Shares of InfoSpace Inc. sank after the company reported a first-quarter loss of $500,000, marking a notable downturn from a net income of $3 million the company posted during the year-ago period.
The Seattle-area developer reported $86.6 million in revenue during the quarter, down $3.6 million from the same period in 2006. Its mobile business generated $41.6 million in revenue, decreasing 6 percent, and suffered a $3.4 million loss.
InfoSpace last year abandoned its direct-to-consumer content effort, opting to focus on its mobile and online search offerings. The firm lost $12.7 million last year and is facing a $100 million lawsuit from EMI in a ringtone-licensing dispute.
“Although mobile media revenues declined as expected, revenues from our core online and mobile businesses showed strong sequential increases and generated strong cash flow,” said CEO Jim Voelker. “The recent announcement of several key partnerships including AT&T, Vodafone’s SFR and Google reflect our strength and give us good reason to be optimistic for the year ahead.”
Investors didn’t agree, however, sending shares of InfoSpace down $1.44, or more than 5 percent, to $26.27 following the news.
The company also said it had reached an agreement with Sandell Asset Management Corp., a major shareholder that had publicly set the stage for a proxy contest. InfoSpace agreed to give back $200 million to shareholders in the form of a dividend and said it will appoint Sandell executive Nick Graziano to its board and place him on a committee exploring ways to boost the company’s stock price.
InfoSpace posts Q1 loss, shares slump
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