InfoSpace to Acquire Switchboard Incorporated; Establishes InfoSpace as the Leading Online Yellow Pages Provider
BELLEVUE, Wash. & WESTBOROUGH, Mass.--March 26, 2004--InfoSpace, Inc. (Nasdaq:INSP) and Switchboard Incorporated (Nasdaq:SWBD) today announced a definitive agreement for InfoSpace to acquire Switchboard, a leading provider of local online advertising solutions and internet-based yellow pages, for $7.75 per share or approximately $160 million in cash. As of December 31, 2003, Switchboard had approximately $55.9 million in cash and marketable securities and no debt.
The acquisition significantly increases the Company`s online directory traffic and establishes InfoSpace as the leading online directory provider in the United States. According to comScore/MediaMetrix, InfoSpace and Switchboard`s combined network of owned and operated sites and distribution partners comprises approximately 23% of total online yellow pages searches.
"We are excited to take a defining step in the growing local search and directory opportunity," said Jim Voelker, chairman and chief executive officer of InfoSpace, Inc. "Through this acquisition, we nearly double our share of online directory traffic, gain a proven technology platform and add several new and important partner relationships. Combined, we assume a leadership role in a market growing as fast as web search, and position ourselves to leverage our complementary assets in web search and online directory."
"We believe that by combining the respective strengths of our two companies, we can accelerate the migration and adoption of online local advertising," said Dean Polnerow, president and chief executive officer of Switchboard Incorporated. "Today`s announcement is a leap forward for the industry, and for those of us who share the vision that online yellow pages is on the fast track to playing a central role in helping local advertisers reach consumers."
Yellow pages directories are a primary source of local merchant information for consumers. According to The Kelsey Group, the yellow pages industry generates nearly $15 billion in annual advertising sales in the United States, and is experiencing a migration from print-based consumer searches to online searches. In 2003, the online directory market was approximately $450 million, and is growing rapidly. According to the June 2003 Kelsey Group report titled "Searching for Profits: Yellow Pages and the Challenge of Pay-per-Click," The Kelsey Group projects the number of online yellow pages searches to grow 25% annually and to account for more than 30% of total yellow pages searches by 2006.
Switchboard is a leading provider of local online advertising products for merchants, national advertisers and distribution partners, enabled by innovative, consumer-oriented, online yellow and white pages directory technology. Switchboard`s technology benefits both consumers and merchants by combining the depth of information found in printed directories with the interactive, real-time nature of the Web. In addition to generating traffic directly through www.switchboard.com, Switchboard licenses its products to Internet portals, traditional yellow pages publishers, and newspaper publishers to enable them to offer local online advertising solutions and yellow and white pages directories under their own brands.
The transaction is expected to close in the second half of 2004, subject to certain conditions including approval by Switchboard shareholders, the shareholders of Switchboard`s majority shareholder, ePresence, Inc., and regulatory authorities.
Assuming the Switchboard acquisition closes on or near July 1, 2004, InfoSpace anticipates Switchboard will contribute approximately $10 - $12 million in revenue and $4 - $5 million in Search & Directory segment income for the second half of 2004.
About InfoSpace, Inc.
InfoSpace, Inc. (Nasdaq:INSP) is a diversified technology and services company that develops Internet and wireless solutions for a wide range of customers. InfoSpace Search & Directory provides Web search and online directory products that help users find the information they need while creating opportunities for merchants. InfoSpace Mobile develops infrastructure, tools and applications that enable carriers and content providers to efficiently develop and deliver mobile data services across multiple devices. InfoSpace Payment Solutions enables merchants to authorize, settle and manage electronic transactions via its IP-based payment gateway, Authorize.Net. More information can be found at http://www.infospaceinc.com.
About Switchboard Incorporated
Switchboard (Nasdaq:SWBD) is a leading provider of local online advertising products for merchants and national advertisers, enabled by innovative, consumer-oriented, online yellow and white pages directory technology. Through Switchboard`s local search, advertisers are able to get their message in front of consumers at the time they are looking for that merchant`s products or services on the Internet, driving local commerce through online innovation. Switchboard is headquartered in Westborough, MA. ePresence (Nasdaq:EPRE) owns approximately 51.0% of the outstanding shares of Switchboard. More information can be found at http://www.switchboard.com.
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