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Press Release

InfoSpace Reports Record Second Quarter Results and Announces Plans to Acquire Leading Broadband Infrastructure Company Go2Net

July 26, 2000
InfoSpace Reports Record Second Quarter Results and Announces Plans to Acquire Leading Broadband Infrastructure Company Go2NetBELLEVUE, Wash.--(BUSINESS WIRE)--July 26, 2000--InfoSpace, Inc. (Nasdaq: INSP), a leading global provider of infrastructure services for wireless devices, merchants and Web sites, today announced second quarter results.

Financial highlights:

-- Revenues grow three-fold to $24.6 million

-- Committed revenue backlog increases to $98 million for the next four quarters

-- Transaction, subscription and commerce represent 90% of total revenues

-- Early indications for wireless Internet subscriber growth rates exceeding all expectations

-- 88% wireless carrier market share in the United States

-- Creating the first global infrastructure company that delivers the services that are fundamentally changing how people around the world communicate, access information, conduct commerce and manage their lives across rapidly converging media platforms such as wireless, DSL and broadband

InfoSpace announced revenues soared to $24.6 million due to strong growth in its wireless, merchant and consumer areas with wireless revenues growing more than 100%. This is a 252% increase from revenues of $6.98 million in the comparable quarter of 1999. Pro forma net loss for the quarter was $3.3 million or a loss of ($0.01) per share compared to a pro forma net loss of ($0.02) per share for the same period last year.

This transaction brings together two infrastructure leaders whose services enable their partners to create a unified experience for consumers to conduct commerce, access information, communicate and manage their lives across all platforms and provides the applications and technologies to take merchants through the entire lifecycle of commerce on any device.

"Today marks another historic milestone in the history of the rapid evolution of InfoSpace," said Arun Sarin, CEO, InfoSpace. "InfoSpace turns in another record quarter of rapid growth and announces the merging of two powerful entities to create the premier global company delivering the services that are fundamentally changing how people around the world communicate, access information, conduct commerce and manage their lives across rapidly converging media platforms such as wireless, DSL and broadband."

Wireless Services

Wireless continues to be the biggest opportunity and fastest growing area for InfoSpace. Today, there are more than 400 million wireless subscribers worldwide and that number is projected to grow 30-40% each year. Nokia and Ericsson have both projected that there will be one billion cellular phones worldwide by 2003. Jupiter predicts that by the same year, more people will access the Internet on wireless devices than on PCs.

InfoSpace continues to be the platform of choice for more than 20 wireless carriers worldwide. In the United States, InfoSpace has access to 88% of wireless subscribers today through its relationships that include 4 of the top 5 carriers: Verizon, AT&T, SBC and ALLTEL.

Most recently, InfoSpace announced that SBC, the second largest carrier in the U.S. with more than 17 million subscribers, selected its platform for the national roll-out of its mobile Internet services. SBC Wireless' new mobile Internet services will be widely available to customers in the fourth quarter of this year, and will be available across six SBC Wireless brands: Southwestern Bell Wireless, Ameritech Cellular, Pacific Bell Wireless, Nevada Bell Wireless, Cellular One and SNET.

In June, InfoSpace signed and launched ALLTEL Wireless, one of the top 5 carriers in the U.S. with close to 6 million subscribers, providing the solution for ALLTEL's national wireless Internet initiative. Wireless users will receive tightly integrated services such as m-commerce, or wireless shopping, location-based services, personal information manager (PIM) applications such as address book and calendar and communication services such as messaging directly on their cellular phones.

In May, InfoSpace signed and launched VoiceStream Wireless to its more than 2.29 million subscribers. InfoSpace is providing the solution for VoiceStream's wireless Internet services and their 'personal portal' called Using InfoSpace's unique wireless Internet platform, the portal is customized to VoiceStream's needs and allows their customers to choose personalized, specific information and be able to conduct commerce all from their wireless phone. The branding of is controlled completely by VoiceStream.

