This is a big blow for InfoSpace: it says one of its big carrier partners (hasn’t named it) plans to develop direct licensing relationships with the major record labels beginning in early 2007, and will affect its business in a big way.
It expects its revenues, as well as its operating results, to be negatively impacted. Through the first six month of this year, InfoSpace generated $89.6 million in mobile revenue, of which label tone sales represented approximately $55 million. InfoSpace’s total revenue for the same period was $186.1 million.
The company said plans to “rationalize its costs to align them with expected future revenues”. More plans will be announced within 30 days. More details here.
My guess: Cingular. Any other guesses?
John Cook writes that the company spokesman declined to comment on the possibility of layoffs or the name of the customer whose business it lost.