EXHIBIT 1
SANDELL ASSET MANAGEMENT FILES PRELIMINARY PROXY STATEMENT FOR
INFOSPACE, INC.
Seeks Minority Board Representation On Behalf Of All InfoSpace Shareholders
NEW YORK, NY, APRIL 16, 2007 - Sandell Asset Management Corp. ("Sandell") today
filed a preliminary proxy statement with the Securities and Exchange Commission
in connection with its planned solicitation of proxies for the May 31, 2007
Annual Meeting of Shareholders of InfoSpace, Inc. (NasdaqGS: INSP). As
InfoSpace's largest shareholder, owning approximately 8.8% of its outstanding
shares, Sandell is seeking support from all InfoSpace shareholders to elect its
three highly qualified and independent nominees in order to establish strong
shareholder representation on InfoSpace's Board of Directors.
In its preliminary proxy statement, Sandell cited the following key reasons why
change is needed at InfoSpace and why shareholders should support our Slate of
Nominees:
o DRAMATIC SHARE PRICE UNDERPERFORMANCE - Over the past two years, under
the watch of the current Board of Directors, InfoSpace shares have
declined 45%, destroying $730 million of shareholder value, during a
very healthy broad equity market and internet/technology investment
environment.
o QUESTIONABLE MANAGEMENT DECISION-MAKING - We believe the poor share
price performance can be traced to management missteps including
misallocation of cash flow into businesses with poor fundamentals and
failure to maximize existing assets. The current board has presided
over this destruction of value and has either approved or acquiesced in
the decision making and capital allocation that we believe led to these
results.
o DETERIORATING FINANCIAL RESULTS - InfoSpace's operating income
(excluding restructuring charges and stock-based compensation) has
deteriorated steadily since the end of 2004, despite positive organic
and acquisition related revenue growth. We believe that this poor
performance has been caused by 1) investment in a risky, and ultimately
failed, mobile growth strategy, 2), failure to maximize profitability
and drive growth at Online and 3) complacency over costs and poor
internal controls.
As the Company's largest shareholder, we believe that the addition of
new qualified and independent shareholder-nominated directors is necessary to
help make critical structural, financial and strategic decisions over the next
year. Specifically, if elected, our Nominees intend to urge the Board to execute
the following initiatives:
o REVIEW COMPOSITION OF ASSETS - IMMEDIATE SALE OF THE REMAINING MOBILE
BUSINESS, FOCUS ON ONLINE SEGMENT, MAXIMIZE USE OF NOLS - We believe
that the ideal strategy involves a sale of the mobile business and
bolstering the operations of the highly profitable and cash generative
online business, simultaneously maximizing the value of the company's
NOLs. We believe that there are several parties who would be interested
in acquiring the mobile business for values well in excess of that
implied by the current share price. Our nominees would push for the
immediate retention of an investment bank to accomplish this strategic
review.
o RETURN OF CAPITAL - THE COMPANY DOES NOT HAVE A SUITABLE USE FOR ITS
GREATER THAN $400 MILLION OF CASH AND A SUBSTANTIAL PORTION OF THIS
CAPITAL SHOULD BE RETURNED TO SHAREHOLDERS - We remain concerned that
as long as the cash remains on the balance sheet, there is a tangible
risk that it will be spent on risky acquisitions. Our nominees would
work expeditiously with the current board and financial advisors to
determine an optimal plan for immediate return of a substantial portion
of the $400 million cash balance through stock repurchases and
distributions. The company's management frequently pays lip service to
a capital return strategy, but the time for deliberation is past and
decisive action should be taken immediately.
o COST CUTTING - THE CONGLOMERATE STYLE CORPORATE STRUCTURE RESULTS IN
UNNECESSARY EXPENSE AND DUPLICATIVE ADMINISTRATIVE LAYERS - We believe
that InfoSpace is burdened with a sub-optimal expense structure that
masks the true profitability of the Online segment. Once the mobile
business is sold, our nominees would work aggressively to simplify the
corporate structure, eliminate duplicative management layers and
provide a more balanced incentive-based compensation structure
company-wide.
We are confident that our Nominees would, if elected, help bring more
accountability, focus and discipline to the way InfoSpace is managed. Our
Nominees are committed to confronting more effectively the critical issues and
decisions facing the Company and, if elected, will seek to ensure that the
company delivers on its opportunities to enhance long-term shareholder value for
all shareholders.
We believe that our Nominees are well suited to help create significant
shareholder value at InfoSpace. Our Nominees are committed to acting in the best
interests of all shareholders. We believe that your voice in the future of
InfoSpace can best be expressed through the election of our Nominees.
ABOUT SANDELL ASSET MANAGEMENT CORP.
Sandell Asset Management Corp. (and affiliated companies), based in New
York, NY, is an investment management firm founded by Thomas E. Sandell that
focuses on
corporate event driven investing worldwide. Sandell often will take an "active
involvement" in facilitating financial or organizational improvements that will
accrue to the benefit of shareholders.
