When Jim Voelker took over InfoSpace from Naveen Jain two years ago, he saw a company in total disarray. But Voelker said he figured that...
When Jim Voelker took over InfoSpace from Naveen Jain two years ago, he saw a company in total disarray.
But Voelker said he figured that if nothing else, he could sell all of its businesses and start all over with the company’s $300 million in cash.
Voelker quickly shut down or sold many of InfoSpace’s 12 businesses to focus on five core segments. Four have grown so rapidly — particularly sales of cellphone ring tones — that last year InfoSpace reported $249 million in revenue — up 89 percent from the previous year and more than Jain ever achieved in the company’s dot-com heyday.
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InfoSpace is also in the black for the first time, with profits reaching $51 million last year.
As a result, the company’s stock has come roaring back under Voelker’s watch, from $9 a share two years ago to a closing price of $42.13 yesterday.
Jain was furious when the board of directors ousted him in favor of Voelker in December 2002. Jain sent an angry e-mail to InfoSpace workers warning in strong language that Voelker wasn’t qualified for the job.
Once an executive of XO Communications, Voelker had been out of the wireless business for four years when he took over as InfoSpace chief executive.
“When I stepped in to take this job I didn’t do it with blinders on,” Voelker said in a recent interview. “For me it was an opportunity. There was some toxicity around it, no doubt about it.”
One of the biggest challenges was convincing employees and customers that InfoSpace had a solid future, Voelker said. Both groups had watched with concern as the company eliminated half of its 1,200 jobs.
There was talk of changing InfoSpace’s name to shed its old image, but Voelker decided it wasn’t necessary. He brought in new managers and tightened the company’s accounting.
The company’s revenues today are solid, Voelker said. By the time he took over, the company had already stopped the dubious practice of investing in companies in exchange for business.
“There weren’t any lazy Susan deals out there,” he said.
Voelker ended the company’s practice of reporting pro-forma profits, which critics dubbed “profits before all the bad stuff” and which didn’t meet general accounting standards.
He focused on businesses that Jain de-emphasized, such as the Internet search engines Dogpile and MetaCrawler and people-search directories. One surprise was the rapid growth in sales of ring tones for cellphones.
The one business that has remained stagnant is the wireless Internet, the segment Jain promised would make InfoSpace the world’s first trillion-dollar company.
The technology to surf the Web on a cellphone just wasn’t ready yet, Voelker said.
“They were on the ground floor,” Voelker said, “but it was a long way from floor one to floor two.”