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April 26, 2006 at 4:42 PM

InfoSpace emphasizes mobile in Q1

The first-quarter report from InfoSpace today reveals the urgency the Bellevue-based Internet and mobile content developer has toward the rapidly growing mobile content market.

The numbers are hard to compare with the year-ago period because of a one-time gain last year from the settlement of litigation between the company and its founder, Naveen Jain. But the takeaway is that the numbers are pretty much on par with prior quarters, minus a heavy amount of investing.

InfoSpace said during a conference call today that it spent $3 million of the planned $5 million on investing in three hot areas: mobile search, content acquisition and a direct-to-consumer brand. In all, it reported a net income of $3 million or 9 cents a share on record-breaking revenues of $90.3 million during the quarter.

To update the financial community on where the company stands in those three segments, InfoSpace said that during the quarter it launched new mobile search platforms with Sprint Nextel (called Find it!) and a new search tool for T-Mobile USA customers. On the content acquisition front, it secured 20 new licenses for a total of 600 agreements to create a “deep library of music and entertainment products.” It also launched new services with Cingular Wireless, including “American Idol” ringtones and a ringtone service on MySpace for undiscovered bands.

On the direct-to-consumer front, InfoSpace said it is getting closer to launching its own brand. Up to now, it has emphasized white-labeling, so that its technology was branded with the carrier’s name. Now, it’s aiming to sell content directly to users using an off-portal model that circumvents the carrier.

CEO Jim Voelker, who didn’t want to go into too many details for competitive reasons, said the product should be ready this quarter.

And the investing won’t stop there, either. InfoSpace said it plans to spend $6 million to $7 million on those three segments during the current quarter. The company said it expects a net loss of $2 million to $3 million in the second quarter, which includes $6.5 million in stock compensation expense.

InfoSpace’s stock climbed higher in after-hours trading to close at $27.50.

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