Hey Kis, it appears your buddy Jain, up in Seattle is making a fuss.LOL
>InfoSpace team deposed
by Greg Heberlein
Seattle Times business reporter
Pedro Perez / The Seattle Times
Russell Horowitz, right, founder of Go2Net, was all smiles when his company was acquired by InfoSpace. Horowitz, who has now left the company, is shown here with Naveen Jain, at left, and Arun Sarin.
When InfoSpace talks, people listen. That's the bad news. The good news may take a while to become evident.
The Bellevue king of data for wireless and online applications said yesterday the management team it enthroned less than a year ago has been dethroned. That announcement caused consternation among Wall Street analysts. It also stripped more than a half-billion dollars in stock value from shareholders' pockets.
The stock told the story. It plunged $1.88, or 21 percent, to $7.03. That made it the Nasdaq's 10th-worst stock yesterday. Volume of 29.6 million shares was more than three times the daily norm of 8.6 million shares. With 315 million shares in investor hands, the move meant a one-day shrinkage of $590 million in value.
"No matter how you spin it, when you have three or four top people leave as you're expanding your business model, that's not a good sign," said Matt Adams, a research analyst with Epoch Partners, a San Francisco investment banker. Adams and others wondered whether the dramatic changes are tied to next Monday's release of InfoSpace's financial results.
Here were the big moves:
Founder and Chairman Naveen Jain returns as chief executive, replacing Arun Sarin, who becomes vice chairman. Sarin, in a much ballyhooed announcement, joined InfoSpace last April.
Rand Rosenberg, chief financial officer since June, departed. Tammy Halstead, the interim CFO before Rosenberg's hiring, replaced him.
Russell Horowitz, Go2Net founder who became chief operating officer in October, when InfoSpace's acquisition of Go2Net was completed, exited. Ed Belsheim, senior vice president and general counsel, succeeded Horowitz.
"We have a tremendous management team in place," said Jain, best known for his Microsoftlike work ethic, not to mention his hyperbole. "The depth of the management team is so deep we can go down three levels deep and never have a hiccup."
Adams said he still liked the stock, because it is cheap, but the absence of Sarin in an everyday role is damaging. Sarin, formerly a senior executive at Vodafone Airtouch, was InfoSpace's key link to the wireless side of the business.
Sarin said as a board member he'll do anything to help InfoSpace. But he and Rosenberg both made it clear they could not continue to work on a daily basis in Seattle while maintaining families in California's Bay Area.
"If we find anyone of the caliber of Arun," Jain said, "we'll make sure this person is in Seattle six days a week and 16 hours a day."
Adams' concern was the company went to some trouble in 2000 to develop a management team for the years ahead. Now, it turns back the calendar and puts Jain and his old team in place.
"The company is reducing its management strength," Adams said. "That's not a positive."
Horowitz's move, from COO to consultant, was a reflection of his success, Jain said.
"Russ Horowitz has done a great job of integrating Go2Net with InfoSpace," Jain said. "Now he will be helping us build and grow our broadband business. It will be best for him to step down to demonstrate it is one company, one leadership, one vision."
At InfoSpace it may be that the more things change, the more they stay the same. Except for the stock price. At the peak of the Internet mania last March, InfoSpace fetched $138.50. |
