10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number 000-25131

INFOSPACE, INC.

(Exact name of registrant as specified in its charter)

Delaware	91-1718107
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

601 108th Avenue NE, Suite 1200, Bellevue, Washington 98004

(Address of principal executive offices) (Zip code)

Registrant’s telephone number, including area code:

(425) 201-6100

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $.0001 per share	NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act:

Series C Participating Preferred Stock

(Title of Class)

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨    No x

Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨    No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x     No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨        Accelerated filer x        Non-accelerated filer ¨        Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨     No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant outstanding as of June 30, 2008, based upon the closing price of Common Stock on June 30, 2008 as reported on the NASDAQ Global Select Market, was $166.9 million. There is currently no non-voting common equity outstanding. Shares of voting stock held by each officer and director and by each person who owns 5% or more of the outstanding voting stock (as publicly reported by such persons pursuant to Section 13 of the Securities Exchange Act of 1934) have been excluded because such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of February 23, 2009, 34,927,007 shares of the registrant’s Common Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates certain information by reference from the definitive proxy statement to be filed by the registrant in connection with the 2009 Annual Meeting of Stockholders (the “Proxy Statement”).

TABLE OF CONTENTS

Part I
Item 1.	Business	3
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	26
Item 2.	Properties	27
Item 3.	Legal Proceedings	27
Item 4.	Submission of Matters to a Vote of Security Holders	27
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	27
Item 6.	Selected Financial Data	29
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 8.	Financial Statements and Supplementary Data	54
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	89
Item 9A.	Controls and Procedures	89
Item 9B.	Other Information	91
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	92
Item 11.	Executive Compensation	92
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	92
Item 13.	Certain Relationships and Related Transactions, and Director Independence	92
Item 14.	Principal Accountant Fees and Services	92
Part IV
Item 15.	Exhibits and Financial Statement Schedules	93
Signatures		97

This report contains forward-looking statements that involve risks and uncertainties. You should not rely on forward-looking statements. The statements in this report that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “anticipate,” “believe,” “plan,” “expect,” “future,” “intend,” “may,” “will,” “should,” “estimate,” “predict,” “potential,” “continue,” and similar expressions to identify such forward-looking statements. These forward-looking statements include, but are not limited to:

• statements regarding new and future products and services;

• statements regarding our strategic direction, future business plans and growth strategy;

• statements regarding anticipated changes in economic conditions or the financial markets, and the potential impact on our business, results of operations and financial condition;

• the expected demand for and benefits of our products and services for our customers and distribution partners;

• statements regarding the successful execution of the our strategic initiatives;

• statements regarding seasonality of revenue and concentration of revenue sources;

• anticipated development or acquisition of intellectual property and resulting benefits;

• anticipated results of potential or actual litigation;

• statements regarding our competitive environment;

• statements regarding the impact of governmental regulation;

• statements regarding the retention of management and key employees;

• anticipated revenue and expenses, including the sources of such revenue and expenses;

• statements regarding expected impacts of changes in accounting rules;

• statements regarding use of cash, cash needs and ability to raise capital;

• statements regarding the condition of our cash investments; and

• statements regarding potential liability from contractual relationships.

Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance, achievements and prospects, and those of the Internet industries generally, to be materially different from those expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, among others, those identified under Item 1A, “Risk Factors” and elsewhere in this report.

ITEM 1. Business

Overview

InfoSpace, Inc. (“InfoSpace”, “our” or “we”) develops search tools and technologies that assist consumers with finding content and information on the Internet. We offer search services that enable Internet users to locate and view content, information, merchants, individuals, and products online. We offer search services through our Web sites, such as Dogpile.com, WebCrawler.com, MetaCrawler.com, and WebFetch.com, as well as through the Web properties of distribution partners. Partner versions of our Web offerings are generally private-labeled and delivered with each distribution partner’s unique requirements.

Our search offerings differ from most other mainstream search services in that they utilize our “metasearch” technology that selects results from several search engines, including Google, Yahoo!, and MSN, among others, which serve as our content providers.

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We compete against other providers of Web search services. We also compete against more traditional media, including radio, network and cable television, newspaper, magazines, Internet, direct mail and others for a share of the U.S. advertising media market.

We were founded in 1996 and are incorporated in the state of Delaware. Our principal corporate office is located in Bellevue, Washington. We also have an office in Bangalore, India. Our common stock is listed on the NASDAQ Global Select Market under the symbol “INSP.”

From 2004 to 2007, InfoSpace was comprised of three businesses: online search, online directory, and mobile. The mobile business was comprised of a mobile content product offering and a mobile services offering. In 2006, as a result of being informed by one of our carrier partners that it intended to develop direct relationships for mobile ringtone content with the major record labels beginning in 2007, we restructured our operations and substantially reduced our mobile content offerings in 2007. In 2007, we completed the sale of a significant portion of our remaining mobile content assets for $3.8 million. On October 31, 2007, we completed the sale of our directory business to Idearc Inc. for $225 million in cash. On December 28, 2007, we completed the sale of our mobile services business to Motricity, Inc. for $135 million in cash. Following the sale of our mobile and directory businesses, our revenues are derived exclusively from providing online search services.

The operating results of the directory and mobile businesses have been presented as discontinued operations in our consolidated financial statements for all periods presented. The process used to separately present continuing and discontinued operations relied on certain estimates and assumptions, and the historical results of operations presented in our consolidated financial statements do not necessarily reflect the results that would have existed had we provided our online search services as a standalone business throughout the periods presented. Due to the rapidly evolving nature of our business, overall market conditions and the process used to separately present continuing and discontinued operations, we believe that comparisons of our 2008 operating results to prior years are not necessarily meaningful, and you should not rely upon them as indications of future performance.

Company Internet Site and Availability of SEC Filings.    Our corporate Internet site is located at www.infospaceinc.com. We make available on that site our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as any amendments to those filings, and other filings we make electronically with the U.S. Securities and Exchange Commission (the “SEC”). The filings, as well as our Code of Conduct and Ethics, can be found in the Investor Relations section of our site and are available free of charge. Information on our Internet site is not part of this Annual Report on Form 10-K. In addition, the SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding us and other issuers that file electronically with the SEC.

Seasonality

Our search services are affected by seasonal fluctuations in Internet usage, which generally declines in the summer months and weeks following the holiday shopping season in December.

International Operations

We have historically generated most of our revenues from customers in the United States. Revenue generated from customers in the United States accounted for 97% in 2008, 97% in 2007, and 98% in 2006 of our total revenues in those years and we expect to generate a substantial majority of our revenues from customers in the United States for the foreseeable future.

Revenue Sources

We receive revenues from certain of our content providers, whom we refer to as our customers, when an end user of our Web search services clicks on a paid search link that is provided by a customer and displayed on our

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Web site or displayed on the Web property of a distribution partner. Revenues are recognized in the period in which a paid click occurs and are based on the amounts earned and remitted to us by our customers for such clicks. In addition, we earn revenue from certain distribution partners, such as a fixed monthly fee in exchange for portal infrastructure services.

Our customers are primarily search content providers. We derive a significant portion of our revenue from a small number of customers and we expect that this concentration will continue in the foreseeable future. Google and Yahoo! each accounted for more than 10% of our revenues in 2008 and jointly accounted for 95% or more of our revenues in 2008, 2007, and 2006.

Our main customer agreements are with Google and Yahoo! and each agreement expires in 2011. Each agreement may be renewed only upon mutual written agreement of the parties to the agreement. Through our Google and Yahoo! agreements, we license rights to certain search products and services from each party, including both non-paid and paid search links for use on our Web sites and the Web properties of our distribution partners. We derive revenues from the search products and services we use and distribute from Google and Yahoo! when an end user of our Web search services clicks on a paid search link that is provided by either Google or Yahoo! and displayed on one of our Web sites or on a Web property of one of our distribution partners. Both Google and Yahoo! reserve certain rights of approval over the use and distribution of their respective search products and services, and has requirements and guidelines regarding such use and distribution. If we or our search distribution partners fail to meet the requirements and guidelines promulgated under these customer agreements, Google and Yahoo! have certain rights under the agreements to suspend or terminate our or our distribution partners’ use and distribution of such customer’s search products and services, and in the event of certain violations, to terminate their agreement with us. We and our distribution partners have limited rights to cure breaches of the requirements and guidelines, and both Google and Yahoo! may modify certain requirements and guidelines of their agreement with us pursuant to the terms of such agreement.

Google and Yahoo! each make certain representations and warranties to us in the agreements regarding their search products and services, and we make certain representations and warranties in the agreements regarding our use and distribution of their search products and services. The agreements also provide for various indemnification obligations of the parties with respect to the content and services of each party, and our distribution partners’ use and distribution of Google and Yahoo!’s search products and services.

Product Development

We believe that our technology is essential to expand and enhance our products and services and maintain the attractiveness and competitiveness of our products and services. Product development expenses were $9.9 million in the year ended December 31, 2008, $9.9 million in the year ended December 31, 2007, and $6.8 million in the year ended December 31, 2006.

Intellectual Property

Our success depends significantly upon our technology and intellectual property rights. To protect our rights, we rely on a combination of copyright and trademark laws, patents, trade secrets, confidentiality agreements with employees and third parties and protective contractual provisions. Most of our employees have executed confidentiality and non-use agreements that contain provisions prohibiting the unauthorized disclosure and use of our confidential and proprietary information and that transfer to us any rights they may have in copyrightable works or patentable technologies that they may develop while under our employ. In addition, prior to entering into discussions with third parties regarding our business and technologies, we generally require that such parties enter into nondisclosure agreements with us. If these discussions result in a license or other business relationship, we also generally require that the agreement setting forth the parties’ respective rights and obligations include provisions for the protection of our intellectual property rights. For example, the standard language in our agreements with distribution partners provides that we retain ownership of all patents and

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copyrights in our technologies and requires them to display our patent, copyright and trademark notices, as appropriate.

We hold 40 U.S. registered trademarks and 75 foreign trademarks registered in various countries. We also have applied for registration of certain service marks and trademarks in the United States and in other countries, and will seek to register additional marks in the U.S. and foreign countries, as appropriate. We may not be successful in obtaining registration for the service marks and trademarks for which we have applied or maintaining the registration of existing marks.

We hold 12 U.S. patents. Our issued patents relate to online search, advertisement and location services, among others. We are currently pursuing certain pending U.S. and foreign patent applications that relate to various aspects of our technology. We anticipate on-going patent application activity in the future. However, patent claims may not be issued and, if issued, may be challenged or invalidated by third parties. In addition, issued patents may not provide us with any competitive advantages.

Despite our efforts to protect our rights, unauthorized parties may copy aspects of our products or services or obtain and use information, marks or technology that we regard as proprietary. The laws of some foreign countries do not protect proprietary rights to as great an extent as do the laws of the United States, and it is often more difficult and costly to enforce our rights in foreign jurisdictions. In addition, others could independently develop substantially equivalent intellectual property. If we do not effectively protect our intellectual property, or if others independently develop substantially equivalent intellectual property, our business could suffer.

Companies and individuals in the Internet software and application services industry, as well as the arts and entertainment industry, have frequently resorted to litigation regarding intellectual property rights. We may have to litigate to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of others’ proprietary rights which are sometimes not clear or may change. From time to time, we have received, and may receive in the future, notice of claims of infringement of others’ proprietary rights. Responding to any such claims could be time-consuming, result in costly litigation, divert management’s attention, cause product or service release delays, require us to redesign our products or services or require us to enter into royalty or licensing agreements. If a successful claim of infringement were made against us and we could not develop non-infringing technology or license the infringed or similar technology on a timely and cost-effective basis, our business could suffer.