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THIS PRESS RELEASE IS FOR GENERAL INFORMATIONAL PURPOSES ONLY. IT DOES NOT HAVE
REGARD TO THE SPECIFIC INVESTMENT OBJECTIVE, FINANCIAL SITUATION, SUITABILITY,
OR THE PARTICULAR NEED OF ANY SPECIFIC PERSON WHO MAY RECEIVE THIS PRESS
RELEASE, AND SHOULD NOT BE TAKEN AS ADVICE ON THE MERITS OF ANY INVESTMENT
DECISION. THE VIEWS EXPRESSED HEREIN REPRESENT THE OPINIONS OF SANDELL ASSET
MANAGEMENT CORP. (COLLECTIVELY WITH THE FUNDS AND ACCOUNTS UNDER ITS MANAGEMENT,
THE "SANDELL GROUP"), AND ARE BASED ON PUBLICLY AVAILABLE INFORMATION WITH
RESPECT TO INFOSPACE, INC. (THE "ISSUER").
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS ADDRESSED IN
THIS PRESS RELEASE ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE CERTAIN RISKS AND
UNCERTAINTIES. YOU SHOULD BE AWARE THAT ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. THE SANDELL GROUP
ASSUMES NO OBLIGATION TO UPDATE THE FORWARD-LOOKING INFORMATION.
MEMBERS OF THE SANDELL GROUP RESERVE THE RIGHT TO CHANGE ANY OF THEIR OPINIONS
EXPRESSED HEREIN AT ANY TIME, AS THEY DEEM APPROPRIATE. THE SANDELL GROUP
DISCLAIMS ANY OBLIGATION TO UPDATE THE INFORMATION CONTAINED HEREIN.
THIS PRESS RELEASE DOES NOT RECOMMEND THE PURCHASE OR SALE OF ANY SECURITY.
UNDER NO CIRCUMSTANCES IS THIS PRESS RELEASE TO BE USED OR CONSIDERED AS AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY. MEMBERS OF THE
SANDELL GROUP CURRENTLY OWN AN AGGREGATE OF APPROXIMATELY 8.8% OF THE
OUTSTANDING COMMON STOCK OF THE ISSUER. THE SANDELL GROUP INCLUDES FUNDS AND
ACCOUNTS THAT ARE IN THE BUSINESS OF TRADING - BUYING AND SELLING - PUBLIC
SECURITIES. IT IS POSSIBLE THAT THERE WILL BE DEVELOPMENTS IN THE FUTURE THAT
CAUSE ONE OR MORE MEMBERS OF THE SANDELL GROUP FROM TIME TO TIME TO SELL ALL OR
A PORTION OF THEIR SHARES IN OPEN MARKET TRANSACTIONS OR OTHERWISE (INCLUDING
VIA SHORT SALES), BUY ADDITIONAL SHARES (IN OPEN MARKET OR PRIVATELY NEGOTIATED
TRANSACTIONS OR OTHERWISE), OR TRADE IN OPTIONS, PUTS, CALLS OR OTHER DERIVATIVE
INSTRUMENTS RELATING TO SUCH SHARES.
SANDELL ASSET MANAGEMENT CORP. AND CERTAIN OF ITS AFFILIATES AND NOMINEES
(COLLECTIVELY, THE "PARTICIPANTS") FILED A PRELIMINARY PROXY STATEMENT WITH THE
SECURITIES AND EXCHANGE COMMISSION ON APRIL 16, 2006 RELATING TO THEIR
SOLICITATION OF PROXIES FROM THE SHAREHOLDERS OF THE ISSUER WITH RESPECT TO THE
2007 ANNUAL MEETING OF SHAREHOLDERS. THE PRELIMINARY PROXY STATEMENT CONTAINS
DETAILED INFORMATION REGARDING THE NAMES, AFFILIATIONS AND INTERESTS OF PERSONS
WHO MAY BE DEEMED PARTICIPANTS IN THE SOLICITATION OF PROXIES. THE SANDELL GROUP
INTENDS TO FILE A DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS WITH
THE SECURITIES AND EXCHANGE COMMISSION.
SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS
RELATED TO THE SOLICITATION OF PROXIES BY THE PARTICIPANTS FROM THE SHAREHOLDERS
OF THE ISSUER FOR USE AT THE 2007 ANNUAL MEETING OF SHAREHOLDERS OF THE ISSUER
WHEN AND IF COMPLETED BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. WHEN AND IF COMPLETED, A DEFINITIVE PROXY STATEMENT AND
FORM OF PROXY WILL BE MAILED TO SHAREHOLDERS OF THE ISSUER AND WILL, ALONG WITH
OTHER RELEVANT DOCUMENTS, BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND
EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV OR BY CONTACTING MACKENZIE
PARTNERS BY TELEPHONE AT 1-800-322-2885 OR BY E-MAIL AT
PROXY@MACKENZIEPARTNERS.COM.