InfoSpace is also experiencing rapid adoption of its mobile commerce solution. Most recently, InfoSpace announced that AT&T Wireless will be the first to launch its mobile commerce solution enabling subscribers to electronically receive promotions from online and offline merchants on their cellular phones that can be used online or offline at a physical store. AT&T, in conjunction with InfoSpace, is leading the way in the world of mobile commerce by being the first to provide their users with unique and valuable new commerce services such as promotions, while helping facilitate transactions that will result in new commerce revenue streams.

InfoSpace continues to aggressively expand its footprint in Europe, Asia and South America. In May, the Company announced its entry into the Latin American market with access today to all Brazilian carriers representing more than 16 million wireless subscribers. Through an agreement with Telesystem International Wireless (TIW), InfoSpace's platform of integrated wireless Internet services will be exclusively offered to all Brazilian cellular operators and Internet Service Providers enabling them to deliver comprehensive and personalized wireless Internet services to their subscribers on their mobile devices.

To date, InfoSpace has successfully deployed the platform of services for nine carriers including:

-- Verizon
-- AT&T
-- VoiceStream
-- AirTouch
-- GTE
-- Austrian carrier ONE
-- Vodafone Australia
-- QWest (formerly US West)

InfoSpace continues to innovate and develop new products and services as part of its integrated platform. Most recently, InfoSpace announced its plans to launch two new services that will make it easy for subscribers to manage their personal accounts from any device including the ability to consolidate, access and manage e-mail accounts from providers such as Yahoo! Mail, AOL Mail, Microsoft Hotmail and any corporate POP3 e-mail account using one universal ID and password. The new service will not only give mobile device users the freedom to communicate and be productive anytime anywhere with a single click of a button, but will also allow them to access and manage multiple business and personal e-mail accounts in one place at one time.

In addition, InfoSpace announced its plans to launch a new mobile banking service to enable the management of multiple financial accounts from one place on cellular phones and PDA's. From any device, users will have access to a consolidated view of all their personal financial information from multiple institutions -- such as bank accounts, bills, credit cards, investments and loans -- in one place, using one secure ID and password.

These new services will be integrated into InfoSpace's comprehensive wireless Internet platform that offers tightly integrated suite of services across any device, any platform and any standard. These services include:

-- Commerce services such as making an instant purchase with a single click, the electronic delivery of promotions that can be used online or offline and the ability to search for products using standards-based codes, including bar codes.

-- Communication services such as device-independent e-mail and instant messaging.

-- Productivity applications such as address book, calendar and 'to do' lists.

-- Personal account management such as e-mail and account aggregation.

-- Transaction services such as transferring funds from one account to another.

-- Location-based services such as finding the nearest ATM or restaurant.

-- Information services such as business finder, movie listings, directories, stock quotes.

-- Real-time alerts such as traffic reports, auction bids and stock alerts.

-- Security services such as personal authentication for secure transactions.

InfoSpace's platform offers innovative and unique services that are helping to turn every mobile device into a true transaction device. This includes the ability to make instant purchases with a single click from virtually any Web site. This patent-pending server-based technology automatically fills in Web site payment forms, eliminating the need to enter in payment or shipping information, register at sites or enter any site- specific passwords from the device.

InfoSpace also enables mobile users to find and receive promotions on wireless devices from retailers and service-based merchants, such as dry cleaners and restaurants, that can be used online and offline. To take advantage of the promotion, the user can purchase the goods online, through a catalog, go to the retail store or simply utilize the service. Using this technology, promotions are seamlessly matched and automatically credited to the user's credit card statement through secure back-end transaction processing.

InfoSpace also offers a new mobile commerce service that allows wireless shoppers or the traditional store shopper to enter anything that is known about an item- such as model number, part number, barcode, international standard book number (ISBN), product name or even scan in a UPC code -- to uniquely and most accurately locate a product, comparison shop and purchase "when they want, where they want and how they want" with a single click via cellular phones, land-line telephones, CE or palm devices, two-way pagers and standard browsers.