Competition

We operate in the online search market, which is extremely competitive and rapidly changing. Our current and prospective competitors include many large companies that have substantially greater resources than we have, some of whom are also our customers, and many small and start-up companies with a large variety of competitive products and services. We believe that the primary competitive factors in the market for online search services are:

• our customers going direct to our distribution partners to provide the distribution partners with the customers’ online search services and products;

• the ability to meet the specific information, content, and service demands of a particular Web property;

• the cost-effectiveness, reliability and security of the products and application services;

• the ability to provide products and application services that are innovative and attractive to consumers and other end users;

• our competitors may provide products or applications services, such as embedded search browsers or downloadable applications, to our end users that displace our search services;

• the ability to develop innovative products and services that enhance the appearance and utility of the Web properties;

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• the ability to meet the needs of major customers and distribution partners; and

• the ability of our competitors to develop and market new or enhanced products and search services.

Although we believe that no one competitor offers all of the products and services we do, our primary offerings face competition from various sources. We compete, directly or indirectly, in the following ways, among others:

• our customers are also our competitors, such as Google and Yahoo!;

• our online search services also compete against more traditional media, including radio, network and cable television, newspaper, magazines, Internet, direct mail and others for a share of the U.S. advertising market;

• other information and content services we provide compete with specialized content providers; and

• in international markets, in addition to competing with U.S.-based search providers, we compete with local companies which may have a competitive advantage due to their greater understanding of and focus on a particular local market.

We expect that in the future we will experience competition from other Internet application companies, as well as from other content providers. Some of these potential competitors are currently customers or distribution partners of ours, the loss of which could harm our business.

Many of our current customers have had relationships with some of our current and potential future distribution partners. If our customers develop software and application services that are superior to ours, or that achieve greater market acceptance than ours, our business will suffer.

Governmental Regulation

Because of the increasing use of the Internet, U.S. and foreign governments have adopted or may in the future adopt laws and regulations relating to the Internet, addressing issues such as consumer protection, user privacy, security, pricing, age verification, content, taxation, copyrights and other intellectual property, distribution, advertising and product and services quality.

Recent concerns regarding Internet user privacy have led to the introduction of U.S. federal and state legislation to protect user privacy and data security. Existing federal laws regarding user privacy that we may be subject to include the Children’s Online Privacy Protection Act, which regulates the online collection of personal information from children under 13, and the Gramm-Leach-Bliley Act, which regulates the collection and processing of personal information by financial institutions as well as imposes information security obligations. In addition, the Federal Trade Commission (the “FTC”) has used its authority to regulate unfair and deceptive trade practices to investigate and regulate user privacy and data security concerns, and such investigations or regulation could adversely affect our business. Various states have likewise sought to regulate consumer protection, advertising, privacy and data security in ways that may affect the collection, use and disclosure of information. For example, California has passed several laws relating to the collection, storage and distribution of personal information, requiring in part the posting of a privacy policy and disclosure of how information is shared with third parties for marketing purposes as well as obligating businesses to secure such information. We could become subject to new laws and regulations that could limit or prohibit our ability to distribute our products and services, conduct targeted advertising, collect, use or transfer user information or impose new data security requirements that could require us to expend substantial resources. In addition, numerous states now require that companies notify individuals of security breaches that may result in third parties gaining unauthorized access to certain types of personal information. We believe we take reasonable steps to protect the security and confidentiality of the information we collect and store but there is no guarantee that third parties will not gain unauthorized access despite our efforts or that we will not incur costs in complying with our notification obligations under such circumstances.

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Many countries outside of the United States have more restrictive privacy laws than the United States. The European Union, for example, strictly regulates the collection, use and transfer of personal information of its residents. Further, information lawfully collected in the European Union may not be transferred for processing outside the European Union to a country that lacks adequate protections. The European Union has deemed the U.S. to lack such protections and transfers of personal information gathered in the European Union to the United States are only permitted under limited circumstances. Additionally, regulatory authorities in the European Union increasingly take a different view from the U.S. with respect to what constitutes personal information, especially in the context of IP addresses. The European Union also increasingly seeks to regulate the duration for which a business can maintain information it has collected. Other countries such as Canada follow models similar to the European Union albeit without express prohibitions on data export. These and similar restrictions may limit our ability to collect, use, and transfer information regarding Internet users in those countries.

We may be subject to provisions of the Federal Trade Commission Act and similar state laws that regulate consumer protection and advertising in all media, including the Internet, and require advertisers to substantiate advertising claims before disseminating advertising. The FTC and various state attorneys general have recently brought actions charging deceptive advertising via the Internet and may actively monitor Internet advertising. The United States and various individual states have also enacted restrictions on advertising through other media. For example, in the United States, the Telephone Consumer Protection Act, “Do Not Call” legislation and similar state laws regulate the manner in which we may advertise goods and services via telephones and facsimiles.

Other countries similarly regulate direct and indirect marketing. For example, the European Union has enacted an electronic communications directive that imposes certain restrictions on the use of cookies and action tags as well as the sending of unsolicited communications. Also, like the United States, the members of the European Union and other countries each may have localized consumer protection, advertising, and privacy related legislation that may impose additional costs or limit our ability to conduct business in such regions and elsewhere.

These or other laws or regulations that may be enacted in the future could have adverse effects on our business, including higher regulatory compliance costs, limitations on our ability to provide some services in some countries, and liabilities which might be incurred through lawsuits or regulatory penalties.

Employees

As of February 23, 2009, we had 160 employees. None of our employees are represented by a labor union and we consider employee relations to be positive. There is significant competition for qualified personnel in our industry, particularly for software development and other technical staff. We believe that our future success will depend in part on our continued ability to hire and retain qualified personnel.

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Executive Officers and Directors of the Registrant

The following table sets forth certain information as of February 23, 2009 with respect to our executive officers and directors:

Name	Age	Position
William J. Lansing	50	Chief Executive Officer, President and Director
David B. Binder	39	Chief Financial Officer and Treasurer
Michael J. Glover	46	Vice President, Distribution and Business Development
Sunil Thomas	39	Chief Technology Officer
Stuart C. West	39	Vice President, Corporate Development and Chief Strategy Officer
Eric M. Emans	35	Chief Accounting Officer
Alejandro C. Torres	46	General Counsel and Secretary
James F. Voelker	57	Chairman
John E. Cunningham, IV	51	Director
Jules Haimovitz	58	Director
Richard D. Hearney	69	Director
William J. Ruckelshaus	44	Director
Lewis M. Taffer.	61	Director
George M. Tronsrue, III	52	Director

William J. Lansing has served as our Chief Executive Officer and President, and as a director, since February 2009. From December 2003 to October 2007, Mr. Lansing served as Chief Executive Officer, President and as a director of ValueVision Media, Inc., a direct marketing company. From September 2001 to December 2003, he served as a General Partner of General Atlantic LLC, a private equity investment firm. From April 2000 to August 2001, he was Chief Executive Officer of NBC Internet, Inc., an integrated Internet media company. From April 1998 to March 2000, he served as President, then as Chief Executive Officer, of Fingerhut Companies, Inc., a direct marketing company. From November 1996 to May 1998, Mr. Lansing served as Vice President, Corporate Business Development for General Electric Company. Mr. Lansing serves on the Board of Directors of Fair Isaac Corporation, Digital River, Inc. and RightNow Technologies, Inc.

David B. Binder has served as our Chief Financial Officer and Treasurer since January 2008. Mr. Binder joined InfoSpace as Vice President of Finance in October 2004. From November 2001 to October 2004, he served as Director, and later Senior Director, of Business Development at drugstore.com, Inc., an online drug store.

Michael J. Glover has served as our Vice President, Distribution and Business Development since October 2008. Mr. Glover has held various positions in Business Development since joining InfoSpace in October 2000. From April 2008 to September 2008, he served as Vice President, Business Development. From April 2006 to March 2008, he served as Senior Director, Business Development, after serving as Director, Business Development from June 2004 to April 2006. From January 2004 to June 2004, he served as Senior Manager, Business Development, after serving as Business Development Manager from October 2000 to December 2003.

Sunil Thomas has served as our Chief Technology Officer since January 2008. Mr. Thomas has held various engineering positions since joining InfoSpace in 1999. From May 2006 to December 2007, Mr. Thomas served as Vice President, Engineering. From April 2006 to May 2006, he served as Senior Director, Engineering after serving as Director of Engineering from January 2004 to April 2006. From December 1999 to December 2003, he served as Senior Development Manager.

Stuart C. West has served as our Vice President, Corporate Development and Chief Strategy Officer since October 2008. From September 2006 to January 2008, Mr. West served as a Vice President of Operations

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Finance at Yahoo! Inc., an internet company. From December 2000 to September 2006, he served in various roles at digital video recorder company TiVo Inc., most recently as Acting Chief Financial Officer. Mr. West has also served as a business development executive and consultant at Silicon Valley software and service startups.

Eric M. Emans has served as our Chief Accounting Officer since January 2008. Mr. Emans joined the Company as Corporate Controller in September 2006. However, Mr. Emans had previously held various positions at the Company from September 2003 to December 2005, including Manager, Revenue Assurance and Senior Manager, Finance. From December 2005 to September 2006, he served as Director, Mobile Operations, at Corbis Corporation, a provider of visual content and rights services. From June 1999 to September 2003, he served as Auditor at Deloitte & Touche, LLP, an accounting firm.

Alejandro C. Torres has served as our General Counsel and Secretary since January 2008. Mr. Torres joined InfoSpace in June 2003 as Senior Corporate Counsel. From October 1993 to June 2003, he served as an attorney at Riddell Williams, P.S., a major Seattle law firm, where he was a member of the firm’s corporate, mergers and acquisitions, and finance practices and a Principal from March 2000 until June 2003.

James F. Voelker has served as our Chairman since December 2002. He also served as Chief Executive Officer from December 2002 to February 2009, and also as President from December 2005 to February 2009. He also held the title of President from December 2002 to April 2003. He has served as a director since July 2002. Mr. Voelker served as President and a director of NEXTLINK Communications, Inc. (now XO Communications, Inc.), a broadband communications company, from its inception in 1994 through 1998.

John E. Cunningham, IV has served as a director of InfoSpace since July 1998. Mr. Cunningham has been a general partner of Clear Fir Partners, L.P., a private equity investment partnership, since February 1998. From July 2006 to June 2008, he served as a board member of Citel Technologies, Inc., a telecommunications company, and also served as its non-executive Chairman from January 2004 to July 2006. From April 1996 until February 2003, he served as President of Kellett Investment Corporation, an investment fund for private companies.

Jules Haimovitz has served as a director of InfoSpace since October 2005. Since July 2007, he has served as President of Haimovitz Consulting, a media consulting firm. From July 2002 to July 2007, Mr. Haimovitz served as Vice Chairman and Managing Partner of Dick Clark Productions Inc., a producer of programming for television, cable networks and syndicators. From June 1999 to July 2004, Mr. Haimovitz served in various capacities at Metro Goldwyn Mayer Inc., including President of MGM Networks Inc., Executive Consultant to the CEO, and Chair of the Library Task Force. Mr. Haimovitz is a director of Blockbuster, Inc.

Richard D. Hearney has served as a director of InfoSpace since September 2001. General Hearney served as President and Chief Executive Officer of Business Executives for National Security, an organization focusing on national security policy, from December 2000 to April 2002.

