Understanding Infospace And Blucora As A Company From An Investors Perspective

Infospace, also known as BlueCora, is a private label Internet search company

, that provides its services to consumers as well is to businesses. The company's main website, which drives the most business to them is Dogpile, with other brands under the company being DoGreatGood, Metacrawler, and Nation.

The company was first launched in March of 1996, by never Naveen Jain, shortly after he decided that he was going to be leaving Microsoft. He continued to serve as the CEO of the company through the year 2000, and was responsible for hiring the original six employees. The company was also one of the first companies to launch a browser-based chat service, which was heavily used in the early days of the Internet. Before going public, in 1998, the company was able to raise more than $75 million in the offering, allowing them to quickly grow as a company, and help to find additional funding.

In July of 2000, Russell Horowitz became the president of the company, in individual that many credit with using a controversial accounting trick, to report that the company had been able to earn $46 million in profits, when the company had really lost a total of $282 million. This was one of the more controversial accounting tricks ever devised within the tech space, allowing employees to narrowly escaped a huge SEC trading restrictions, and selloff huge amounts of their stock for profit.

Following this, Jain reassume control as CEO of the company in 2001. He stayed only year, before being forced out by the company's board. In 2002, the company had begun to slip very far, with their stock falling from $1305 in early 2000, to a meager $2.67 per share in 2002.

The company then began to shift their focus, acquiring Moviso which is a company that focused on the selling of ring tones, wallpapers, and video games to mobile devices.

In 2003, Naveen Jain Infospace former CEO was sued by the company for violating his noncompete agreement, after taking a role at the company Intelius. Jain was on record as saying that he believed that the lawsuit was without merit, and stated that he thought it was retaliation for the whistleblowing that he had done on the accounting tricks that the company had played earlier in the decade.

Naveen Jain Also came under fire in 2003 when a lower federal court judge ruled that he had violated a six-month insider-trading rule, by purchasing stock in Infospace after leaving the company. Jain appealed the ruling, which had resulted in the $247 million judgment against him. He would eventually go on to settle for a total of $105 million, but continued to deny liability in the case. Jain continued to fight the ruling for many years, but was never able to recover the lost funds.

It was in 2012 that the company rebranded themselves as BlueCora, after selling off many of their acquired companies over the course of the last few years. It is clear that the company has had a lot of problems, with Naveen Jain playing a role in the company's future throughout many years. Although he was not with the company for the accounting trick, as whistleblowing could lead to the fallout of the situation.

by: Jenny White

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