Ugh... not the best day I've had.

Just got back from an impromptu all-employee meeting. The news is not good. Cingular is not going to renew a contract with Infospace that provides us with a lot of revenue. There will be significant layoffs. Don't know for sure yet what it means for me, but I'll be surprised if I'm not impacted. Should know in a week or so... Drat.


InfoSpace says revenue will be hurt by loss of customer
By Tricia Duryee
Seattle Times Eastside business reporter

InfoSpace said today that one of its wireless customers no longer needs its services.

Not having that relationship will negatively affect the company's mobile revenues, which totaled almost $90 million in the first six months of this year, the company said in a release.

InfoSpace helps carriers sell ringtones and other content to wireless customers by developing relationships with record labels and other companies.

In the release, issued after the market closed as employees were called to Meydenbauer Center in Bellevue for a companywide meeting, InfoSpace said one of its customers plans to develop direct licensing relationships with the major record labels starting in early 2007.

Because of this, the company said it plans to rationalize its costs to align them with future revenues. Specific plans will be announced within 30 days.

"While we are disappointed in this decision and we will realign costs to reflect the revenue reduction, we maintain a strong presence in mobile infrastructure and search services," said CEO Jim Voelker.

For the past couple of months, Wall Street analysts criticized InfoSpace's business model because they said carriers could work directly with music labels and studios to cut out InfoSpace, which acts like a middleman.

Besides InfoSpace's mobile division, it also generates revenues from its online properties, such as DogPile and Switchboard.