William J. Ruckelshaus has served as a director of InfoSpace since May 2007. Mr. Ruckelshaus has served as Chief Operating Officer of Audience Science, Inc. (formerly known as Revenue Science Inc.), an Internet advertising technology and services company, since August 2008, as well as its Chief Financial Officer since May 2006. From July 2002 to April 2006, he served as Senior Vice President Corporate Development at Expedia, Inc., an online travel agency, where he oversaw Expedia’s mergers and acquisitions and led the corporate strategic planning effort.

Lewis M. Taffer has served as a director of InfoSpace since June 2001. Since March 2006, Mr. Taffer has served as an Operating Advisor at Pegasus Capital Advisors, a private equity fund manager. Since May 2006, he has also served as a director and Senior Vice President at iGPS Company LLC, a provider of RFID (radio frequency identification)-tagged plastic pallet rental systems and an affiliate of Pegasus Capital Advisors. Since January 2005, he has been an independent management consultant. From January 2004 to January 2005,

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Mr. Taffer served as Executive Vice President, Acquisition Marketing of America Online, Inc. From May 2001 through December 2003, Mr. Taffer was an independent consultant specializing in marketing, business development and strategic partnerships.

George M. Tronsrue, III has served as a director of InfoSpace since February 2003. Since March 2004, Mr. Tronsrue has served as President and Co-Manager of Jericho Fund, LLC, an investment and consulting company. From January 2000 to March 2004, Mr. Tronsrue served as Chairman and Chief Executive Officer of Monet Mobile Networks Inc., a wireless Internet service provider. Monet Mobile filed for Chapter 11 bankruptcy protection in March 2004.

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ITEM 1A. Risk Factors

RISKS RELATED TO OUR BUSINESS

Our strategic direction has recently changed and our focus on online search may not be successful.

In the fourth quarter of 2007, we completed the sale of our directory business to Idearc Inc. and the sale of our mobile services business to Motricity, Inc. This significantly reduced the size of our business and our revenues, and our business model now centers on our online search services. There can be no assurance that our focus on online search will produce acceptable results. If we are not successful in operating under this new business model, our stock price will suffer. Moreover, any other future changes to our business may not prove successful in the short or long term due to a variety of factors, including competition, consumer adoption and demand for our products and services, and other factors described in this section, and may have a material negative impact on our financial results.

In addition, we have in the past and may in the future find it advisable to streamline operations and reduce expenses, including, without limitation, such measures as reductions in our workforce, discretionary spending, and/or capital expenditures, as well as other steps to reduce expenses. We have streamlined operations and reduced expenses, including reductions in our workforce, as a result of the sale of our directory and mobile services businesses. Effecting any restructuring or streamlining places significant strains on management, our employees, and our operational, financial, and other resources. In addition, such actions could impair our development, marketing, sales and customer support efforts or alter our product development plans. We may also incur liability from early termination or assignment of contracts, potential failure to meet required support levels of our platforms due to loss of employees who maintain such platforms, potential litigation and other effects from such restructuring and streamlining. Such effects from restructuring and streamlining could have a negative impact on our financial results.

A substantial portion of our revenues is attributable to a small number of customers, the loss of any one of which would harm our financial results.

We acquire rights to content from numerous third-party content providers, whom we refer to as customers, and our future success is highly dependent upon our ability to maintain relationships with these customers and enter into new relationships with other customers. We derive a substantial portion of our revenues from continuing online search operations from a small number of customers. We expect that concentration will continue in the foreseeable future. Google and Yahoo! jointly accounted for 95% or more of our online search revenues in 2008, 2007 and 2006 and each accounted for more than 10% of our revenues in the same periods. Our principal agreements with these customers expire in 2011. Also, our customers are competitors of each other, and the way we do business with one of them may not be acceptable to one or some of their competitors with whom we also do business, which may result in such competitors not renewing their agreements with us on favorable terms. If any of our top customers significantly reduces or eliminates the content it provides to us under our existing contracts, or we are unable to renew the contracts on favorable terms, or any of these customers is unwilling to pay us amounts that it owes us, or disputes amounts it owes us or has paid to us, our financial results would materially suffer.

Failure by us or our search distribution partners to comply with the requirements and guidelines imposed by our customers relating to the use or distribution of content may require us to modify, terminate or not enter into certain distribution relationships, may cause the customer to terminate its agreement with us, and may expose us to liability.

If our search distribution partners or we fail to meet the requirements and guidelines promulgated by our customers, we may not be able to continue to use such customers’ content or provide the content to such distribution partners, we may be liable to such customers for certain damages they may suffer, and such

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customers may terminate their agreements with us. Such requirements and guidelines relate to various matters regarding the use and distribution of the customers’ content, and our customers have modified their requirements and guidelines from time to time, and may do so in the future. Such modifications may restrict or limit our ability to provide content through our Web sites or the Web properties of our distribution partners affected by such modifications, which may have a material and adverse effect on our financial results. In the past, certain of our customers had notified us that we were not in compliance with respect to our use of their content or the redistribution of their content by our distribution partners. We have been able to cure such breaches, however, there can be no assurance that if we breach our agreements in the future we will be able to cure the breach. Our agreements with some of our major customers, including Google and Yahoo!, give such customers the ability to terminate their agreements with us immediately in the case of breaches of certain provisions of the agreements with such customers, regardless of whether such breaches could be cured.

Additionally, agreements with our customers may be amended from time to time by both parties or may be subject to different interpretation by either party, which may require our use or the rights we grant to our search distribution partners to be modified to comply with such amendments or interpretations. The agreements with our distribution partners generally provide that we may modify the rights we grant to them to avoid being in conflict with the agreements with our customers. Also, some of our customers have approval processes with respect to the redistribution of their content by our distribution partners. Some of our distribution partners that redistribute such content have not complied with such approval processes, and we no longer provide the applicable content to such partners or such partners no longer redistribute the content. If our customers impose additional restrictions, some of our distribution partners may be required to change the manner in which such customer’s content is used or distributed or cease using or distributing such customer’s content. If some of our distribution partners are unable to meet the restrictions, we may need to terminate our agreement with such distribution partners or no longer provide the applicable content to such partners.

The loss or reduction of content that we can use or make available to our distribution partners, as well as the termination of distribution or customer agreements, as described above, could have a material adverse effect on our financial results.

A substantial portion of our revenues is dependent on our relationships with a small number of distribution partners who distribute our online search services, the loss of which could have a material adverse effect on our financial results.

We rely on our relationships with online search distribution partners, including internet service providers, Web portals and software application providers, for distribution of our online search services. During 2008, we generated approximately 31% of our online search revenues through relationships with our top ten distribution partners. We cannot assure you that these relationships will continue or will result in benefits to us that outweigh the cost of the relationships. One of our challenges is providing our distribution partners with relevant products and services at competitive prices in rapidly evolving markets. Distribution partners may create their own products and services or may seek to license products and services from others that we compete with or replace the products and services that we provide. Also, many of our distribution partners are developing companies with limited operating histories and evolving business models that may prove unsuccessful even if our products and services are relevant and our prices competitive. If we are not able to maintain our relationships with our distribution partners, our financial results would be materially adversely affected.

Our agreements with most of our distribution partners come up for renewal in 2009 and 2010. Such agreements may be terminated or may not be renewed or replaced on favorable terms, which could adversely impact our financial results. We anticipate that our content and distribution costs for our revenue sharing arrangements with our distribution partners will increase as revenues grow and may increase as a percentage of revenues to the extent that there are changes to existing arrangements or we enter into new arrangements on less

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favorable terms. In addition, competition continues for quality consumer traffic in the online search market. Recently, we have experienced increased competition from our content providers, whom we refer to as customers, seeking to enter into agreements directly with our existing or potential distribution partners, making it increasingly difficult for us to renew agreements with existing major distribution partners or to enter into distribution agreements with new partners on favorable terms. Any difficulties that we experience with maintaining or strengthening our business relationships with our major distribution partners could have an adverse effect on our financial results.

Current economic downturn may put downward pressure on online advertising spending, which could have a material adverse effect on our financial results.

The current economic downturn may lead to lower online advertising spending by advertisers who advertise through our customers, resulting in lower fees paid to us by such customers for paid search originating from our Web sites or the Web properties of our distribution partners. A significant reduction in such spending could have a material adverse effect on our operating results.

If advertisers perceive that they are not receiving quality traffic to their sites through their paid-per-click advertisements, they may reduce or eliminate their advertising through the Internet. Further, if our customers perceive that they are not receiving quality traffic from our owned Web sites or the Web property of a distribution partner to their advertiser networks, they may reduce the fees they pay to us. Either of these factors could have a negative material impact on our financial results.

Most of our revenues from our online search business are based on the number of paid clicks on commercial search results served on our own Web sites or our distribution partners’ Web properties. Generally, each time a user clicks on a commercial search result, the customer that provided the commercial search result receives a fee from the advertiser who paid for such commercial click and the customer pays us a portion of that fee. If the click originated from one of our distribution partners’ Web properties, we share a portion of the fee we receive with such partner. If an advertiser receives what it perceives to be a large percentage of clicks for which it needs to pay, but that do not result in the intended objectives of such advertiser, the advertiser may reduce or eliminate its advertisements through the customer that provided the commercial search result to us because of such poor quality traffic. This leads to a loss of revenue to our customers and consequently to fewer fees paid to us. Also, if a customer perceives that the traffic originating from one of our owned Web sites or the Web property of a distribution partner is of poor quality, including, for example, traffic that may be generated through our marketing initiatives or those of our distribution partners, the customer may discount the amount it charged all the advertisers whose paid click advertisements appeared on such Web site or Web property based on the amount of poor quality traffic the customer deems to have been generated, and accordingly may reduce the amount of fees it would have otherwise paid us for all paid clicks originating from such Web site or Web property. The customer may also suspend or terminate our ability to provide its content through such Web sites or Web properties if such activities are not modified to satisfy the customer’s concerns. The payment of fewer fees to us or the inability to provide content through such Web sites or Web properties could have a material negative effect on our financial results.

If we fail to detect invalid click activity, we could lose the confidence of advertisers and of our customers, which could cause our business to suffer.

Poor quality traffic may be a result of invalid click activity. Such invalid click activity occurs, for example, when a person or automated click generation program clicks on a commercial search result to generate fees for the Web property displaying the commercial search result rather than to view the Web page underlying the commercial search result or when a competitor of the advertiser clicks on the advertiser’s search result to increase the advertising expense of the advertiser. Some of this invalid click activity is sometimes referred to as “click fraud.” When such invalid click activity is detected, our customers may refund the fee paid by the advertiser for such invalid clicks. When such invalid click activity is detected as coming from one of our

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distribution partners’ Web properties or our own Web sites, our customers may refund the fees paid by the advertisers for such invalid clicks, which in turn reduces the amount of fees the customer pays us. If we or our customers are unable to effectively detect and stop invalid click activity, advertisers may see a reduced return on their advertising investment with the customer because such invalid clicks do not generate quality traffic to such advertisers, which could lead such advertisers to reduce or terminate their investment in such ads. This could also lead to a loss of advertisers and revenue to our customers and consequently to less fees paid to us. Also, as discussed above, the customer may discount the amount it charged all the advertisers whose paid-click advertisements appeared on such Web site or Web property based on the amount of poor quality traffic, including invalid click activity, and accordingly reduce the amount of fees it would have otherwise paid us for all paid-clicks originating from such Web site or Web property. Additionally, if we are unable to detect and stop invalid click activity that may originate from our own Web sites or the Web properties of our distribution partners, our customers may impose restrictions on our ability to provide their commercial search results on our own Web sites or to our current and future distribution partners, which could have a material negative impact on our financial results.