InfoSpace has also announced that OmniSky has selected its platform to launch next generation mobile services for PDAs. Palm Pilot users who purchase a wireless modem and service from OmniSky will now have the ability to access a wide range of new services that will change the way they shop, communicate, access information and otherwise manage their lives.

Merchant Services

InfoSpace continues to make significant progress in executing its strategy to provide the most integrated and comprehensive merchant platform that is merging the online and offline world of commerce and creating the largest network connecting merchants and consumers.

The local commerce opportunity is huge. According to the Kelsey Group, $3.7 trillion is transacted through the 10 million local merchants in the United States alone. These merchants spend at least $200 billion annually on promotions and Web-related activities.

InfoSpace's merchant network is built through partnerships with all of the regional bell operating companies (RBOCs) that are subsidiaries of Qwest, BellSouth, SBC and Verizon, merchant banks such as American Express and Bank of America and other local media networks such as newspapers, television stations and radio stations.

InfoSpace's national and local merchant network now consists of more than 600,000 local and national merchants, up more than 50% from the 400,000 merchants reported last quarter.

InfoSpace's merchant services enable local merchants to reach consumers wherever they may be whether that shopping on mobile devices, at home on their PC or soon, in front of their television. InfoSpace offers several unique services, such as the delivery of electronic promotions that can be used online or offline in a physical store, making an instant purchase with a single click and the ability to buy multiple products from multiple merchants with a single universal shopping cart.

Using InfoSpace's services, local merchants are able to promote their products and services across InfoSpace's extensive affiliate network of more than 3,100 Web sites including AOL and MSN, and more than 20 wireless carrier partners including Verizon Wireless and AT&T Wireless creating the broadest reach to consumers available today.

Consumer Services

Momentum continues to be strong for InfoSpace's consumer services. During the quarter, the Company announced several new and expanded agreements.

InfoSpace announced its first entry into the Chinese market through an agreement with Unicom Media, a division of China Unicom, one of China's largest telecommunications companies, to provide the full platform of infrastructure services that is the solution for their Internet initiatives throughout China.

With the addition of new partners such as Unicom Media, InfoSpace's affiliate network has grown from 3,000 to 3,100 portals and affinity Web sites, including 4 of the top 5 most trafficked sites on the Internet.

In addition, InfoSpace continues to expand key agreements with partners, such as Lycos for their classifieds solution and Disney's GO Network for their commerce services, becoming an increasingly integral part of these portals business.

InfoSpace's extensive affiliate network gives it an unduplicated reach of more than 92% of all Internet users and a duplicated reach of more than 400% on PC's. The duplicated reach number represents that on average, more than 92% of all Internet users visit approximately four sites in the InfoSpace affiliate network.

In recent news:

-- InfoSpace appointed telecom industry veteran Rand Rosenberg as Chief Financial Officer and Senior Vice President of Finance

-- InfoSpace appointed Steve Shivers to Managing Director of Europe, Kumail Tyebjee as Managing Director of Asia and Kent Hellebust to Senior Vice President of North and South America to aggressively lead global expansion

-- InfoSpace moved headquarters to Bellevue, WA

About InfoSpace, Inc.

InfoSpace is a leading global Internet information infrastructure services company. InfoSpace provides commerce, information and communication infrastructure services to wireless devices, merchants and Web sites. The Company's affiliates include a network of wireless and other Internet-enabled devices including PCs, cellular phones, pagers, screen telephones, television set-top boxes, online kiosks and personal digital assistants. These include relationships with Verizon Wireless, AT&T, AirTouch, GTE, Intel, Ericsson, Nokia, Mitsui and Acer America. InfoSpace's affiliate network also consists of more 3,100 Web sites that include AOL, Microsoft, Disney's GO Network, NBC's Snap, Lycos, Go2Net Inc., DoubleClick, Dow Jones (The Wall Street Journal Interactive Edition) and ABC LocalNet, among others.

