotion to thousands of its local merchants when it is launched this quarter. Momentum continues to build for InfoSpace.com's merchant services:
-- Over 250,000 local merchants use InfoSpace.com's merchant services.
-- Over 1,500 Web sites license InfoSpace.com's merchant services.
-- Over two million products are offered through InfoSpace.com's merchant
network.
-- 4 of the 5 RBOCs license and distribute InfoSpace.com's merchant
services to thousands of local merchants. InfoSpace.com continues to
build on these relationships, leveraging their expertise and merchant
relationships to help build one of the largest merchant networks on the
Web.
Consumer Services InfoSpace.com strengthened its leadership in providing consumer services to Web sites by signing 116 new key agreements during the quarter.
InfoSpace.com's affiliate network has grown from 1,800 to 2,100 portals and affinity Web sites, including 4 of the top 5 most trafficked sites on the Internet. The extensive affiliate network gives InfoSpace.com an unduplicated reach of over 86% of all Internet users and a duplicated reach of over 300%. The duplicated reach number represents that on average, over 86% of all Internet users visit three sites in the InfoSpace.com affiliate network. InfoSpace.com expects the duplicated reach to be the fastest growing metric as more sites use its consumer services.
One of the key affiliate agreements signed this quarter was CBS's iWon.com, a new Internet portal that is using InfoSpace.com's consumer services to integrate world-class search, content and functionality with the Internet's largest guaranteed cash giveaway.
InfoSpace.com also signed a wide-ranging new reseller agreement with Flycast. Flycast is using InfoSpace.com's merchant services to enable the over 1,400 sites in the Flycast Network to develop customized e-commerce storefronts and use ActivePromotion to promote their products across InfoSpace.com's distribution network. Additional services made available through Flycast's offerings include InfoSpace.com's consumer services such as yellow pages, white pages, auctions and classifieds.
InfoSpace.com expanded its relationship with Net2Phone by signing an agreement in which they agreed to pay InfoSpace.com $14.4 million for integration of Net2Phone's PC-to-phone technology and new unified messaging service in InfoSpace.com's consumer services.
Also during the quarter, InfoSpace.com launched services on the Disney/InfoSeek GO Network and the classifieds solution on AOL, AOL.com, Netscape Netcenter and Digital Cities.
InfoSpace.com's traffic from its affiliate network climbed to 1.62 billion page views for the quarter. InfoSpace.com continues to be ranked the number one directory service on the Web by a wide margin, according to Media Metrix. In addition, at 24 page views per visit, InfoSpace.com's consumer services provide the stickiest service on the Web today.
Acquisitions InfoSpace.com continues to pursue an aggressive growth strategy to enhance and expand on its consumer, merchant and wireless services. During the quarter, InfoSpace.com expanded its merchant services by signing a definitive agreement to acquire Toronto-based INEX Corporation, a provider of Internet commerce applications that deliver a complete, affordable, and easy-to-use solution for merchants to build, manage and promote online storefronts. The acquisition closed on October 14.
In addition, InfoSpace.com recently announced it signed a definitive agreement to acquire Seattle-based Union-Street.com. Union-Street.com provides portals, destination sites and enterprise businesses with a powerful, scalable, and easy-to-use suite of business to business services, such as private label e-mail, address book, calendar, personal home pages, chat and message boards. These interactive services help businesses increase traffic, strengthen the value of their brand on the Web and create direct marketing opportunities. This acquisition closed on October 14.
Today, InfoSpace.com announced it has agreed to acquire Redmond-based Zephyr Software Inc. and its wholly owned subsidiary Zephyr Software (India) Private Limited. Zephyr Software Inc. provides portal services for the Indian market. Zephyr India will become InfoSpace.com India, a wholly owned subsidiary of InfoSpace.com.
This acquisition is part of InfoSpace.com's global expansion strategy to leverage its business model, technology and relationships into emerging markets. InfoSpace.com India is InfoSpace.com's third international venture to be launched, following its joint venture with Thomson Directories Limited in the UK, TDL InfoSpace (Europe) Limited, and its wholly owned subsidiary InfoSpaceCanada.com.
Other news from the quarter: InfoSpace.com announced the addition of Kent Hellebust as senior vice president of business development and marketing -- Naveen Jain, CEO, honored as an Albert Einstein Technology Medal recipient -- Naveen Jain receives Asian American Pioneer of the Year award -- InfoSpace.com announced the recent promotions of Ellen Alben to senior vice president of Legal and Business Affairs and Randy Massengale to senior vice president of Human Resources. Both previously held the title of vice presidents at InfoSpace.com.
About InfoSpace.com, Inc. InfoSpace.com is a leading Internet information infrastructure company. InfoSpace.com provides enabling technologies and Internet services for consumers, merchants and wireless devices. InfoSpace.com's affiliate network consists of more than 1,800 Web sites. The Company's affiliates include AOL, Microsoft, Disney/InfoSeek's GO Network, NBC's Snap, Lycos, Go2Net Inc., DoubleClick, Dow Jones (The Wall Street Journal Interactive Edition) and ABC LocalNet, among others. In addition, the Company provides services to a network of Internet access devices including PCs, cellular phones, pages, screen telephones, television set-top boxes, online kiosks, and personal digital assistants. These include relationships with Acer America, AT&T Wireless, Nokia, Nextel, Sprint, Mitsui, Lucent, and @Home. |