Although we and our customers have in place certain systems to assist with the detection of invalid clicks, these systems may not detect all such invalid click activity, including new types of invalid click activity that may appear. From time to time, some of our customers may notify us that poor quality traffic may be originating from one of our distribution partners. Although the poor quality traffic may be due to factors other than invalid click activity, if we are unable to resolve or determine what factor may be creating the poor quality traffic, we may terminate our agreement with such distribution partner or stop providing content to such distribution partner from the customer that notified us of such traffic in an attempt to maintain the confidence of our customer and their advertisers in the overall quality of our traffic.

If our former mobile content providers disagree with our estimate of our royalty liability due to them, it could expose us to significant liability and adversely impact our financial results.

Under our agreements with our former mobile content providers, we calculated our royalty liability based on inputs from various sources of data and have been and continue to be subject to audits by our former mobile content providers. If our former mobile content providers disagree with the royalty amounts we calculated were due to them and we are unable to resolve those disagreements amicably, it may subject us to potential litigation and substantial costs even if it is found that the amounts we determined were due to them were accurate. If a former mobile content provider prevails in showing that the royalty amount due to it was not what was intended under our agreement with them and our estimate of the royalty liability was significantly different, it could subject us to significant liability to the affected mobile content provider and have an adverse effect on our financial results. Two former mobile content providers initiated law suits against us due to such type of disagreements and although we have been able to settle with one such mobile content provider, we continue to be engaged in litigation with the other. There can be no assurance that other former mobile content providers will not also disagree with the royalty amount due to them and initiate their own litigation, and any adverse outcomes in disputes with former mobile content providers could have a material adverse effect on our financial results.

If there is change in the ownership of the Company within the meaning of Section 382 of the Internal Revenue Code, our ability to utilize our net operating loss carryforwards may be severely limited or potentially eliminated; even if such change did not occur, we may not be able to utilize the full amount of our net loss carryforwards before they expire.

As of December 31, 2008, we had federal net operating loss (“NOL”) carryforwards of approximately $800 million that will expire over a twelve to twenty year period. However, if the Company were to have a change of ownership within the meaning of Section 382 of the Internal Revenue Code, under certain conditions, its annual federal NOL utilization could be limited to an amount equal to its market capitalization, net of substantial non-business assets, at the time of the ownership change multiplied by the federal long-term tax exempt rate. A change of ownership under Section 382 of the Internal Revenue Code is defined as a cumulative change of

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50 percentage points or more in the ownership positions of certain stockholders owning 5% or more of the Company’s common stock over a three year rolling period. There can be no assurance that such change will not occur. If the use of this tax benefit is severely limited or eliminated by a change of ownership, or if we are unable to use it before it expires, there could be a material reduction in the amount of after-tax income and cash flow from operations, and it could have an effect on the ability of the Company to engage in certain transactions.

We have in the past identified a material weakness in our internal controls over financial reporting that we have been able to remediate; however, there can be no assurance that in the future we will not have a material weakness that could result in material misstatements in our financial statements in future periods and could also result in a loss of investor confidence.

Under Section 404 of the Sarbanes-Oxley Act of 2002, our management is required to evaluate and determine the effectiveness of our internal control over financial reporting, and our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting in connection with the filing of our Annual Report on Form 10-K for each fiscal year. While our management’s assessment of our internal control over financial reporting resulted in our conclusion that as of December 31, 2008, our internal control over financial reporting was effective, we cannot predict the outcome of our testing in future periods. If we conclude in future periods that our internal control over financial reporting is not effective or if our independent registered public accounting firm is unable to provide an unqualified opinion as of future year-ends, investors may lose confidence in our financial statements and the price of our stock may suffer. In 2006, as part of its evaluation of our internal control over financial reporting, our management determined that we had a material weakness in our internal control over financial reporting pertaining to our deferred income tax benefit and related income tax asset, which we believe has since been remediated. As defined in Public Company Accounting Oversight Board Auditing Standard No. 5, a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. We strive to maintain effective internal controls over financial reporting in order to prevent and detect material misstatements in our annual and quarterly financial statements and prevent fraud. However, we cannot assure you that such efforts will be effective. If we fail to maintain effective internal controls in future periods, our financial results and stock price could be adversely affected.

We have a history of incurring net losses, we may incur net losses in the future, and we may not be able to regain or sustain profitability on a quarterly or annual basis.

We have incurred net losses on an annual basis for all but three of the years since our inception. As of December 31, 2008, we had an accumulated deficit of $1.0 billion. We may incur net losses in the future, including from our operations, loss on investments, the impairment of goodwill or other intangible assets, losses from acquisitions, restructuring charges or expense related to stock-based compensation and other equity awards. There can be no assurance that we will be able to conduct our business profitably in the future.

Our financial results are likely to continue to fluctuate, which could cause our stock price to be volatile or decline.

Our financial results have varied on a quarterly basis and are likely to continue to fluctuate in the future. These fluctuations could cause our stock price to be volatile or decline. Several factors could cause our quarterly results to fluctuate materially, including:

• the loss of key customers or the effects of changes to their requirements or guidelines or their measurement of the quality of traffic we send to their advertiser network;

• the loss, termination or reduction in scope of key distribution relationships, such as by distribution partners licensing content directly from content providers;

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• increased costs related to investments for new initiatives, including new products and services, marketing and new distribution channels;

• our ability to attract and retain quality traffic;

• the economic downturn that may lead to lower online advertising spend by advertisers, resulting in lower monetization rates for paid search;

• cash distributions to our shareholders or stock repurchases;

• additional restructuring charges we may incur in the future;

• litigation expense, including settlement;

• variable demand for our products and services, including seasonal fluctuations, rapidly evolving technologies and markets and consumer preferences;

• the impact on revenues or profitability of changes in pricing for our products and services;

• the results from shifts in the mix of products and services we provide;

• the effects of acquisitions by us, our customers or our distribution partners;

• increases in the costs or availability of content for our products and services;

• the requirement to expense the fair value of our employee stock options and other equity awards;

• the adoption of new laws, rules or regulations, or new court rulings, regarding intellectual property that may adversely affect our ability to continue to acquire content and distribute our products and services, or the ability of our customers or distribution partners to continue to provide us with their content or distribute our products and services or increase our potential liability;

• volatility in the financial markets, and potential changes to the fair value of our long-term investments, such as auction rate securities;

• impairment in the value of long-lived assets or the value of acquired assets, including goodwill, core technology and acquired contracts and relationships;

• the effect of changes in accounting principles or in our accounting treatment of revenues or expenses;

• the adoption of new regulations or accounting standards; and

• the foreign currency effects from transactions denominated in currencies other than the U.S. dollar.

For these reasons, among others, you should not rely on period-to-period comparisons of our financial results to forecast our future performance. Furthermore, our fluctuating operating results may fall below the expectations of securities analysts or investors, which could cause the trading price of our stock to decline.

Certain of our long-term investments have failed to trade at auctions, which resulted in an impairment charge to a portion of such investments.

We do not issue or invest in financial instruments or their derivatives for trading or speculative purposes. Included within our investment portfolio are auction rate securities (“ARS”) and preferred shares into which some of the ARS have converted. We purchased the ARS, including those that have converted into preferred stock, for $40.4 million. The ARS have failed to trade at auctions due to insufficient bids from buyers, and some of those ARS have been converted to preferred stock issued by the ARS issuer. While we now earn a premium interest rate on some of those ARS that failed to settle in the auction process or receive dividends on the preferred stock issued by the issuers of some of the ARS, those investments cannot be quickly converted into cash and were considered illiquid as of December 31, 2008. We determined that the fair value of the ARS was $13.6 million and the fair value of the preferred stock was $365,000 at December 31, 2008, and we recorded

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other-than-temporary impairment charges to those investments of an aggregate $24.3 million and $2.2 million in 2008 and 2007, respectively. If the issuers of such investments are unable to successfully close future auctions or their credit ratings deteriorate, the fair value of those investments may continue to decline and we may record further impairment charges. Additionally, if such issuers default with respect to such securities, we may no longer continue to receive any interest or dividends and may have to further impair such investments. If we are unable to liquidate these investments when we need such liquidity for business purposes, we may need to change or postpone our business plans or find alternative financing for such business plans, if available.

Our stock price has been and is likely to continue to be highly volatile.

The trading price of our common stock has been highly volatile. Since our common stock began trading on December 15, 1998, our stock price has ranged from $3.70 to $1,385.00 (as adjusted for stock splits). On February 23, 2009, the closing price of our common stock was $5.34. Our stock price could decline or be subject to wide fluctuations in response to factors such as the other risks discussed in this section and the following, among others:

• actual or anticipated variations in quarterly and annual results of operations;

• announcements of significant acquisitions, dispositions, charges, changes in or loss of material contracts, new customer or partner relationships or other business developments by us, our customers, distribution partners or competitors;

• conditions or trends in the online search services markets;

• announcements of technological innovations or new products or services by us or our competitors;

• changes in financial estimates or recommendations by securities analysts;

• disclosures of any material weaknesses in internal control over financial reporting;

• the adoption of new regulations or accounting standards; and

• announcements or publicity relating to litigation and similar matters.

In addition, the stock market in general, and the NASDAQ Global Select Market and the market for Internet and technology company securities in particular, have experienced extreme price and volume fluctuations. These broad market and industry factors and general economic conditions may materially and adversely affect our stock price. Our stock has been subject to such price and volume fluctuations in the recent past. Often, class action litigation has been instituted against companies after periods of volatility in the overall market and in the price of such companies’ stock. If such litigation were to be instituted against us, even if we were to prevail, it could result in substantial cost and diversion of management’s attention and resources.

We operate in new and rapidly evolving markets, and our business model continues to evolve, which makes it difficult to evaluate our future prospects.

Our potential for future profitability must be considered in the light of the risks, uncertainties, and difficulties encountered by companies that are in new and rapidly evolving markets and continuing to innovate with new and unproven technologies or services, as well as undergoing significant change. Our online search services are in young industries that have undergone rapid and dramatic changes in their short history. We have also recently completed the sale of our directory and mobile services businesses. In addition to the other risks we describe in this section, some of these risks relate to our potential inability to:

• execute our business strategy based on our new business model;

• attract users to our owned and operated sites and retain them;

• attract and retain distribution partners for our online search services;

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• attract and retain customers;

• manage our growth, control expenditures and align costs with revenues;

• effectively utilize our resources and assets, such as our technology, personnel and cash, to drive growth;

• respond quickly and appropriately to competitive developments, including:

• rapid technological change;

• consolidation of customers or their advertising networks;

• alternatives to access the Internet;

• changes in customer requirements;

• new products introduced into our markets by our competitors; and

• regulatory changes affecting the industries we operate in or the markets we serve both in the United States and foreign countries; and

• expand our customer base in markets in which we operate and into other markets.

If we do not effectively address the risks we face, we may not be able to achieve profitability.

If we are unable to hire, retain and motivate highly qualified employees, including our key employees, we may not be able to successfully manage our business.

Our future success depends on our ability to identify, attract, hire, retain and motivate highly skilled technical, managerial, sales and marketing, and corporate development personnel. Qualified personnel with experience relevant to our online search business are scarce and competition to recruit them is intense. If we fail to successfully hire and retain a sufficient number of highly qualified employees, we may have difficulties in supporting our customers or expanding our business. Realignments of resources, reductions in workforce, or other operational decisions have created and could continue to create an unstable work environment and may have a negative effect on our ability to hire, retain and motivate employees.

