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Technology Stocks : InfoSpace (INSP): Where GNET went! -- Ignore unavailable to you. Want to Upgrade?

To: Roger Sherman who wrote (25950)	5/21/2001 8:39:56 AM
From: The O	Respond to of 28311

The shareholder's meeting is today, and can be heard on: corporate-ir.net O

To: Roger Sherman who wrote (25950)	5/21/2001 8:59:46 AM
From: Carolyn	Respond to of 28311

Good luck, Roger. Give 'em you-know-what!

To: Roger Sherman who wrote (25950)	5/21/2001 9:02:19 AM
From: levy	Respond to of 28311

yes I have heard some rumors........ I might suggest you go see your local psychic for a clue........have her check your lifeline

To: Roger Sherman who wrote (25950)	5/21/2001 11:26:18 AM
From: levy	Read Replies (1) \| Respond to of 28311

Roger....are you sure it is safe for you to go to the meeting.....it is my understanding that they know who you are and will be ready for you.....ask not, how much money they have left?....ask not, when we might expect any other carrier to start using iqshopper? ask not, not aa atul is coming on board to save the ship and please give Tammy my regards....

To: Roger Sherman who wrote (25950)	5/22/2001 9:16:08 AM
From: levy	Read Replies (2) \| Respond to of 28311

