InfoSpace Reports Record Revenues
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As InfoSpace announced record fourth quarter revenues of $66.1 million, the company revealed its desire to move away from the direct consumer market.
InfoSpace earned a pro forma net profit of $12.6 million, or $0.04 per diluted share compared to a pro forma net loss of $7.8 million, or a loss of $0.03 per basic share reported in the same period last year.
For the year, the company reported revenues of $214.6 million, an increase of 197% from the $72.3 million reported for 1999. Pro forma net profit for the year was $46.2 million, or $0.14 per diluted share compared to a pro forma net loss of $9.9 million, or a loss of $0.03 per basic share reported for 1999.
According to Naveen Jain, chairman and CEO of InfoSpace, the company will make a number of significant changes in order to maximize revenue in the new fiscal year, beginning with a move away from the direct consumer market, which Jain associates largely with a number of acquired Go2Net properties.
"We have made a conscious decision to move away from low-growth, non-recurring and non-scaleable revenue streams, so we have decided to de-emphasize the consumer part of our business," says Jain. "We are exploring options in terms of either sale, de-emphasization, or in terms of looking at what we can do with the businesses that are not core or strategic to what we are trying to do."
According to Edmund Belsheim, COO of Infospace, these adjustments do not reflect any core change in the company's competitive position.
"We do not feel that our revised financial guidance is related to the general competitiveness of our products, but rather is due to concerns about the state of the economy and the de-emphasis on areas that are not scalable," comments Belsheim.
After having closed approximately 20 acquisitions in the past year, Jain says the company will avoid investing in other companies during the next year.
"In the last two years Go2Net and InfoSpace together acquired approximately 20 companies that allowed us to enter some new markets faster and add significantly to our revenues," says Jain. "Given the current market conditions and our declining stock price, we are revising our business plan to assume few or no acquisitions of any significance this year."
The company plans to continue its focus on wireless, where they expect 100% revenue growth over the next year, and broadband.
"The broadband space reminds me of the wireless space about 2 years ago," says Jain. "We are very well positioned to be a leader in this market and are jumping at every opportunity now, much in the same way that we did in the wireless in the early days."
The company will hold a meeting for investors in thirty days, in which they will disclose further guidance for the upcoming year and beyond.