Just 13 months ago, InfoSpace gobbled up the assets of Mercantila for $8 million in cash and the assumption of $5.9 million in debt. Now, InfoSpace says that the operator of online specialty stores is no longer a fit for its business. The Bellevue company said that it has entered into an agreement to sell Mercantila to Zoo Stores Inc. for a “nominal upfront payment” as well as the ability to receive up to $3 million in the future.
“InfoSpace’s management no longer believes that the Mercantila business fits within InfoSpace’s strategy as it moves forward,” the company wrote in a SEC filing today. “As a result, while the net loss from operating the Mercantila business continues to improve, InfoSpace’s management believes this transaction is the best outcome for shareholder value.”
If the transaction with Zoo Stores does not go through, InfoSpace said that it either will try to find another buyer or close down Mercantila.
The acquisition of Mercantilia was led by William Lansing, the InfoSpace CEO who left the company last November. At the time, Lansing said that Mercantila represented “the first step in our differentiated e-commerce strategy.” With Lansing gone, that strategy appears to very much be on the back burner.
As we’ve stated before, InfoSpace has a strong balance sheet which it plans to use to expand. It has no debt obligations, and at the end of the last quarter it reported $249 million in cash and cash equivalents.
InfoSpace recently tapped Bill Ruckelshaus as CEO, and appointed former AT&T exec Steve Hooper to the board. InfoSpace continues to operated Internet search engines such as Dogpile and Metacrawler, with the company posting revenue of $61.6 million last quarter.