Our business and operations are substantially dependent on the performance of our key employees, all of whom are employed on an at-will basis. We have recently experienced significant changes at our executive management level, including the appointment on February 2, 2009 of William J. Lansing as President and Chief Executive Officer, succeeding James F. Voelker, and the appointment of the other executive officers in 2008, and we may experience more changes in the future. We cannot assure you that changes of management will not cause disruption to our operations, which may materially and adversely affect our financial results. In addition, if we lose the services of one or more key employees and are unable to recruit and retain a suitable successor(s), we may not be able to successfully manage our business or achieve our business objectives. There can be no assurance that any retention program we initiate will be successful at retaining employees, including key employees.

In light of current market conditions, the value of stock options or restricted stock units granted to employees may cease to provide sufficient incentive to our employees.

Like many technology companies, we use stock options, restricted stock units and other equity-based awards to recruit technology professionals and senior level employees. We have instituted a restricted stock unit program in lieu of issuing stock options to employees, other than executives and selected employees, because stock options are not currently seen as providing enough incentive to attract or retain employees. Additionally, due to the reduction in our stock price as a result of our recent dividends, most outstanding options held by employees have an exercise price significantly higher than the current market price of our stock. With respect to

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those employees to whom we also issue options, we face a significant challenge in retaining them if the value of these stock options is either not substantial enough or so substantial that the employee leaves after their stock options have vested. If our stock price does not increase significantly above the prices of our options, or option programs become impracticable, we may need to issue new options or other equity incentives or increase other forms of compensation to motivate and retain our executives. We may undertake or seek stockholder approval to undertake other equity-based programs to retain our employees, which may be viewed as dilutive to our stockholders or may increase our compensation costs. Additionally, there can be no assurance that any such programs we undertake, including the restricted stock unit awards, will be successful in motivating and retaining our employees.

Our online search services may expose us to claims relating to how the content was obtained, distributed or displayed.

Our online search services link users, either directly through our owned Web sites or indirectly through the Web properties of our distribution partners, to third party Web pages and content in response to search queries and other requests. These services could expose us to legal liability from claims relating to such third-party content and sites, the manner in which these services are distributed and displayed by us or our distribution partners, or how the content provided by our customers was obtained or provided by our customers. Such claims could include the following: infringement of copyright, trademark, trade secret or other proprietary rights; violation of privacy and publicity rights; unfair competition; defamation; providing false or misleading information; obscenity; pornography; and illegal gambling. Regardless of the legal merits of any such claims, they could result in costly litigation, be time consuming to defend and divert management’s attention and resources. If there were a determination that we had violated third-party rights or applicable law, we could incur substantial monetary liability, be required to enter into costly royalty or licensing arrangements (if available), or be required to change our business practices. We may also have obligations to indemnify and hold harmless certain of our customers or distribution partners for damages they suffer for such violations under our contracts with them. Implementing measures to reduce our exposure to such claims could require us to expend substantial resources and limit the attractiveness of our products and services. As a result, these claims could result in material harm to our business.

In the past, there have been legal actions brought or threatened against distributors of downloadable applications deemed to be “adware” or “spyware.” Additionally, certain bills are pending and some laws have been passed in certain jurisdictions setting forth requirements that must be met before a downloadable application is downloaded to an end user’s computer. We provide downloadable applications to promote use of our search services for our owned search services. Such applications may be considered adware. We also partner with some distribution partners that provide adware to their users if the partners adhere to our strict guidelines requiring them, among other things, to disclose to the user what the adware does and to obtain the consent of the user before the application is downloaded. The adware must also be easy to uninstall. We also review the application the partner proposes to use before we distribute our results to them. We also have the right to audit our partners, and if we find that they are not following our guidelines, we can terminate our agreement with them or cease providing content to that downloadable application. Some partners have not been able to meet the new guidelines imposed by us or some of our customers, and we no longer provide the applicable content or any content, as the case may be, to such partners or certain of their downloadable applications. We work closely with some of our major customers to try to identify potential distribution partners that do not meet our guidelines or are in breach of our distribution agreements and we work with our distribution partners to ensure they deliver quality traffic. However, there can be no assurance that the measures we implement to reduce our exposure to claims that certain ways in which the content is distributed violate legal requirements will be successful. Any claims against us as a result of violations of legal requirements or contractual obligations could result in material harm to our business.

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Our financial and operating results will suffer if we are unsuccessful in acquiring desired technologies and businesses or integrating them.

We have acquired a number of technologies and businesses in the past and may engage in further acquisitions in the future. Acquisitions may involve the use of cash, potentially dilutive issuances of stock, the potential incurrence of debt and contingent liabilities or amortization expenses related to certain intangible assets. However, there can be no assurance that any such financing, if needed, will be available with acceptable terms or at all in light of the current market and other factors. Additionally, there can be no assurance that such acquisitions will prove successful. In the past, our financial results have suffered significantly due to impairment charges of goodwill and other intangible assets related to prior acquisitions. Acquisitions also involve numerous risks which could materially and adversely affect our results of operations or stock price, including:

• difficulties in assimilating the operations, products, technology, information systems and personnel of acquired companies which result in unanticipated costs, delays or allocation of resources;

• difficulties in acquiring foreign companies, including risks related to integrating operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries;

• the dilutive effect on earnings per share as a result of incurring operating losses and the amortization of acquired intangible assets for the acquired business;

• diverting management’s attention from other business concerns;

• impairing relationships with our customers or those of the acquired companies, or breaching significant or material contracts due to the consummation of the acquisition;

• impairing relationships with our employees or those of the acquired companies;

• failing to achieve the anticipated benefits of the acquisitions in a timely manner or at all; and

• adverse outcome of litigation matters assumed in or arising out of the acquisitions.

The success of the operations of companies that we have acquired will often depend on the continued efforts of the management and key employees of those acquired companies. Accordingly, we have typically attempted to retain key employees and members of existing management of acquired companies under the overall supervision of our senior management. However, we have not always been successful in these attempts at retention. Failure to retain key employees of an acquired company may make it more difficult to integrate or manage the business of the acquired company, may reduce the anticipated benefits of the acquisition by increasing costs, causing delays, or otherwise and may expose us to additional competition from companies these employees may join or form.

Our presence in markets outside the United States may be unsuccessful and could result in losses.

We currently provide online search offerings in Europe. We have limited experience in marketing and operating our products and services in international markets, and we may not be able to successfully execute our business model in these markets. Our success in these markets will be directly linked to the success of relationships with our distribution and content partner customers and other third parties.

As the international markets in which we operate continue to grow, competition in these markets will intensify. Local companies may have a substantial competitive advantage because of their greater understanding of and focus on the local markets. Some of our domestic competitors who have substantially greater resources than we do may be able to more quickly and comprehensively develop and grow in the international markets. Our international presence may also require significant financial investment including, among other things, the expense of developing localized products, the costs of maintaining foreign companies and expenditure of resources in developing distribution and content relationships and the increased costs of supporting remote operations.

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Other risks of doing business in international markets include the increased risks and burdens of complying with different legal and regulatory standards, difficulties in managing and staffing foreign operations, limitations on the repatriation of funds and fluctuations of foreign exchange rates, varying levels of Internet technology adoption and infrastructure, and ability to enforce our contracts in foreign jurisdictions. In addition, our success internationally could be limited by barriers to such markets, such as tariffs, adverse tax consequences, and technology export controls. If we cannot manage these risks effectively, the costs of doing business in some international markets may be prohibitive or our costs may increase disproportionately to our revenues.

Our systems could fail or become unavailable, which could harm our reputation, result in a loss of current and potential customers and cause us to breach agreements with our partners.

In the fourth quarter of 2008, we completed the transition of data center services from a third party provider and we now provide our own data center services from two locations. Although the two data centers provide some redundancy, not all of our systems and operations have backup redundancy. Such systems and operations could be damaged or interrupted by fire, flood, power loss, telecommunications failure, Internet breakdown, break-in, earthquake or similar events. We could face significant damage as a result of these events, and our business interruption insurance may not be adequate to compensate us for all the losses that may occur. We may also be exposed to liability from those third parties to whom we provide products and services through our data centers as a result of such events. In addition, such systems use sophisticated software that may contain bugs that could interrupt service. For these reasons, we may be unable to develop or successfully manage the infrastructure necessary to meet current or future demands for reliability and scalability of our systems, which could have a material adverse effect on our operations or financial results.

If the volume of traffic to our products and services, which runs through our data centers, increases substantially, we must respond in a timely fashion by expanding our systems, which may entail upgrading our technology and network infrastructure. Our ability to support our expansion and upgrade requirements may be constrained due to our business demands. Due to the number of our customers and the products and services that we offer, we could experience periodic capacity constraints which may cause temporary unanticipated system disruptions, slower response times, lower levels of customer service, and limit our ability to develop and release new or enhanced products and services. Our business could be harmed if we are unable to accurately project the rate or timing of increases, if any, in the use of our products and application services or we fail to expand and upgrade our systems and infrastructure to accommodate these increases in a timely manner.

The security measures we have implemented to secure information we collect and store may be breached, which could cause us to breach agreements with our customers and distribution partners and expose us to potential investigation and penalties by authorities and potential claims by persons whose information was disclosed.

We take reasonable steps to protect the security, integrity and confidentiality of the information we collect and store but there is no guarantee that inadvertent or unauthorized disclosure will not occur or that third parties will not gain unauthorized access despite our efforts. If such unauthorized disclosure or access does occur, we may be required under existing and proposed laws to notify persons whose information was disclosed or accessed. We also may be subject to claims of breach of contract for such disclosure, investigation and penalties by regulatory authorities and potential claims by persons whose information was disclosed.

We may be subject to liability for our use or distribution of information that we gather or receive from third parties and indemnity protections or insurance coverage may be inadequate to cover such liability.

We obtain content and commerce information from third parties. When we distribute this information, we may be liable for the data that is contained in that content. This could subject us to legal liability for such things as defamation, negligence, intellectual property infringement, violation of privacy or publicity rights and product or service liability, among others. Laws or regulations of certain jurisdictions may also deem some content

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illegal, which may expose us to legal liability as well. We also gather personal information from users in order to provide personalized services. Gathering and processing this personal information may subject us to legal liability for, among other things, negligence, defamation, invasion of privacy or product or service liability. We are also subject to laws and regulations, both in the United States and abroad, regarding the collection and use of end user information and search related data. If we do not comply with these laws and regulations, we may be exposed to legal liability.

Although the agreements by which we obtain content contain indemnity provisions, these provisions may not cover a particular claim or type of claim or the party giving the indemnity may not have the financial resources to cover the claim. Our insurance coverage may be inadequate to cover fully the amounts or types of claims that might be made against us. Any liability that we incur as a result of content we receive from third parties could harm our financial results.

If others claim that our products infringe their intellectual property rights, we may be forced to seek expensive licenses, reengineer our products, engage in expensive and time-consuming litigation or stop marketing and licensing our products.

Third parties have in the past and may in the future make claims against us alleging infringement of copyrights, trademark rights, trade secret rights or other proprietary rights, or alleging unfair competition or violations of privacy or publicity rights. In some cases, the ownership or scope of an entity’s or person’s rights is unclear and may also change over time, including through changes in U.S. or international intellectual property laws or regulations or through court decisions or decisions by agencies or regulatory boards that manage such rights.

We attempt to avoid infringing known proprietary rights of third parties in our product development, marketing, and licensing efforts. However, we do not regularly conduct patent searches to determine whether the technology used in our products infringes patents held by third parties. Patent searches generally return only a fraction of the issued patents that may be deemed relevant to a particular product or service. It is therefore nearly impossible to determine, with any level of certainty, whether a particular product or service may be construed as infringing a U.S. or foreign patent. Because patent applications in the United States are not publicly disclosed until the patent is issued, applications may have been filed by third parties that relate to our products. In addition, other companies, as well as research and academic institutions, have conducted research for many years in the search technology field, and this research could lead to the filing of further patent applications.

