The Company
InfoSpace is a leading aggregator and integrator of content services for syndication to a broad network of affiliates, including existing and emerging Internet portals, destination sites and suppliers of PCs and other Internet access devices, such as cellular phones, pagers, screen phones, television set-top boxes, online kiosks and personal digital assistants. The Company focuses on content with broad appeal, such as business directories and white pages, maps, classified advertisements, real-time stock quotes, information on local businesses and events, weather forecasts and horoscopes. By aggregating content from multiple sources and integrating it with related content to increase its usefulness, the Company serves as a single source of value-added content.

The Company’s affiliates include AOL, ITN, Virgin Radio, Carlton Online, Electronic Telegraph, NME, WH Smith. The Company’s services provide affiliates with content that helps to increase the convenience, relevance and enjoyment of their users’ visits, thereby promoting increased traffic and repeat usage. This, in turn, provides enhanced advertising and electronic commerce revenue opportunities to affiliates with minimal additional investment. By leveraging the Company’s content relationships and technology, affiliates are free to focus on their core competencies.

The Company has acquired the rights to a wide range of content from more than 65 third-party content providers. The cornerstone of the Company’s content services is its nationwide yellow pages and white pages directory information. Using its proprietary technology, the Company integrates this directory information with other value-added content to create ‘‘The Ultimate Guide’’ to find people, places and things in the real world. As an example of the power of the Company’s contextual integration, a salesperson using the Company’s content services can, from the results of a single query, find the name and address of a new customer, obtain directions to his or her office, check the weather forecast and, typically, make an online reservation at the nearest hotel, browse the menu of a nearby restaurant and review a schedule of entertainment events for the locale.

The Company’s content services are designed to be highly flexible and customizable, enabling affiliates to select from among the Company’s broad range of content services only those desired. One of the Company’s principal strengths is its internally developed technology, which enables it to easily and rapidly add new affiliates by employing a distributed, scalable architecture adapted specifically for its Internet-based content services. The Company helps its affiliates build and maintain their brands by delivering content with the look and feel and navigation features specific to each affiliate, creating the impression to end users that they have not left the affiliate’s site. The Company’s technology has been designed to support affiliates across multiple platforms and formats, including the growing number of emerging Internet access devices. The Company’s affiliate relationships typically provide for revenue sharing from advertising sold by the Company and the affiliates whose sites incorporate the Company’s content where advertisements are placed.

InfoSpace derives substantially all of its revenues from national advertising, promotions and local Internet classified directory advertising. Through its direct sales force, the Company offers a variety of national advertising and promotions that enable advertisers to access both broad and targeted audiences. The Company also sells local Internet classifed directory advertising through cooperative sales relationships with established directory publishers, media companies and direct marketing companies. The Company believes that these relationships provide the Company access to local sales expertise and customer relationships that give it an advantage over competitors while minimizing the Company’s investment in its own sales infrastructure.