Blucora, Inc. (BCOR)

[rudy-carter]

Thursday, July 21, 2005
InfoSpace -A Trust Company?
VeriSign is suppose to be the company you trust. You know the motto, trust and work with VeriSign with your communication, commerce, and content needs. Isn't it ironic that there biggest growth driver until yesterday, was Jamster, notoriously known for unethical business practices banking on the impulse buy and people not reading the fine print of all the extra surcharges and subscriptions fees?

Then there is InfoSpace, which once was referred to by Henry Blodget as "junk", who after ousting it's free wheeling founder and CEO Naveen Jain was left with a tarnished reputation with wall street and left to die, a penny stock. Enter Jim Voelker, a straight shooting conservative. He seemed to be able to sell the right businesses, keep the ones with value like metasearch and make some fabolous deals. In no time it's reputation started to turn to one of trust. So much so that InfoSpace provides more than 90% of it's ringtones on the Cingular portal and wap decks.

The acquisition of Moviso seemed to be the critical driver in getting InfoSpace on track. At the time of purchase Moviso had more than 70% market share in the ringtone business of North America. So this company had serious prospects ahead of them. At the time they were owned by NBC Universal. Let's examine the magnitude of this deal.
NBC Universal knew it was imperative for them to get digital revenues from their artists which include: 50cent, Eminem, Jay-Z, or just the biggest selling artists today.

They didn't go to VeriSign, the supposed trust company, or Yahoo the company with the biggest online reach, but to little ole' InfoSpace. That showed you right there that InfoSpace had juice. Insp bought Moviso for 25 million. What is there ROI thus far? Well just last quarter alone mobile revenues came in at 39 million dollars!! And that was just InfoSpace's cut, imagine what the record labels and carriers pocketed!! It's no doubt that InfoSpace took the industry to the next level in North America.

Will trust services go away? Well imagine this, you are the record labels and your artists ringtones are on the Cingular networks. How would you be able to track the amount of downloads that Cingular actually downloaded? Or if your Cingular and your working with a off portal site, you are hit with a hefty bill with the site claiming that their artists sold 3 million ringtones and to pay up. But your numbers and theirs don't add up? That's why you need a trusted third party partner that both companies can respect to provide billing to make sure all get paid.

InfoSpace has been knocked by not creating their own mobile content, but it appears that they are becoming a trust services partner in the mobile content business which may prove to be way more valuable then pimping the crazy frog!! Stay tuned for earnings July 27th!!

http://inspfans.blogspot.com/