[by Rafat Ali] InfoSpace is a company of contradictions…no company in the Internet age has gone through so much, from the heights during the boom days to the scandals, to the rebirth and comeback in the last two years. Under CEO Jim Voelker, the company certainly seems to have clawed its way back.
The revenues and profits for the company have been nothing less than stellar for the last few quarters, on the back of resurgence in search/advertising and the mobile content sector. Its Q1 profits soared to $93.4 million and revenues climbed to $87 million. Its mobile revenues were $39.1 million, an increase of $24.2 million or 163 percent from the year-ago quarter.
Which is why the slew of executives leaving InfoSpace Mobile makes it all the more puzzling, and in some ways symptomatic of the activity in the market and the future of mobile content aggregators in the industry: According to multiple sources I have talked to over the last week or so, many of the top executives have left or are leaving. From the top, EVP/GM of the division Kendra Vander Mullen left a while ago. The current CTO Shane Dewing and VP of Entertainment Dean Newton will publicly announce their resignation on Monday, and are joining Anthony Stonefield, the former CEO of Moviso who also left recently to start a new company in the space in a startup.
This marks the end of an era for the first phase of the U.S. mobile content industry, where companies like Moviso were among the pioneers in this field. All founders of Yourmobile (a company which was merged into Moviso, which in itself was bought by Vivendi Universal and then sold to InfoSpace) and Moviso will have departed: Anthony Stonefield, Shawn Conahan, Shane Dewing, Bryan Biniak, Hilton Rosenthal, Ralph Simon, and Mark Rosenblatt. As well as senior team members Chris Cunningham and Dean Newton, both recruited from Sony Music to Yourmobile.
That notwithstanding, the company has made some senior appointments over the last month or so: Microsoft’s head of Portable Media Center group Frank Barbieri joined recently as VP of Product and Business Development for the mobile group, and George Fraser joined as VP of marketing for Europe. But other than that, the company has been looking to fill a lot of top positions, including GM of Games, GM of Media, and GM of Mobile Portal Services, and of course, head of the mobile division. Currently the division is being run by Steve Elfman, the VP of mobile operations.
In the brief chat that I had with Elfman today, he said that he is very excited to be working with the team at InfoSpace, and the executives leaving are just normal occurrences after a merger happens. Most of the people who left are serial entrepreneurs, and that also explains their leaving, he told me.
Some of the analysts covering the space have, in the recent past, expressed worries about the rate of growth at IM…the company forecasted a weak outlook in its Q1 earnings announcement last month, and blamed it on a seasonal slowdown. One of the analysts Jason Willey of Moors & Cabot said at that time that the mobile business might be suffering from customer-specific issues, such as the renegotiating of contract terms, or competitors stealing market share. Among the biggest customers for InfoSpace Mobile has been Cingular and over the last few months, companies like Motricity have been chipping away at that relationship too…
Another industry executive I spoke to said that InfoSpace has a bunch of cash sitting, and might be looking to buy a content company, instead of relying on mobile tech acquitisions in the future. The flush out of these executives may be indicative of that. The executive also said that one of the things InfoSpace did wrong was to become too gung-ho about licensing content, rather than trying to develop creative, original content.
The company has been trying to reinvent its mobile division, from just relying on ringtones business to the fast growing mobile gaming. It has made a slew of smaller acquisitions in the last year, and merged them into a games unit.
On a big-picture level, the aggregators are feeling the squeeze, with carriers and content providers trying to strike deals without going through these intermediaries. That is perhaps a medium to longer terms worry for all the industry players.
On a more positive note, all the activity and defections also point out to the level of activity in the market: mobile content-tech startups are being started everywhere, and there is a real resource/talent crunch in the industry. Jobs, jobs, ah…
Stay tuned here for the ongoing saga at InfoSpace…
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