This release contains forward-looking statements relating to the development of the Company's products and services and future operating results, including statements regarding future market share, progress in executing our strategy, introduction, success and features of new products and services, growth in Internet advertising sales, growth of wireless, merchant and consumer services, revenue backlog and future acquisitions, that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect the Company's actual results include seasonality, success of relationships with affiliates, the rate of adoption by advertisers of the Internet as an advertising medium, rate and extent of market growth, market acceptance of our products and services, competition and rapid technological change, the successful completion and subsequent integration of pending acquisitions and the ability to continue to make future acquisitions. A further description of certain factors that could affect actual results include, but are not limited to, those discussed in the Company's Annual Report on Form 10-K, in the section entitled "Factors Affecting InfoSpace's Operating Results, Business Prospects and Market Price of Stock." Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

InfoSpace, and the InfoSpace logo are trademarks of InfoSpace, Inc., which may be registered in certain jurisdictions. Other trademarks are the property of their respective owners.

                               InfoSpace, Inc.
             Pro Forma Consolidated Statements of Operations (A)

                      Three months ended          Six months ended
                            June 30,                  June 30,
                        2000         1999         2000          1999

Revenues          $24,572,095    $6,980,686  $43,577,835   $12,240,104

Cost of revenues    4,458,621     1,645,701    7,577,393     2,954,201

Gross profit       20,113,474     5,334,985   36,000,442     9,285,903

Operating expenses:

 development        5,284,961     2,393,059    9,171,380     4,869,068
Sales, general
 administrative    20,731,649    10,604,970   33,619,180    18,650,755

Total operating
 expenses          26,016,610    12,998,029   42,790,560    23,519,823

Loss from
 operations       (5,903,136)   (7,663,044)  (6,790,118)  (14,233,920)

Other income, net   2,583,493     3,360,226    6,046,245     4,625,712
Income tax expense    (6,598)            --     (24,118)            --
Cumulative effect
 of change in
 accounting principle      --            --    (719,216)            --

Pro forma loss   $(3,326,241)  $(4,302,818) $(1,487,207)  $(9,608,208)

Pro forma basic
 loss per share       $(0.01)       $(0.02)      $(0.01)       $(0.05)

Shares used in
 computing pro
 forma basic
 loss per share   230,322,824   198,449,788  223,707,864   189,085,936

       (A) Pro forma results exclude non-cash charges, non-recurring
charges and items unrelated to the Company's core operations. This
financial statement excludes amortization of intangibles,
acquisition-related expenses, other non-recurring charges and
unrealized loss on investments in the Venture Capital Fund, which are
summarized in the following table. This financial statement also
excludes employer payroll taxes assessed on stock option gains
realized by employees from non-qualified stock option exercises which
are recorded in cost of revenue, product development and sales,
general and administrative expenses. They do not purport to be
financial statements prepared in accordance with Generally Accepted
Accounting Principles (GAAP). The following table reconciles the pro
forma net income in accordance with GAAP for the periods presented.

                            InfoSpace, Inc.
                Reconciliation of Pro Forma Net Income

                          Three months ended         Six months ended
                                June 30,                   June 30,
                           2000         1999         2000         1999

Pro forma net
loss             $(3,326,241)  $(4,302,818) $(1,487,207)  $(9,608,208)

 taxes on
 stock option
 exercises          (589,512)      (74,551)  (3,122,555)     (106,585)
Amortization of
 intangibles     (19,937,714)     (304,661) (27,428,465)     (603,940)
Acquisition &
 other related
 charges            (202,102)   (4,969,365) (86,599,408)   (4,969,365)
Other - non-
 charges                   --     (209,500)  (2,887,609)     (209,500)
 charges          (2,171,462)            --  (2,171,462)            --

Unrealized gain
 (loss) on
 investments held
 in VC Fund       (8,447,333)            --   15,150,355            --

Minority interest
 in VC Fund         3,445,289            --  (6,398,032)            --

Net loss        $(31,229,075)  $(9,860,895)$(114,944,383)$(15,497,598)