If we were to discover that our products violated or potentially violated third-party proprietary rights, including those third-party proprietary rights that came about due to decisions and other changes regarding a person’s or entity’s proprietary rights discussed above, we might be required to obtain licenses that are costly or contain terms unfavorable to us, or expend substantial resources to reengineer those products so that they would not violate such third party rights. Any reengineering effort may not be successful, and we cannot be certain that any such licenses would be available on commercially reasonable terms. Any third-party infringement claims against us could result in costly litigation or liability and be time consuming to defend, divert management’s attention and resources, cause product and service delays or require us to enter into royalty and licensing agreements.

We rely heavily on our technology and intellectual property, but we may be unable to adequately or cost-effectively protect or enforce our intellectual property rights, thus weakening our competitive position and negatively impacting our financial results.

To protect our rights in our products, services, and technology, we rely on a combination of copyright and trademark laws, patents, trade secrets, and confidentiality agreements with employees and third parties and protective contractual provisions. We also rely on the law pertaining to trademarks and domain names to protect the value of our corporate brands and reputation. Despite our efforts to protect our proprietary rights,

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unauthorized parties may copy aspects of our products, services or technology, or obtain and use information, marks or technology that we regard as proprietary, or otherwise violate or infringe our intellectual property rights. In addition, it is possible that others could independently develop substantially equivalent intellectual property. If we do not effectively protect our intellectual property, or if others independently develop substantially equivalent intellectual property, we could lose our competitive position.

Effectively policing the unauthorized use of our products, services, and technology is time-consuming and costly, and there can be no assurance that the steps taken by us will prevent misappropriation of our technology or other proprietary assets. Our intellectual property may be subject to even greater risk in foreign jurisdictions, as protection is not sought or obtained in every country in which our products, services, and technology are available. Also, the laws of many countries do not protect proprietary rights to the same extent as the laws of the United States and intellectual property developed for us by our employees or contractors in foreign jurisdictions may not be as protected as if created in the United States and it is often more difficult and costly to enforce our rights in foreign jurisdictions. If we cannot adequately protect our intellectual property, our competitive position may suffer.

We have implemented anti-takeover provisions that could make it more difficult to acquire us.

Our certificate of incorporation, bylaws, and Delaware law contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors, even if the transaction would be beneficial to our stockholders. Provisions of our charter documents which could have an anti-takeover effect include:

• the classification of our board of directors into three groups so that directors serve staggered three-year terms, which may make it difficult for a potential acquirer to gain control of our board of directors;

• the ability to authorize the issuance of shares of undesignated preferred stock without a vote of stockholders;

• a prohibition on stockholder action by written consent; and

• limitations on stockholders’ ability to call special stockholder meetings.

On July 19, 2002, our board of directors adopted a stockholder rights plan, pursuant to which we declared and paid a dividend of one right for each share of common stock held by stockholders of record as of August 9, 2002. Unless redeemed by us prior to the time the rights are exercised, upon the occurrence of certain events, the rights will entitle the holders to receive shares of our preferred stock, or shares of an acquiring entity. The issuance of the rights would make the acquisition of InfoSpace more expensive to the acquirer and could delay or discourage third parties from acquiring InfoSpace without the approval of our board of directors.

RISKS RELATED TO THE INDUSTRIES IN WHICH WE OPERATE

Intense competition in the online search markets could prevent us from increasing distribution of our services in those markets or cause us to lose market share.

Our current business model depends on distribution of our products and services into the online search markets, which are extremely competitive and rapidly changing. Many of our competitors or potential competitors have substantially greater financial, technical and marketing resources, larger customer bases, longer operating histories, more developed infrastructures, greater name recognition or more established relationships in the industry than we have. Our competitors may be able to adopt more aggressive pricing policies, develop and expand their product and service offerings more rapidly, adapt to new or emerging technologies and changes in customer and distribution partner requirements more quickly, take advantage of acquisitions and other opportunities more readily, achieve greater economies of scale, and devote greater resources to the marketing and sale of their products and services than we can. Some of the companies we compete with are currently customers

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of ours, the loss of any of which could harm our business. Because of these competitive factors and due to our relatively small size and financial resources, we may be unable to compete successfully.

Additionally, our financial results could be adversely affected as well if our distribution partners create their own products and services that compete or replace the products and services we provide or they acquire such products and services from other sources. We continue to experience increased competition from customers seeking to enter into agreements directly with our existing or potential distribution partners, making it increasingly difficult for us to renew agreements with existing major distribution partners or to enter into distribution agreements with new partners on favorable terms.

Consolidation in the industries in which we operate could lead to increased competition and loss of customers.

The Internet industry (including online search) has experienced substantial consolidation. This consolidation may continue. These acquisitions could adversely affect our business and results of operations in a number of ways, including the following:

• customers could acquire or be acquired by one of our other customers, or enter into new business relationships with each other, and stop licensing content to us or gain additional negotiating leverage in their relationships with us;

• our distribution partners could acquire or be acquired by one of our competitors and terminate their relationship with us;

• our distribution partners could merge with each other, which could reduce our ability to negotiate favorable terms; and

• competitors could improve their competitive positions through strategic acquisitions or new business relationships with each other.

Consolidation in the Internet industry could have a material and adverse effect on our business and results of operations.

Security breaches may pose risks to the uninterrupted operation of our systems.

Our networks or those from third parties that we utilize may be vulnerable to unauthorized access by hackers or others, computer viruses and other disruptive problems. Someone who is able to circumvent security measures could misappropriate our proprietary information or cause interruptions in our operations. Subscribers to some of our services are required to provide information in order to utilize the service that may be considered to be personally identifiable or private information. Unauthorized access to, and abuse of, this information could subject us to a risk of loss or litigation and liability.

We may need to expend significant capital or other resources protecting against the threat of security breaches or alleviating problems caused by breaches. Although we intend to continue to implement and improve our security measures, persons may be able to circumvent the measures that we implement in the future. Eliminating computer viruses and alleviating other security problems may require interruptions, delays or cessation of service to users accessing our services, any of which could harm our business.

Governmental regulation and the application of existing laws may slow business growth, increase our costs of doing business and create potential liability.

The growth and development of the Internet has led to new laws and regulations, as well as the application of existing laws to the Internet. Application of these laws can be unclear. The costs of complying or failure to comply with these laws and regulations could limit our ability to operate in our markets, expose us to compliance costs and substantial liability and result in costly and time-consuming litigation.

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Several federal or state laws and the laws and regulations of foreign countries could impact our business. Federal laws include those designed to restrict the online distribution of certain materials deemed harmful to children and impose additional restrictions or obligations for online services when dealing with minors. Such legislation may impose significant additional costs on our business or subject us to additional liabilities. The application to advertising in our industries of existing laws regulating or requiring licenses for certain businesses can be unclear. Such regulated businesses may include, for example, gambling; distribution of pharmaceuticals, alcohol, tobacco or firearms; or insurance, securities brokerage and legal services. Additionally, certain bills are pending and some laws have been passed in certain jurisdictions setting forth requirements that must be met before a downloadable application is downloaded to an end user’s computer. Foreign countries in which we provide our services have and may in the future enact laws and regulations governing the provision of online search services, including the collection, use, disclosure, display and retention of end user information and data as part of such services that may affect the ability to continue to provide such services in the manner currently provided.

We post our privacy policies and practices concerning the use and disclosure of user data. Any failure by us to comply with our posted privacy policies, Federal Trade Commission (“FTC”) requirements or other privacy-related laws and regulations could result in proceedings by the FTC or others, including potential class action litigation, which could potentially have an adverse effect on our business, results of operations and financial condition. In this regard, there are a large number of legislative proposals before the United States Congress and various state legislative bodies regarding privacy and data protection issues related to our business. It is not possible to predict whether or when such legislation may be adopted, and certain proposals, if adopted, could materially and adversely affect our business through a decrease in user registrations and revenues. This could be caused by, among other possible provisions, the required use of disclaimers or other requirements before users can utilize our services.

The FTC has recommended to search engine providers that paid-ranking search results be delineated from non-paid results. To the extent that the FTC may in the future issue specific requirements regarding the nature of such delineation, which would require modifications to the presentation of search results, revenue from the affected search engines could be negatively impacted.

Due to the nature of the Internet, it is possible that the governments of states and foreign countries might attempt to regulate Internet transmissions, through data protection laws amongst others, or institute proceedings for violations of their laws. We might unintentionally violate such laws, such laws may be modified and new laws may be enacted in the future. Any such developments (or developments stemming from enactment or modification of other laws) could increase the costs of regulatory compliance for us or force us to change our business practices.

We rely on the infrastructure of the Internet networks, over which we have no control and the failure of which could substantially undermine our operations.

Our success depends, in large part, on other companies maintaining the Internet system infrastructure. In particular, we rely on other companies to maintain a reliable network backbone that provides adequate speed, data capacity and security and to develop products that enable reliable Internet access and services. As the Internet continues to experience growth in the number of users, frequency of use and amount of data transmitted, the Internet system infrastructure may be unable to support the demands placed on it, and the Internet’s performance or reliability may suffer as a result of this continued growth. Some of the companies that we rely upon to maintain network infrastructure may lack sufficient capital to take the necessary steps to support such demands or their long-term operations. The failure of the internet infrastructure would substantially undermine our operations and may have a material adverse effect on our financial results.

ITEM 1B. Unresolved Staff Comments

None.

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ITEM 2. Properties

Our principal corporate office is located in Bellevue, Washington, and we have business operations in Bangalore, India. All of our facilities are leased. We believe our properties are suitable and adequate for our present and anticipated near-term needs.

ITEM 3. Legal Proceedings

See “Note 7: Commitments and Contingencies” of the Notes to Consolidated Financial Statements (Item 8, of Part II of this Report) for information regarding legal proceedings.

ITEM 4. Submission of Matters to a Vote of Security Holders

Not applicable with respect to the current reporting period.

PART II

ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market for Our Common Stock

Our common stock trades on the NASDAQ Global Select Market under the symbol “INSP.” Our common stock has traded on NASDAQ since December 15, 1998, the date of our initial public offering. Prior to that time, there was no public market for our common stock. The following table sets forth, for the periods indicated, the high and low sales prices for our common stock as reported by the NASDAQ Global Select Market.

	High		Low
Fiscal year ended December 31, 2008:
First Quarter	$	19.03	$	8.14
Second Quarter	$	12.73	$	8.33
Third Quarter	$	11.94	$	8.05
Fourth Quarter	$	10.81	$	6.35
Fiscal year ended December 31, 2007:
First Quarter	$	25.98	$	20.15
Second Quarter	$	27.76	$	18.11
Third Quarter	$	23.99	$	12.56
Fourth Quarter	$	20.75	$	16.75

On February 23, 2009, the last reported sale price for our common stock on the NASDAQ Global Select Market was $5.34 per share.

On May 15, 2007, we issued an aggregate of 1,150,761 shares of our common stock to two U.S. persons pursuant to an exercise of warrants to purchase shares of common stock held by such persons. Of these shares, 749,720 shares were issued for an aggregate sale price of $3.8 million in cash and 401,041 shares were issued pursuant to the exercise of 641,678 warrants with net exercise provisions. We issued the shares of our common stock in reliance on Section 4(2) of the Securities Act of 1933, as amended, on the basis that the offer and sale was undertaken as a private placement that did not involve a public offering.

Holders

As of February 23, 2009, there were 947 holders of record of our common stock.

