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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

April 26, 2007 at 2:02 PM

InfoSpace writes a big check

After being pressured by its largest shareholder, InfoSpace said today it is giving $200 million back to shareholders in the form of a dividend.

The company made the announcement as part of its first quarter financial report.

During the quarter, it lost $500,000, or 2 cents a share, on revenues of $86.6 million, a decrease of $3.6 million, or 4 percent, from last year.

Shareholders started to question what the company was planning to do with more than $400 million in cash and cash equivalents on its balance sheet after its largest mobile content customer said last year that it was pulling its business.

The dividend, approved by the board, will be a special one-time cash distribution of about $6.30 a share. The special distribution is expected to be paid within the next 30 days.

The dividend was part of a settlement agreement InfoSpace made with its largest shareholder, Sandell Asset Management, which owns 8.8 percent of the company.

About a month ago, Sandell asked InfoSpace to return $300 million in cash, cut $15 million in costs and hire a financial adviser to evaluate the potential sale of the company. It said it planned to nominate three directors at the 2007 annual shareholder meeting.

To avoid a proxy contest, InfoSpace agreed to appoint Nick Graziano of Sandell Management to the board immediately.

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