Table of Contents
Locus Dialogue Inc.
On January 1, 2001, we acquired all of the stock of Locus Dialogue Inc., a developer of speech recognition
enabled applications (now called InfoSpace Speech Solutions). The acquisition was accounted for as a purchase. We issued or will issue
5,114,233 shares of our common stock (1) directly to those Locus Dialogue shareholders who elected to receive our common stock in exchange
for their Locus Dialogue shares at the closing of the acquisition, (2) upon the exchange or redemption of the exchangeable shares of InfoSpace
Speech Solutions Holdings Inc. (formerly Locus Holdings Inc.), an indirect subsidiary of ours, which exchangeable shares were issued to those
Locus Dialogue shareholders who elected to receive exchangeable shares, or who did not make an election to receive shares of our common
stock at the closing, and (3) upon the exercise of options granted to replace options of Locus Dialogue held at the closing. We issued shares
with a fair value of $88.8 million, acquired $8.8 million of net assets and incurred $556,000 in acquisition costs. Included in the calculation of
goodwill is $23.6 million for the fair value of options to purchase 1,173,216 shares we assumed. We also recorded $3.9 million in unearned
compensation for the intrinsic value of the options assumed and for the valuation of 253,175 shares of restricted stock that vest after a one year
service period held by certain former Locus Dialogue employees.
On July 1, 2001, we sold certain operating assets and other rights relating to the Locus Liaison enterprise solution business for $2.7
million. We acquired the Locus Liaison enterprise solution business as part of the acquisition of Locus Dialogue in January 2001. The
operating assets included certain distribution contracts, the assembled Liaison workforce, the Locus Dialogue trademarks, the enterprise
solution inventory and certain fixed assets. In addition, we entered into a license agreement pursuant to which the buyer is licensing Liaison
and SoftDialogue software from us. In connection with the sale of these assets, we recorded a charge in 2001 of $64.7 million related to
writedowns of the assembled workforce, core technology and associated goodwill. The remaining personnel and assets of Locus Dialogue
including the voice application, SpeechPortal and SoftDialogue, are now operated under the name of InfoSpace Speech Solutions.
The boxLot Company.
On December 7, 2000, we acquired substantially all of the assets of boxLot, including its interactive on line
variable pricing technology and dynamic pricing engine, equipment and domain names. Under the terms of the asset purchase, we issued
501,527 shares of common stock and paid cash of $2.6 million. We recorded $9.2 million in goodwill.
On October 12, 2000, we completed our acquisition of Go2Net, Inc., a publicly held provider of applications and
technology infrastructure for narrowband and broadband. Under the terms of the acquisition, which was accounted for as a pooling of interests,
we exchanged 74,154,448 shares of our common stock for all of the preferred and common shares of Go2Net. The consolidated financial
statements are presented as if Go2Net was a wholly owned subsidiary since inception.
iJapan Intellectual Property .
On September 13, 2000, we acquired intellectual property that translates between cHTML and other
major wireless markup languages from iJapan for purchase consideration of $2 million cash. The entire purchase price was recorded as an
In July 1998, we entered into a joint venture agreement with TDLI.com Limited, a subsidiary of Thomson
Directories Limited to form TDL InfoSpace to replicate our content, community and consumer services in Europe. TDL InfoSpace launched
content services in the United Kingdom in the third quarter of 1998. Under the Web site services agreement, Thomson provides its directory
information to TDL InfoSpace and sells Internet yellow pages advertising for the joint venture through its local sales forces. We also license
our technology and provide hosting services to TDL InfoSpace. Thomson and we each purchased a 50% interest in TDL InfoSpace and are
required to provide reasonable working capital to TDL InfoSpace. As of December 31, 1999, we had contributed $496,000 to the joint venture.
We accounted for our investment in the joint venture under the equity method. For the year ended December 31, 1999, we recorded a loss from
the joint venture of $12,000. On August 31, 2000, we acquired TDLI.com Limited, a privately held company based in Hampshire, England that
in turn holds approximately fifty percent of TDL InfoSpace (Europe) Limited, a joint venture originally formed by InfoSpace and Thomson
Directories Limited in July 1998 to replicate InfoSpace's services in Europe. We acquired TDLI.com for purchase consideration of 3,420,308
shares of our common stock and acquisition expenses of $2,105,304. We recorded $118.5 million in intangible assets. We now have 100%
ownership and control of TDL InfoSpace.