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Dividends

See “Note 5: Stockholders’ Equity” of the Notes to Consolidated Financial Statements (Item 8, Part II of this Report) for information regarding dividends approved by our board of directors in fiscal years 2008, 2007 and 2006. We currently intend to retain our earnings to finance future growth and, therefore, do not anticipate paying any cash dividends on our common stock in the foreseeable future.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

See “Note 5: Stockholders’ Equity” of the Notes to Consolidated Financial Statements (Item 8, Part II of this Report) for information regarding stock repurchases by us in fiscal years 2008, 2007 and 2006.

Securities Authorized for Issuance Under Equity Compensation Plans

Please see Part III, Item 12 of this Annual Report on Form 10-K for disclosure relating to our equity compensation plans. Such information is incorporated by reference from our Proxy Statement.

Performance Graph

The information contained in the performance graph shall not be deemed to be “soliciting material” or to be “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act or Exchange Act, except to the extent that InfoSpace specifically incorporates it by reference into such filing.

Set forth below is a line graph comparing the cumulative return of our common stock to the cumulative return of (i) the NASDAQ Index and (ii) the NASDAQ Computer Index for the five-year period ending on December 31, 2008.

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ITEM 6. Selected Financial Data

The following selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements and notes thereto and other financial information included elsewhere in this report. The selected consolidated statements of operations data for the years ended December 31, 2008, 2007, 2006, 2005, and 2004 and the consolidated balance sheet data as of December 31, 2008, 2007, 2006, 2005 and 2004 are derived from our audited consolidated financial statements. In 2007, we sold our mobile and directory businesses to unaffiliated third parties, and our mobile and directory businesses have been presented as discontinued operations for all periods presented, and the remaining search business’s operating results are partly based on identifying and assigning costs to our search business that were initially shared by those three businesses. The process used to separately present continuing and discontinued operations relied on certain estimates and assumptions, and the historical results of operations presented in our selected financial data do not necessarily reflect the results of operations that would have existed had we provided our search services as a standalone business.

	Years ended December 31,
	2008 (1)			2007 (1)(2)(7)			2006 (1)			2005		2004
	(in thousands, except per share data)
Consolidated Statements of Operations Data:
Revenues	$	156,727		$	140,537		$	153,800		$	144,003	$	120,673
Operating expenses:
Content and distribution		75,969			61,765			62,346			59,897		47,616
Systems and network operations		11,537			9,800			11,494			7,592		6,204
Product development		9,931			9,921			6,814			6,640		5,677
Sales and marketing		24,261			29,259			15,935			15,809		12,206
General and administrative		24,079			105,083			34,507			27,344		24,839
Depreciation		7,335			5,542			5,044			3,334		3,462
Amortization of intangible assets		—			—			—			—		45
Restructuring (3)		17			9,590			62,316			—		222
Other, net		(1,897	)		(3,248	)		—			—		(3,203	)
Total operating expenses		151,232			227,712			198,456			120,616		97,068
Operating income (loss)		5,495			(87,175	)		(44,656	)		23,387		23,605
Gain (loss) on investments		(28,520	)		(2,117	)		—			154		425
Other income, net (4)		7,149			18,226			19,581			89,418		5,374
Income (loss) from continuing operations before income taxes and discontinued operations		(15,876	)		(71,066	)		(25,075	)		112,959		29,404
Income tax benefit (expense) (5)(7)		(598	)		(13,409	)		29,060			24,154		—
Income (loss) from continuing operations (7)		(16,474	)		(84,475	)		3,985			137,113		29,404
Discontinued operations (6) (7):
Income (loss) from discontinued operations, net of taxes		(1,455	)		(25,246	)		(19,073	)		22,255		23,875
Gain (loss) on sale of discontinued operations, net of taxes		(770	)		131,454			—			—		29,122
Net income (loss) (7)	$	(18,699	)	$	21,733		$	(15,088	)	$	159,368	$	82,401
Basic income (loss) per share (7):
Income (loss) from continuing operations	$	(0.48	)	$	(2.59	)	$	0.13		$	4.25	$	0.92
Income (loss) from discontinued operations		(0.04	)		(0.77	)		(0.61	)		0.69		0.74
Gain (loss) on sale of discontinued operations		(0.02	)		4.03			—			—		0.91
Basic net income (loss) per share	$	(0.54	)	$	0.67		$	(0.48	)	$	4.94	$	2.57
Shares used in computing basic income (loss) per share		34,415			32,640			31,254			32,284		32,109
Diluted income (loss) per share (7):
Income (loss) from continuing operations	$	(0.48	)	$	(2.59	)	$	0.12		$	3.85	$	0.80
Income (loss) from discontinued operations		(0.04	)		(0.77	)		(0.58	)		0.62		0.65
Gain (loss) on sale of discontinued operations		(0.02	)		4.03			—			—		0.81
Diluted net income (loss) per share	$	(0.54	)	$	0.67		$	(0.46	)	$	4.47	$	2.26
Shares used in computing diluted income (loss) per share		34,415			32,640			33,042			35,616		36,541

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	As of December 31,
	2008		2007 (7)		2006		2005		2004
	(in thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents, short-term and long-term investments	$	205,444	$	574,817	$	400,831	$	374,040	$	318,508
Working capital (7)		182,733		163,422		536,442		550,656		438,443
Total assets		291,133		671,424		765,839		743,379		628,089
Total stockholders’ equity (7)		262,324		266,050		678,565		664,971		562,396

Special dividend announced	Special dividend paid	Special dividend amount per share
May 2, 2007	May 28, 2007	$6.30
November 14, 2007	January 8, 2008	$9.00

(1) Effective January 1, 2006, we adopted the provisions of Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, which requires an enterprise to expense the fair value of an award of an equity instrument. Operating expenses from continuing operations in 2008, 2007, and 2006 include $14.3 million, $34.1 million, and $11.3 million, respectively, of stock-based compensation expense, allocated as follows (in thousands):

	Year ended December 31,
	2008		2007		2006
Systems and network operations	$	1,663	$	1,091	$	1,194
Product development		3,284		2,383		960
Sales and marketing		3,551		7,948		2,400
General and administrative		5,806		22,636		6,715
Total	$	14,304	$	34,058	$	11,269

(2) In 2007, we recorded employee expenses from continuing operations related to the cash distributions to shareholders of $56.2 million. The expense was allocated as follows: $668,000 to Systems and network operations, $1.5 million to Product development, $6.8 million to Sales and marketing, and $47.3 million to General and administrative.

(3) In 2007, we recorded restructuring charges of $9.6 million, comprised of $8.0 million of employee separation costs, $831,000 of losses on contractual commitments, and $670,000 of stock-based compensation. In 2006, we recorded restructuring charges of $62.3 million comprised of $44.5 million of impairments of goodwill and other intangible assets, $8.7 million of employee separation costs, $5.7 million of losses on contractual commitments, $2.6 million in costs of abandoned facilities, and $824,000 of stock-based compensation expense.

(4) In 2005, we received proceeds of $83.2 million from the settlement of several outstanding litigation matters and recognized a gain of $79.3 million comprised of the settlement proceeds and interest, less $3.9 million in legal fees.

(5) In 2007, we recorded a full valuation allowance related to our deferred tax assets. In 2006, we recognized a portion of our deferred tax assets related to goodwill, operating loss carryforwards, and equity. In 2005, we recognized a portion of our deferred tax assets related to operating loss carryforwards.

(6) We completed the sale of our directory business on October 31, 2007, the sale of our mobile business on December 28, 2007, and the sale of our Payment Solutions business on March 31, 2004, and the operating results and gains (losses) from the sales of these businesses have been presented as discontinued operations for all periods presented.

(7) Subsequent to the issuance of our consolidated financial statements for the year ended December 31, 2007, we identified certain errors affecting our income tax provision for the year ended December 31, 2007 and certain items have been restated from amounts previously reported. See “Note 1: The Company and Basis of Presentation” under the subsection, Restatement, of the Notes to Consolidated Financial Statements (Item 8, Part II of this Report) for further information.

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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis in conjunction with “Selected Consolidated Financial Data” and our consolidated financial statements and notes thereto included elsewhere in this report. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations has been revised to give effect to the restatement discussed in “Note 1: The Company and Basis of Presentation” of the Notes to Consolidated Financial Statements contained in Item 8 of Part II of this Report.

Overview

InfoSpace, Inc. (“InfoSpace”, “Our” or “We”) is a developer of search tools and technologies that assist consumers with finding content and information on the Internet. We use our metasearch technology to power our own branded Web sites and provide online search services to distribution partners.

We offer search services that enable Internet users to locate information, merchants, individuals, and products online. We offer search services through our Web sites, such as Dogpile.com, WebCrawler.com, MetaCrawler.com, and WebFetch.com, as well as through the Web properties of distribution partners. Partner versions of our Web offerings are generally private-labeled and delivered with each distribution partner’s unique requirements.

We were founded in 1996 and are incorporated in the state of Delaware. Our principal corporate office is located in Bellevue, Washington. We also have an office in Bangalore, India. Our common stock is listed on the NASDAQ Global Select Market under the symbol “INSP.”

From 2004 to 2007, InfoSpace was comprised of three businesses: online search, online directory, and mobile. The mobile business was comprised of a mobile content product offering and a mobile services offering. In 2006, as a result of being informed by one of our carrier partners that it intended to develop direct relationships for mobile ringtone content with the major record labels beginning in 2007, we restructured our operations accordingly, substantially reduced our mobile content offerings in 2007 and sold significant portions of our remaining mobile content assets. In addition, we undertook further strategic restructuring initiatives in 2007 which resulted in the sales of our online directory business and mobile services business in the fourth quarter of 2007. In December 2007, as a result of the sales of those businesses, we committed to a plan to make operational changes to our business, which included a reduction in our workforce and, as part of the workforce reduction, consolidation of our facilities. Following the sale of our mobile and directory businesses, our revenues are derived exclusively from providing online search services.

We generate revenues from our Web search services when an end user of our services clicks on a paid search link displayed on our owned Web site or displayed on a distribution partner’s Web property. We receive content for our search services from certain content providers, whom we refer to as our customers. Revenue from Google and Yahoo! jointly account for over 95% of our total revenue for the year ended December 31, 2008, and we expect this concentration to continue in the foreseeable future. If either of these customers reduces or eliminates the content it provides to us or our distribution partners, or if either of these customers was unwilling to pay us amounts that it owes us, our financial results may materially suffer. Our principal agreements with these customers expire in 2011.

In addition to revenues from search services, we earn service revenue from certain distribution partners, such as a fixed monthly fee in exchange for portal infrastructure services.

Our ability to grow our online search services revenue on our owned Web sites relies on growth in the volume of paid clicks, the fees advertisers pay our customers for these paid clicks, and the percentage of these fees our customers share with us.

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Similar to the revenues earned on our owned Web sites, revenues from distribution partners are dependent upon growth in the volume of paid clicks, the fees advertisers pay our customers for these paid clicks, and the percentage of these fees our customers share with us. We have experienced steady growth in revenues from our search services offered through the Web properties of distribution partners, which has been primarily attributable to growth in paid click volumes from new distribution partners’ Web properties in the United States. In recent periods, our customers’ process of measuring the quality of paid clicks and adjusting the fees paid to us has adversely affected revenues from certain of our distribution partners. In an effort to drive quality traffic to our customers, we continue to invest in product development to expand the online search services we offer to our distribution partners.

Engineering, operations and product management personnel remain paramount to our ability to deliver high quality online search services, as well as enhance our current technology and grow our product offerings. Therefore, we expect to continue to invest in our workforce and increase our research and development operations in India. Additionally, we may utilize our cash and short-term and long-term available-for-sale investments to acquire businesses and other assets that will enhance our current technologies and extend our product offerings.

