The Motricity acquisition of InfoSpace’s mobile assets has closed, so has the Superpages’ acquisition of the company’s local/directory assets. In addition, long-time executives are departing.
The asset sales were motivated by disgruntled shareholders who wanted more short-term value from the company. They got it, but what has InfoSpace got left? A diminished InfoSpace has Dogpile, Infospace.com and a couple of other search destinations.
Its search business struggles from a consumer standpoint (though it makes money through ad deals with Google and Yahoo!). Though Dogpile was ranked tops by JD Power and Associates in customer satisfaction that recognition hasn’t translated into market share gains. (InfoSpace’s search market share stands at less than 1%.)
The company, which was once worth more than $14 billion, has never been able to sell “metasearch” to the public. And it has not been able to build a brand around Dogpile to date. Now, with a host of new startups going after Google, from Powerset, Wikia and Cuill to Blekko, it appears improbable that the company will gain any share with its existing product — unless it’s dramatically redesigned or otherwise improved.
There are certainly opportunities that InfoSpace can tap in vertical search (using its metasearch capabilities), in addition to trying to reinvent itself in general search. The company also will need to get back into local, if only indirectly.
We’ll see if InfoSpace can successfully rise to the challenge or whether it limps along in some zombie-like way (a la Looksmart).
Screenwerk 
January 4, 2008 at 3:51 pm
LookSmart zombie-like?
You have not been reading their news Greg. They are actively selling their AdCenter service as well as buying back stock to the tune of 20 million dollars.
Their AdCenter may be the tech that is behind Facebook’s ad platform and they recently rented space to the FIM (MySpace) people, Hmmmm.
Everyone likes to slap down LookSmart, it must appear to be a safe company to slam as so many in the industry do it.
Can you offer an opinion why they bought Edgeio?
January 4, 2008 at 3:58 pm
LookSmart fell very far and tried numerous things to revive itself without success. They recently sold Grub to Jimmy Wales. The company lost David Hills and CTO Michael Grubb. So from the outside things don’t appear very solid.
But perhaps there’s a viable B2B business there.
Re Edgeio . . . it must be another entry into a consumer strategy re “listings” (classifieds/YP, which has a long history at Looksmart). However, there could be some technology there. The auction price was sub-$300K as I understand it.
January 4, 2008 at 6:20 pm
Greg, you mentioned Info may get back into local, even if indirectly. Is there an indication they are pursing a local search effort? Thanks, Jeff
January 4, 2008 at 6:29 pm
No. I just don’t think you can do search without doing local as a part of that.
January 4, 2008 at 10:03 pm
Greg,
What do you think are the chances of InfoSpace retooling the back-end technical coding behind their consumer search properties? I don’t know about you, but whenever I run a vanity search on Dogpile or WebCrawler for myself, I get *maybe* 25-50 results from *all* search engines. Yet, if I do the same search on, say, Google or Yahoo!, that increases to 1000+ and the relevancy is significantly higher. Meta-search has promise when done right. Sadly, no one has done it right yet.
If the company doesn’t invest in a retooling of their “behind the scenes” technical infrastructure, then it should be wound up forthwith, with an asset sale of the consumer Web properties to a holding company like IAC or possibily Vivisimo, whose Clusty meta-search property produces greater quantity and better quality of relevant results than InfoSpace’s. It could just benefit from increased prominence from some mildly successful brands like the aforementioned to create a multi-branded approach to drive traffic.
Perhaps InfoSpace could even perform a takeover of Vivisimo, a corporate name & ticker symbol change to Vivisimo and replace the technology behind its consumer properties to Vivisimo’s? While they’re at it, how about a cosmetic move like a 1-for-3 reverse stock-split to boost the share price and earnings per share to attract institutional investors?
Cheers,
Doug
P.S. Does their private-label business have any value, other than powering the Web search results of Excite? Who are their other partners besides ABC News? They claim over 100+. Any potential suitors for that business?
January 4, 2008 at 11:18 pm
There probably is some value in private label business. Not sure about their partners however.
You have some interesting ideas. Regardless, they need to do some things to develop some momentum for their consumer search business.
January 6, 2008 at 8:51 am
Heck, they could probably even create several Google Custom Search pages, branded as Dogpile, MetaCrawler, and WebCrawler and make a cut of the Google search ad revenue while dramatically increasing relevancy. I may even use a Dogpile or WebCrawler-branded, Google-powered search engine owned by InfoSpace. In its current form though, InfoSpace’s properties are useless and you’re quite right, they need to do something – and quickly, before even more of their minimal market share erodes further.
It’s a shame, really, what WebCrawler has become. WebCrawler, AltaVista and a search engine called Magellan were the first search engines I used back in 1994-97. They have great brands.
Cheers,
Doug
Disclosure: I don’t hold positions in any of the companies mentioned in this blog post. I have, however, recently purchased a small position in Yellow Pages Income Fund, which you have commented and reported on in other posts.