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March 19, 2007 4:03 PM
Posted by Tricia Duryee
Executives at InfoSpace commented today on a shareholder's concern that the Bellevue company needed to cut costs and return capital in its large war chest to shareholders.
Last week, Sandell Asset Management asked InfoSpace to immediately return $300 million of cash, cut $15 million in costs and hire a financial adviser to evaluate the potential sale of the company in whole or in part. Then, it said it was going to nominate three directors at the 2007 annual shareholder meeting.
In a document filed with the SEC, Jim Voelker, chairman and CEO of InfoSpace, had this to say:
We are always interested in the views of our shareholders and appreciate those expressed by Sandell Asset Management in our conversations with them. We look forward to continuing our dialogue. Our board and management team are mindful of the mandate to deliver high performance and shareholder returns. We regularly review the company's business plan and the value inherent in that plan -- and will take a measured and decisive approach to continuing to do what we believe is in the best interests of all shareholders.
InfoSpace said it will also present recommendations regarding Sandell's nominees for directors in its proxy statement, which will be filed with the SEC and mailed to all shareholders.
InfoSpace has had difficult times after it was notified last year that its biggest mobile customer, Cingular Wireless, would be going directly to the music labels for content, rather than using InfoSpace's services. That caused InfoSpace to rethink its mobile strategy and lay off 250 employees to cut costs.
Today, InfoSpace is again more focused on its online portals, like Dogpile, and its mobile infrastructure business, such as search.
The stock fell 44 cents today, or 1.75 percent, to close at $24.70. Despite all the turmoil, that's only $3.69 below its high of $28.39 for the year.