The Infy Redux

Another Seattle digital media company making the turnaround…this time InfoSpace. It has re-focused its business, sold off unrelated businesses, etc…but some downsides remain, as this analyst points them out rather pointedly (!):

“While I believe InfoSpace can continue to make progress on its turnaround plan, I doubt the company will ever develop a compelling value proposition for a number of reasons.

– First, there is no clear line of demarcation regarding where InfoSpace seems to conduct business…

– Second, in my view InfoSpace’s wireless story doesn’t hang together. There are so many different directions the wireless business could go – the whole space is still emerging and a bit messy. It’s a difficult challenge for a company to figure out how to get content optimized for a particular carrier and for a particular wireless device. I’m not convinced that InfoSpace knows how to address that problem adequately. A content company probably doesn’t want to be paying a competitor to host its services on a carrier. Winners will provide distribution for major media brands; but InfoSpace lacks the business development talent to build and sustain lasting relationships with major carriers globally. Furthermore, major content companies are not desperate to have yet another entity between them and the carriers. InfoSpace will likely become just another aggregator but with more limited distribution than the likes of Mforma and others. [Ed: I addresssed some of these problems in a note I wrote up a month ago]

– Third, with regard to the directories business, I have to believe that Google will dominate this category leaving InfoSpace way behind.”

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