About Naveen Jain....also some of Tammy Halstead's experience....from February 8, 2000...also looks like the analysts really hadn't counted on the economy falling over the cliff either...
bolding mine..
From Bloomberg News, February 8, 2000
InfoSpace Seen Rising on Demand for Cell-Phone Web Services
Redmond, Washington, Feb. 8 (Bloomberg) -- InfoSpace shares have climbed more than 40-fold since the Internet content and services provider first sold stock 14 months ago. Analysts predict it's just the beginning.
InfoSpace may rise another 20 percent to 200 over the next year as it taps soaring demand from cellular-phone users for electronic-mail and online shopping services, said analyst James Preissler of PaineWebber Inc., who rates the shares ''buy.''
Founded and led by former Microsoft manager Naveen Jain, InfoSpace has developed technology that allows wireless phone users to check and trade stocks on line, among other things. Earlier this month, GTE Corp.'s wireless division agreed to use that technology. InfoSpace's range of services and alliances are unrivaled by competitors, investors and analysts say.
''He's locking up the distribution channels, said Peggy Ledvina, an analyst at Dain Rauscher Wessels, who has a ''strong buy'' rating on the stock. ''It's a masterstroke.''
Redmond, Washington-based InfoSpace sold shares to the public in December 1998 at $15 each and since then has twice split its stock 2-for-1. The company, with a market value of about $16.1 billion, is planning another 2-for-1 split in March.
InfoSpace shares rose 10 1/8 to 167 1/4 today. Merrill Lynch & Co. analyst Henry Blodget sees the shares rising to 175, though didn't specify a time period. He has a ''buy'' rating on InfoSpace.
U.S. Bancorp Piper Jaffray Co. analyst Safa Rashtchy said InfoSpace shares could double over the next year. Rashtchy, who rates the company ''strong buy,'' didn't provide a specific price target.
Wireless Services
InfoSpace offers Yellow Page directories and maps to Web sites and marketing services to online merchants, which are resold through SBC Communications Inc. and other phone companies. Wireless services, such as online shopping, stock monitoring and electronic messaging, are the third area and seen as the real future for InfoSpace, analysts say.
About a billion cellular phones will be in use by 2003 and half of them will be able to access the Internet, Jain said. InfoSpace expects to get an average of $2 a month in subscription fees from each user of a Web cell phone, he said in an interview.
Fees for online shopping, banking and other services will be shared between InfoSpace and the carrier, he said.
''There's no reason this won't be a trillion dollar company,'' said Jain, Infospace's president and chief executive.
Asked how soon the company could achieve that, he said: ''A lot faster than it took Microsoft to make a half trillion.'' That took 24 years.
Losses Expected
Still, InfoSpace will see its profit from operations turn into a loss in the March and June quarters because of recent acquisitions, analysts said. The company is buying 80 percent of wireless Internet company Saraide and all of electronic-commerce software maker Prio Inc.
InfoSpace will lose 12 cents a share in both quarters, according to the average estimate of analysts polled by First Call/Thomson Financial. In the December quarter, the company earned 10 cents a share, excluding amortization of goodwill and acquisition costs.
Investors appear unruffled
''Investors focus primarily on growth and revenue,'' said David Brady, a fund manager at Stein Roe & Farnham, which owns shares in InfoSpace. ''Investors, money managers are not real worried about the bottom line. They're more concerned about taking business from competition.''
The competition, though, isn't standing still.
Oracle Corp. said it plans to spin off its so-called Portal-to-Go division to profit from the global market for online services for cell phones and other wireless devices.
Phone.com Inc. makes software that lets users access the Internet from cell phones, and Sprint Corp.'s wireless unit recently agreed to use it. Phone.com said today that it's buying Paragon Software Ltd., which makes a program that allows users to transfer online calendar data to their cell phones.
Nextel Communications Inc. is developing an online service for cell-phone users with the help of $600 million from Microsoft.
InfoSpace remains ahead because of the breadth of its services, which also includes online calendars, analysts said.
''There isn't any direct competition,'' said Jack Ripsteen, analyst at Hambrecht & Quist, who rates InfoSpace a ''buy.'' ''They have a pretty complete package.''
Power Sharing
Jain needs to share more power for InfoSpace to succeed, said investors and analysts.
Jain, who grew up in Delhi, India, came to the U.S. in 1982. An energetic software engineer, he decided at the age of 36 that he wanted to make a billion dollars by the age of 40. He left his job at Microsoft, founded InfoSpace and within four months was a billionaire.
''Making a billion dollars can't be that hard,,'' Jain recalled saying when he left Microsoft. ''Bill (Gates) has done it a hundred times, and Bill can't be a hundred times smarter than me.''
He financed InfoSpace with $1.5 million of family money and that of friends, publicly eschewing venture capital.
InfoSpace employs about 250, up from 15 at the beginning of 1998. That will double to 500 with the Prio and Saraide acquisitions.
Senior Management
Jain has brought in professional managers to replace family members, though the executive team remains in flux.
Of the senior managers, three have been in their jobs for five months, one for 12 months and the chief financial officer is an acting one. Tammy Halstead will continue as acting CFO until she proves herself or a better candidate is found, Jain said.
''They need to get a strong, proactive CFO, who's visible to the street,'' said Preissler.
Still, Jain's missionary zeal could keep needed talent at bay.
''When you have that powerful a personality other powerful personalities can be put off,'' said Bill Miller, a partner at Olympic Venture Partners, a venture capital firm in Kirkland, Washington. He was Jain's boss at Microsoft. |