                            InfoSpace, Inc.
                 Consolidated Statements of Operations

                             Three months ended      Six months ended
                                 June 30,                 June 30,
                            2000          1999       2000         1999

Revenues          $24,572,095    $6,980,686  $43,577,835   $12,240,104

Cost of revenues    4,477,602     1,645,701    7,596,374     2,954,201

Gross Profit       20,094,493     5,334,985   35,981,461     9,285,903

Operating expenses:

 development        5,649,288     2,437,962   10,426,568     4,924,566
Sales, general
 administrative    20,937,853    10,634,618   35,467,566    18,701,842
Amortization of
 intangibles       19,937,714       304,661   27,428,465       603,940
Acquisition &
 other related
 charges              202,102     4,969,365   86,599,408     4,969,365
Other - non-
 recurring charges         --       209,500    2,887,609       209,500

Total operating
 expenses          46,726,957    18,556,106  162,809,616    29,409,213

Loss from
 operations     (26,632,464)  (13,221,121) (126,828,155)  (20,123,310)

Unrealized gain
 (loss) on
 investments held
 in VC Fund      (8,447,333)            --    15,150,355            --

Minority interest
 in VC Fund        3,445,289            --   (6,398,032)            --

 charges         (2,171,462)            --   (2,171,462)            --

Other income, net  2,583,493     3,360,226     6,046,245     4,625,712

Loss from
 before income
 tax expense
 and cumulative
 effect of
 change in
 principle      (31,222,477)   (9,860,895) (114,201,049)  (15,497,598)

Income tax expense     6,598            --        24,118            --

Loss from
 effect of
 change in
 principle      (31,229,075)   (9,860,895) (114,225,167)  (15,497,598)

 effect of
 change in
 principle                --           --      (719,216)            --

Net loss      $(31,229,075)  $(9,860,895) $(114,944,383) $(15,497,598)

Basic loss
 per share          $(0.14)       $(0.05)        $(0.51)       $(0.08)

Shares used in
 computing basic
 net loss per
 share           230,322,824   198,449,788   223,707,864   189,085,936

                            InfoSpace, Inc.
                 Condensed Consolidated Balance Sheets

                                          June 30,    December 31,
                                            2000         1999


Current assets:
  Cash and cash equivalents                 $35,992,483    $37,985,250
  Short-term investments                    107,422,059    124,720,142
  Accounts receivable, net                   14,148,316      6,663,497
  Notes and other receivables                34,940,665     11,580,866
  Prepaid expenses and other current assets  10,496,288     13,638,016

    Total current assets                    202,999,811    194,587,771

  Property and equipment, net                27,402,688      7,998,957
  Long-term investments                      13,805,271     71,416,776
  Other investments                          62,725,876     17,038,508
  Intangibles, net                          365,805,073     73,842,557
  Other long-term assets                      3,935,928        702,641

    Total assets                           $676,674,647   $365,587,210


Current liabilities:
  Accounts payable                           $3,132,721     $2,810,141
  Accrued expenses and other
   current liabilities                       11,688,759     19,543,490
  Deferred revenue                           15,983,279      2,672,531

  Total current liabilities                  30,804,759     25,026,162

Long-term liabilities and minority interest:
  Long-term debt                                416,346        685,762
  Minority interest - VC Fund                25,310,803             --

  Total long-term liabilities and
   minority interest                         25,727,149        685,762

Stockholders' equity:
  Common stock                                   23,192         21,182
  Additional paid-in capital                838,466,993    439,428,415
  Accumulated deficit                     (213,456,818)   (98,512,435)
  Comprehensive income                      (1,979,213)      1,317,448
  Deferred expense - warrants               (1,903,308)    (2,311,159)
  Unearned compensation - stock options     (1,008,107)       (68,165)

  Total liabilities and
   stockholders' equity                    $676,674,647   $365,587,210

InfoSpace, Inc.
Adam Whinston, 425/201-8946
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