Infospace posts declines in mobile, online operations

Shares of InfoSpace Inc. plunged after the company posted declining revenues in both its mobile and online businesses.
The Seattle-area firm reported a net loss of $28.1 million in the second quarter, contrasting dramatically with the $1 million in net revenue InfoSpace posted during the same period last year. The recent loss includes a $22.3 million payout to employees and directors related to the $208.2 million special dividend to shareholders and an $8.8 million non-cash charge for stock-based compensation expense.
Mobile revenues were down drastically, underscoring InfoSpace’s difficult exit from the mobile content space. The company generated $30.8 million in revenue during the recent quarter, down nearly one-third from the year-ago period, but managed to narrow its net loss in mobile to $3.6 million following a net loss of $7.7 million in mobile in the second quarter of 2006.
InfoSpace forecast more bad news for 2007, however, projecting a loss of $55 million to $57 million on revenue of $260 million to $264 million.
Investors responded by punishing the Internet search service provider in after-hours trading Wednesday as shares plunged to a 52-week low of $17.19 per share. The stock rebounded slightly Thursday, holding at $17.65 per share, down more than 12% from Wednesday’s close.
“Our second-quarter operating results were largely in line with expectations,” said CEO Jim Voelker. “We have completed our restructuring, exited the mobile media business and significantly reduced costs. Moreover, we have good momentum in the mobile services business and have added several new, high-quality online distribution partners.”
InfoSpace several weeks ago spun of its content business-formerly known as Moviso-to FunMobility for an undisclosed sum, and expanded its relationship with Verizon Wireless to include hosting, infrastructure and subscription management services for the operators Mobile Web 2.0 offering.