While waiting for your comments on the meeting I thought you might find these interesting from another on the motley board Here are my notes from the May 21, 2001 stockholder's meeting. I am just an amateur stockholder so don't expect too much. This was the first Infospace stockholder's meeting for me so I can't make any comparisons to last year's meeting. The room was about 2/3 full and probably could have held about 600 people. I had elbow room which was nice. INTRODUCTIONS The COO started things off with introductions but not much else. OFFICIAL MEETING What a surprise, everything passed. The COO did a good job of running through the script fairly smoothly. It was over in a few minutes. PRESENTATIONS There were three presentations 1) the CEO with his vision, 2) the CFO with the data, and 3) the COO with the execution. CEO PRESENTATION The CEO's presentation was the longest. He wanted to talk about where we are and where we are going. His style struck me as being very evangelical. His vision is based on being the premier global infrastructure information provider on any device. There was more to it than that but that was all the faster I could write. He emphasized that the company is not new to the industry. They have even been working on wireless technology for the last five years rather than just jumping on the bandwagon. The company is nicely positioned because it has a liquid balance sheet and a proven business model. He showed a 2-D table that described the companies business areas. On one axis was the consumer and commerce sectors while the other axis was wireline, wireless, merchant and broadband areas. Within Wireless there are 20 primary carriers who are charged based on $/subscriber/month or $/message. There are about 2 million subscribers. I think he said revenue is expected to double from 2000 to 2001. The 2001 initiatives are basically 1) micropayments (where you pay for your coffee without having to stand in line), 2) short message services (which accounts for 30% of the usage in Europe), 3) games (where games become device agnostic), and 4) vertical markets like Spanish, teen and urban markets. Under market services, there were about $500M in transactions through the network in Q1. That is even more than the $450M Q4 which was the Christmas season. Most retail would show a lower Q1 than Q4 so that should be a good sign. There are about 100,000 merchants tied into the Payment Process Platform. From what I heard at the meeting, American Express has initiated a service where you can do one click shopping amongst a number of merchants and it all ends up as the same transaction. You don't have to register at each site independently which can be time consuming and confusing. The Mobile Payment Processing should allow folks to replace their credit cards with PDAs and cell phones in the long run. He pointed out that Infospace is a technology company in an industry where there is a high barrier to entry and that they are good at integrating acquired technology. One difficulty for everyone involved is the high reliability expected of wireless services. People expect those services to have the reliability of their regular phones. That is tougher than the expectation of folks dealing with the Internet. On the Internet people expect reliability more like their PC. It sounded like Infospace meets the criteria. In his summary statement, it sounded like he said the company is stronger than ever and that they are concentrating on making a great enterprise that will still be great 25 years and longer down the road. CFO PRESENTATION The CFO's presentation was quick and concise. Some of the numbers she went through were the gross margin of 80% to 85%, no debt and the asset total of about $1.5B. (Isn't that close to the existing market cap?) It sounded like Q3 will be breakeven and Q4 will return to profitability. She emphasized that doubling of the wireless business in 2001. By the end of the year they expect to have 5 million subscribers. She closed by mentioning the significant strength in the balance sheet. COO Presentation The COO talked about four main topics, 1) people, 2) innovation, 3) performance, and 4) culture and how all of these are aimed at executing the vision. The key to success is executing a strategy, not just having a strategy. Of course, execution is the COO's main job if I recall correctly so I am not too surprised. Under people he talked about compensation and such. There were 450 people last year and there are about 1,000 now. The innovation is demonstrated by the way they create markets as in the micropayment model. Performance seemed to be mostly about exceeding customer expectations. Culture is integrity, trust, teamwork accountability, focus, and a winning spirit. He added that the Internet may not be generating new businesses as much as it is giving a tool to existing businesses. The year 2000 was challenging but they are emerging as a stronger company. QUESTIONS & ANSWERS I paraphrase the questions and the answers a bit because I can't write fast enough and don't always hear the whole thing. ? In response to a question about the greatest uncertainties to growth the CEO suggested the person look to the 10K. ? The presentations were good but sounded more like sales pitches. Could they provide any information about the lawsuits and what was affecting the stock price? The CEO pointed out that the stock market is not in their control. I got the impression that if someone doesn't like the company that they should not won it. I didn't capture that one exactly but his response got a round of applause. That struck me as very odd. The CFO pointed out that they can not comment on lawsuits. ? Valueline showed a drop in revenue from Q3 to Q4. The CEO described the Go2Net business consumer business as falling off a cliff and that it did not mix well with Infospace though Authorize.net and the search engines were useful. ? The departure of one of the directors (or was he an officer) who was noted for his wireless expertise was noted. He wanted to spend more time with his family. The CEO mentioned that he hopes he will return when his kids are in college. ? The micropayment process was described in more detail. It is more like picking up your cell phone and calling 1-80-STARBUCKS, having the system recognize you through your phone number and asking you if you want your favorite drink at your favorite location, and then billing you and sending the order in so it is ready when you get there. ? There was something about hiring a president. The CEO pointed out that if he can find someone who can take care of Infospace as well as he can he would hire him. I think he said something like my dream and my life is Infospace. ? Competitive advantage is best measured by the lack of real competition. The acceptance of the majority of the big wireless firms is encouraging. ? The Go2Net merger/acquisition (which was it?) was humbling. The CEO pointed out that he underestimated the task of integrating consumer sites and of changing the employee's minds from working on generating traffic to working on technology. There are very few of the Go2Net senior managers left since there was duplication during the integration of the two companies. Again there was applause after this response. ? Vulcan Ventures now owns a substantial stake of Infospace since it owned a substantial stake in Go2Net. A member of the audience asked the representative to give his vision of Infospace's future. He got up somewhat reluctantly. I don't think he wanted to steal anyone's thunder or spotlight. It sounded like Vulcan Ventures sees a lot of growth potential in this business. None of the sectors are growing as quickly as expected and without glitches but that doesn't mean that the growth has gone away; it just might be pushed out further. The trick is to stay in the market long enough to be there when the growth kicks back in. ? Since Infospace now owns a piece of an interactive TV company through Go2Net's assets, he was asked to comment on it's status. He basically deferred until their stockholder's meeting which will be in a few weeks. He pointed out that the potential usefulness is encouraging. ? Someone said that they had heard that Paul Allen who owns most of Vulcan Ventures may have filed to sell all of his INSP shares. The Vulcan Ventures representative said that he had not sold any shares. CONCLUSION On the numbers side things look promising. The business is growing and they have a healthy balance sheet. I am going to go track down the asset list. It sounds like the market cap and the current assets are the same number. Does that make this an asset play if nothing else? The management style and the feel of the room was quite disconcerting though. I originally purchased GNET stock and let it convert to INSP. I can't say that I felt comfortable sitting there as a INSP stockholder. It is hard to describe but I know that I wasn't going to ask any GNET related questions considering what I had seen. On a personal level that is an easy thing to deal with. It makes me wonder though how things are going on within the company for those folks that used to work for Go2Net. The COO mentioned teamwork and maybe the workplace has a different environment. That is probably my biggest hesitancy about the company. They seem to be working on some good things and the business should survive this economy. The stock has a lot of potential. The sort of thing that can derail it is if the people working there become disenfranchised. I'll keep holding the stock because of it's potential, but I think I'll keep watching this one.