Dot Con: How Infospace Took Investors For A Ride 161
Jeff writes "On the subject of the dot com crash, the Seattle Times recently ran an outstanding three day series on the corruption at Infospace, with a follow up today on the company's continued relations with its founder, Naveen Jain. Sunday's cover photo of Jain's new office shows a birthday photo of himself and another self-portrait in the background. Only the reflecting pool is missing."
Re:Screw the greedy capitalist exploiters (Score:3, Interesting)
Yeah, but the way this stuff reads they're companies along the lines of Enron. Shuffling investor money around to report as revenue and then running away with a fortune before the truth hits.
It's not that investors are greedy, they're like you and me and would like a good return on their money and are attracted to businesses which seem to be doing it better than others. Where they fail is in doing good research on the company or actually being defrauded.
I interviewed there once... (Score:5, Interesting)
He was using binary search to look through what he was estimating would be about a million records on disk.
Perhaps it was a mistake to explain that using a hash table would find the correct record in an average of 1.5 disk hits, as opposed to the 19 that his system was taking, because they didn't offer me a job. Then, again, maybe it wasn't a mistake-- after all, I didn't end up working there.
Re:I interviewed there once... (Score:5, Interesting)
It was at that point that I began to wonder if things weren't quite right with Infospace.
tech, who? (Score:3, Interesting)
What about employees? (Score:5, Interesting)
I was a member of the famed wireless division, who was all laid off because we didn't make the company any money. This was after Jain et al took the company for a ride and nearly got us delisted. I disliked senior management, but my peers at the company were some of the best people I've ever known or worked with, and I still miss that environment.
Whenever Naveen or Anu (his wife) would get infront of the company and speak, I instantly felt slimy. I got the worst vibes from the man. He honestly thinks he's a fantastic person and was the best thing to ever happen for the company and anyone involved. I hope they have fun explaining to their children how they robbed their trust funds in their insider trading scandal.
Shortly after my last day in December 2003, the entire executive board was replaced. Now InfoSpace is posting good numbers and wireless makes money.
Coincidence? I think not.
My Experience with Naveen and Infospace (Score:5, Interesting)
I first met Naveen Jain while he was still with Microsoft. It was 1995, and Naveen was telling a bunch of Time Inc. New Media honchos (the folks that brought the world Pathfinder - remember that? First commercial website?) that the Internet was _dead_.
It seems that Microsoft was intent on replacing all Internet technologies with its own "embraced and extended" versions. A binary version of HTML that allowed for 8 different types of hyperlinks. IRC, but with additional functions. That kind of thing. Pathfinder would be extinguished as the commercial Internet baby was stabbed in the cradle by the upcoming "Winternet". No kidding, he used that term.
The Time Inc. honchos ponied up a huge sum to get Pathfinder's url on the upcoming MSN. In classic Microsoft style, they took the money, and then hid the icon several levels of navigation down. No one ever saw it, but then again, MSN 1.0 had very few users anyway.
Naveen started Infospace, and I was sent on a fact-finding group mission to see if Pathfinder wanted to use their technology. Their office looked like a dump - they didn't have a data center, they had a huge mass of PCs piled almost randomly, hooked to the Internet. That was Infospace in '96/'97. They were so arrogant that they thought that'd impress the folks from Time Inc, who served Pathfinder on Sun (and only Sun), and had a datacenter that was a model of datacenters. I remember Time Inc. sysadmins' argument about whether the faraday cage was constructed correctly... but I digress.
At any rate, the best part of the tour was Jean-Remy showing off all of their home-grown technology. He claimed that _everything_ was home grown - database servers, DNS, web, even the operating system (!). In fact, he confided to me that he had "borrowed the best pieces of NT", including the kernel, in creating their home-grown operating system. And as others have said, he bragged endlessly about how his database was faster than Oracle.
As before, Time Inc. drank the Kool-Aid and signed up with Infospace - despite these kinds of issues - because they thought that they had to do so, for some stupid
Naveen Jain is an amazing huckster, I'll give him that. Pity that he escaped the SEC's special brand of torture.
Sounds like it's Infospace's turn (Score:2, Interesting)
Naveen Jain seems to be at the reins, making a company that directly competed with his previous company incite a war, make Infospace come to an agreement. And now they are partners, with Naveen Jain still getting paid in essence by Infospace, regardless of his current companys success or lack thereof.
If Infospace had any brains they would get rid of all affiliation with its former founder where he obviously knows how to play his cards. Which has never been good news for Infospace in the past, and likely not in the future.
[cx]
Business as usual (Score:2, Interesting)
I think we are starting to realize that after the .com boom, bust and now resurgence these businesses are just like all other businesses. You will find the rebel upstarts who do rocket to fame and fortune, the solid business model, and the Enron type corruption.
During the boom it seemed the .coms were beyond real business....almost "magical". The sector is maturing and along with this comes all the problems that have plagued business since time began because behind all the slick tech are people, common ordinary imperfect people (sorta like Soylent Green----IT"S PEOPLE!!!)
I do think that there will be good times to come in the tech sector, but this will need to be founded on the same fundamentals that all successful businesses require.
Re:I interviewed there once... (Score:3, Interesting)
Do I need to mention that the II in question was Bill Gates?
Could it have happened in the Valley? (Score:3, Interesting)
Anyone from the Valley care to comment? Seems to me that I remember someone who cheated his garage partner and is a CEO today. If someone is making money for investors, or creating the illusion of making money for investors, can s/he really get blackballed?
If there's really something about the Northwest that makes scandals more likely, then what exactly is the difference?
Re:So what's the lesson here? (Score:3, Interesting)
What is happening with those executives who were the most responsible for the bubble are being punished. There are guys sitting in federal prisons. What more do you want? Investment is, by its very nature, a gamble.