InfoSpace shareholder laments company troubles, proposes new board members

Challenges continue for InfoSpace Inc. with news that a major shareholder is looking to nominate three independent candidates for election to the company’s board of directors at an upcoming stockholders meeting.
Sandell Asset Management Corp., which holds 8.8 percent of InfoSpace shares, earlier this week asked the company to immediately return $300 million in cash to shareholders. And Sandell has asked InfoSpace to cut an additional $15 million in costs to improve profitability following the company’s restructuring of its mobile division.
“We believe that InfoSpace shares are materially undervalued and the board and management should take immediate steps to improve that value,” Sandell CEO Tom Sandell said earlier this week. “As the company’s largest shareholder, our interests are directly aligned with the rest of the shareholder base in seeing value maximized.”
Sandell also urged InfoSpace to retain an investment bank to “evaluate strategic options.”
InfoSpace is focusing on its mobile and online search services at the expense of its mobile content business, which has floundered. The company lost $12.7 million last year, a drastic downturn from a net income of $159 million posted in 2005, and is facing a $100 million lawsuit from EMI in a ringtone-licensing dispute.
An InfoSpace representative was not immediately available for comment regarding Sandell’s efforts. Shares of the company were essentially unaffected by the news, gaining 5 cents to $25.14.