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March 16, 2007

Shareholder lashes into InfoSpace

Posted by Tricia Duryee at 9:47 AM

Earlier this week (second item), one of InfoSpace's shareholders sent a letter to the Bellevue company expressing concern over cost controls and the lack of capital return to shareholders from InfoSpace's large cash balance.

And on Thursday, Sandell Asset Management notified InfoSpace that it will nominate three "highly qualified independent candidates" directors at the 2007 annual shareholder meeting.

In its first request, Sandell 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.

InfoSpace has had difficult times after it was notified last year by its biggest mobile customer, Cingular Wireless, that it would be going directly to the music labels for content, rather than using InfoSpace. 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.

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Tricia Duryee
Tricia Duryee
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