From PSBJ....SI mentioned....anyone know what the advertising brought into SI before the merger?
Also, the article says that the "consumer business
accounted for a little more than half of the company's revenues, and a large
portion of the losses" ............If the consumer portion of INSP brings in more than 50% of the revenues.....does anyone know what the dollar amount "large portion of the losses"...equals???
Also appears INSP had better do a REALLY good job of getting their new story out to not only Wall Street, ALL of the PR people, ALL the financial reporters, as well as the shareholders, LARGE and SMALL. SOON!!! Some of the folks just don't seem to be getting the story...
Exclusive Reports
From the February 9, 2001 print edition
seattle.bcentral.com
InfoSpace consumer sites won't fetch big bucks
M. Sharon Baker Staff Writer
The questions at beleaguered Info-Space Inc. loom large.
For instance, will anyone want The Useless Pages, or is the trivia Web site
totally useless? How about InfoSpace's free Web hosting service,
Hypermart.net? Or mega-search engine Metacrawler.com or search site
Dogpile.com?
Analysts say the consumer Web properties that Bellevue-based InfoSpace
appears anxious to shed - the sites it picked up in its $1.5 billion
acquisition of Go2Net Inc. last year - will most likely be sold as a group,
or languish until they're shut down.
But even if they can be sold, InfoSpace investors aren't likely to reap much
of a gain. The sites could go at bargain prices, given that Internet sites
which rely heavily on advertising are going out of business daily.
"It's a horrible market to be trying to sell anything right now," said
Charlene Li, research director of media entertainment at market researcher
Forrester Research in Cambridge, Mass. "And to say, 'Let's try to sell
something that's clearly a distant runner, one that's massively
unprofitable' - gee, there are pretty long odds that that's ever going to
happen in this environment."
"No one's buying anything, and there's little if any consolidation, which
leads me to believe (the sites) are worth very little right now," added Adam
Hamilton, an analyst with Seattle brokerage McAdams Wright Ragen.
Despite that prognosis, and a rocky two-week period that saw 250 layoffs, a
management shake-up and plans for restructuring, InfoSpace is far from a
dying dot-com.
The company has announced it is shedding its consumer operations to focus on
its wireless, broadband and merchant infrastructure businesses - which were
the core businesses before its merger last October with Seattle-based
Go2Net.
InfoSpace had sales of $214.6 million and a net loss of $279 million in
2000. It ended the year with cash of $368 million and no debt.
"The vultures aren't circling the way they are with Amazon," Hamilton said.
"They still have a good horse in a fast race, with their wireless and
broadband business."
InfoSpace founder Naveen Jain, who has been chairman, stepped back into the
chief executive role two weeks ago when the top post was vacated by Arun
Sarin, who said he wanted to stop commuting from his California home.
InfoSpace also lost Russ Horowitz and John Kiester, Go2Net's co-founders, as
well as chief financial officer Rand Rosenberg, in the latest moves.
As part of a restructuring, InfoSpace announced that its revenue would fall
by about a third, from an estimated $300 million to $200 million for 2001 as
the company moved out of the consumer business. The consumer business
accounted for a little more than half of the company's revenues, and a large
portion of the losses.
The recent moves sent InfoSpace's stock sinking to lows of $3.50 per share,
far from its 52-week high of $138.50 per share. Even after rebounding
slightly to $4.38, that share price gives the company a market
capitalization of $1.3 billion - a little less than the total value of the
$1.5 billion merger with Go2Net, which closed just four months ago.
e way management stepped down, the COO, CFO and CEO, associated with the
layoffs, it makes people wonder about the future of the company," Hamilton
said. "That's probably why the stock is trading low. But there's still a lot
of value there - unless there's something we don't know about."
InfoSpace plans to release further details of the restructuring plans on
Feb. 12, when it will also give revised financial estimates for this year
and next.
"InfoSpace is among the best-positioned companies to emerge from the current
market environment in an even stronger competitive position," said Ed
Belsheim, InfoSpace's new chief operating officer, said in a prepared
statement. "We have been working hard and look forward to discussing our
outlook on a return to pro forma profitability this year."
Li of Forrester said Go2Net's destination site - which features the
Metacrawler search engine, the Useless Pages, financial chat site Silicon
Investor as well as games, news and sports - has always been a laggard. Any
purchaser would most likely be interested in buying the company's 12 million
plus visitors. But many of those visitors might flee if they're merged into
yet another portal, she said.
"I'm sure Disney thought about selling Go.com (its portal site) and realized
that there would be very few buyers, and instead shut it down," she said.
"InfoSpace may have to do the same."
Reach M. Sharon Baker at 206-447-8505 ext. 107 or sbaker@bizjournals.com. |