In 2008, we closed our European facilities and incurred $757,000 in charges primarily related to employee separation.

Overview of 2008 Operating Results

The following is an overview of our operating results for the year ended December 31, 2008. A more detailed discussion of our operating results, comparing our operating results for the years ended December 31, 2008, 2007, and 2006, is included under the heading “Historical Results of Operations” in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The operating results of the directory and mobile businesses have been presented as discontinued operations in our consolidated financial statements for all periods presented. The process used to separately present continuing and discontinued operations relied on certain estimates and assumptions, and the historical results of operations presented in our consolidated financial statements do not necessarily reflect the results that would have existed had we provided our online search services as a standalone business throughout the periods presented. Due to the rapidly evolving nature of our business, overall market conditions and the process used to separately present continuing and discontinued operations, we believe that comparisons of our 2008 operating results to prior years are not necessarily meaningful, and you should not rely upon them as indications of future performance. The loss from our discontinued operations, net of income taxes, was $1.5 million in 2008, compared to $25.2 million in 2007.

Revenues for 2008 increased to $156.7 million from $140.5 million in 2007. This increase was due to an increase in revenue from search results delivered through our distribution partners. This increase was partially offset by a decrease in revenue from our owned and operated properties. Revenue from owned and operated properties was down due to a decrease in the average fees per paid click that our customers share with us although paid click volume on our owned properties increased in 2008. The decrease in average fees per paid click was the result of a decrease in advertiser fees paid per click to our customers and a shift in the mix of revenue reflecting a higher proportion derived from our direct marketing initiatives on our owned properties. Average fees per paid click for revenues derived through our direct marketing initiatives historically have been lower. During 2008, 65% of our search revenues came from our search distribution partners, compared to 58% in 2007.

Content and distribution costs for 2008 increased to $76.0 million from $61.8 million in 2007, primarily due to an increase in revenue from search results delivered through certain of our distribution partners, and increases in our revenue sharing rates with our distribution partners.

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Other operating expenses for 2008, excluding Restructuring and Other, net, were $77.1 million, a decrease of $82.5 million from $159.6 million in 2007. Other operating expenses include expenses related to Systems and network operations, Product development, Sales and marketing, General and administrative, and Depreciation. The decrease from 2007 was primarily attributable to expenses recorded in 2007 for cash payments and equity awards to employees and directors related to the $507.3 million in cash distributions to shareholders declared in 2007, and stock-based compensation related to accelerating the vesting of equity awards for certain employees in connection with the sale of our mobile and directory businesses, and a decrease in 2008 in other operating expenses as a result of our restructuring described in the “Overview” section above.

Total restructuring charges for 2008 were $17,000, compared to $9.6 million in 2007. Other, net of $1.9 million and $3.2 million for 2008 and 2007, respectively, was related to the gains on the sales of non-core assets. Loss on investments, net for 2008 was $28.5 million, compared to $2.1 million in 2007. The increase from 2007 was primarily due to other-than-temporary impairments of our auction rate securities investments and our investment in a privately-owned company.

Other income decreased to $7.1 million in 2008 compared to other income of $18.2 million in 2007 primarily due to reduced interest income resulting from lower cash and marketable investments balances as well as from declining interest rates. We recognized income tax expense from continuing operations in 2008 of $598,000 primarily relating to current federal, state and foreign income taxes, compared to income tax expense from continuing operations in 2007 of $13.4 million, primarily from the establishment of a valuation allowance against deferred tax assets.

Loss from continuing operations in 2008 was $16.5 million, compared to loss from continuing operations of $84.5 million in 2007, and was attributable to the items noted above.

Critical Accounting Policies and Estimates

“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as disclosures included elsewhere in this Annual Report on Form 10-K, is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and disclosures of contingencies. In some cases, we could have reasonably used different accounting policies and estimates.

The Securities and Exchange Commission (“SEC”) has defined a company’s most critical accounting policies as the ones that are the most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. On an ongoing basis, we evaluate the estimates used, including those related to revenue recognition, the fair value of investments, impairment of goodwill, the estimated allowance for sales returns and doubtful accounts, stock-based compensation, discontinued operations, accrued contingencies and the valuation allowance for our deferred tax assets. We base our estimates on historical experience, current conditions and on various other assumptions that we believe to be reasonable under the circumstances and, based on information available to us at that time, we make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources as well as identify and assess our accounting treatment with respect to commitments and contingencies. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions. We believe the following critical accounting policies involve the more significant judgments and estimates used in the preparation of our consolidated financial statements. We also have other accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results. For additional information see “Note 2: Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements (Item 8 of Part II of this Report).

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Revenue Recognition

Our revenues are derived from products and services delivered to our search customers. In general, we recognize revenues in the period in which the services are performed. Search revenue is recorded on a gross basis in accordance with Emerging Issues Task Force Issue 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent. We are the primary obligor in the revenue-generating relationships with our search engine customers, we separately negotiate each revenue or unit pricing contract independent of any revenue sharing arrangements and assume the credit risk for amounts invoiced to such customers. We, through our meta-search technology, determine the paid click, content and information directed to our owned and operated Web sites and our distribution partners’ Web properties. We earn revenue from our search engine and directory listing customers by providing paid search clicks generated from our distribution partners’ Web properties based on separately negotiated and agreed-upon terms with each distribution partner.

We recognize amounts due to our distribution partners in the period they are earned and classify such costs as Content and distribution expense in the Consolidated Statements of Operations and Comprehensive Income (Loss). See “Note 2: Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements (Item 8 of Part II of this Report) for a description of products and services and the related revenue recognition policy.

Fair Value Measurements

On January 1, 2008, we adopted Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements, issued by the Financial Accounting Standards Board (“FASB”). SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and expands required disclosures about fair value measurements. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Our $155.5 million of available-for-sale securities include $141.6 million of investments which are classified as short-term as of December 31, 2008, in the Level 1 input category, as defined by SFAS No. 157, because active markets and quoted prices exist for those assets. The remainder of our available-for-sale securities is comprised of $13.6 million of auction rate securities (“ARS”) which are classified as long-term, in the Level 3 category, as defined by SFAS No. 157, because there are significant unobservable inputs associated with those investments. We paid $33.4 million for our ARS that we held at December 31, 2008, which are floating rate securities with either long-term maturities or no maturity date, which are marketed by financial institutions with auction reset dates primarily at 28-day intervals to provide short-term liquidity, and which pay interest rates at 2% above the London Interbank Offered Rate (“LIBOR”). Beginning in August 2007, auctions for the ARS that we held at December 31, 2008 began to fail due to insufficient bids from buyers, which resulted in higher interest rates being earned on those securities. Although we continue to receive regular interest payments on those ARS, we do not expect to be able to receive the principal amounts until one or more of the following events occur: future auctions of those ARS are successful, we sell those securities in a secondary market which is currently not active, or the issuers redeem those ARS.

We own two types of ARS. The first type of ARS is collateralized by investment-grade corporate debt and prime-rated mortgage-backed debt, has a long-term maturity date, and is insured in the event of default by monoline insurance companies. We paid $21.4 million for our holdings at December 31, 2008 in the this type of ARS, and determined the fair values by using discounted cash flow models for both the ARS trust payments and the monoline insurer payments, weighted by the probabilities of trust default and the fair value of the collateral. Those models relied upon certain unobservable inputs, including our estimate of the holding periods, ranging from 6 to 28 years for the ARS trusts and from 16 to 42 years for the monoline insurers, the annual discount rates applied to future cash flows, which we primarily based on the historical credit default swap rates for comparable ARS trust entities and monoline insurance companies, ranging from 4% to 36% in excess of LIBOR for the ARS trusts and from 16% to 49% for the monoline insurers, and our estimate of the probabilities of ARS trust default, ranging from 0% to 50%.

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The second type of ARS has no maturity date and, in the event of default or liquidation of the collateral by the ARS issuer, we or the ARS trust are entitled to receive non-convertible preferred shares in the ARS issuer; ARS of that type are also known as auction rate preferred securities (“ARPS”). We originally paid $12.0 million for the ARPS that we held at December 31, 2008. In 2008, an issuer of one of our ARPS liquidated the ARPS trust collateral and replaced it with non-cumulative perpetual preferred shares in the ARPS issuer. We paid $5.0 million for that ARPS, and the fair value at December 31, 2008 was zero ($0). We determined the fair value of that ARPS at December 31, 2008 by using a discounted cash flow model for the preferred dividend payments, weighted by the estimated probability of dividend payments being declared and paid. The model relied upon certain unobservable inputs, including our estimate of the holding period, which was 40 years, the annual discount rates applied to future cash flows, which we primarily based on the historical credit default swap rates for the ARPS issuers, ranging from 49% to 82% in excess of LIBOR, and our estimate of the probability of dividends being declared and paid, which was 0%. No dividend has been declared or paid on that ARPS and we do not expect a dividend to be declared or paid in the future. In 2008, an issuer of certain of our ARPS terminated the ARPS trusts and issued us non-cumulative perpetual preferred shares in the ARPS issuer. We paid $7.0 million for those ARPS, and the fair value of the preferred shares at December 31, 2008 was $365,000. We determined the fair values of those preferred shares at December 31, 2008 by using discounted cash flow models for the preferred dividend payments, weighted by the estimated probabilities of dividend payments being declared and paid. The models relied upon certain unobservable inputs including our estimate of the holding periods, which was 40 years, the annual discount rates applied to future cash flows, which we primarily based on the historical credit default swap rates for the ARPS issuer, ranging from 22% to 47% in excess of LIBOR, and our estimate of the probabilities of dividends being declared and paid, ranging from 0% to 50%. Dividends have been declared and paid on those preferred shares subsequent to December 31, 2008. For the remaining ARPS, for which we paid $7.0 million, there was a single issuer, and we determined their fair values to be an aggregate $1.8 million at December 31, 2008 by using discounted cash flow models for the ARPS trust payments, weighted by our estimated probability of trust default. The models relied upon certain unobservable inputs, including our estimate of the holding periods, which was 40 years, the annual discount rate applied to future cash flows, which was primarily based on the historical credit default swap rates for the ARPS issuer, ranging from 11% to 24% in excess of LIBOR, and our estimate of the probabilities of trust default, which was 0%.

In the year ended December 31, 2008, we recorded an other-than-temporary impairment of our available-for-sale investments in Loss on investments, net in our Consolidated Statements of Operations and Comprehensive Income (Loss) of $24.3 million, which included $776,000 of impairments previously classified as temporary. We recorded ARS investment impairments in Loss on investments, net of $2.2 million and zero ($0) in the years ended December 31, 2007 and 2006, respectively.

We review the impairments of our available-for-sale investments in accordance with the provisions of SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, and related guidance issued by the FASB and the SEC. We classify the impairment of any individual ARS as either temporary or other-than-temporary. The differentiating factors between temporary and other-than-temporary impairments are primarily the length of the time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer and our intent and ability to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

As of December 31, 2007, we held warrants to purchase shares in a privately-held company that had a carrying value of $188,000. In the year ended December 31, 2008, we recorded a charge of $188,000 related to those warrants in Loss on investments, net in our Consolidated Statements of Operations and Comprehensive Income (Loss), reducing the carrying value of those warrants to zero ($0). The warrants are classified in Other long-term assets, in the Level 3 category, because there are significant unobservable inputs associated with them. We consider the warrants to be derivatives, and follow SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended and interpreted, which requires that all derivatives be carried at fair value. We account for all derivatives by recognizing the changes in their fair values as gains or losses on investments in our Consolidated Statements of Operations and Comprehensive Income (Loss).

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We use fair value measurements on a recurring basis in the assessment of our equity investment in a privately-held company classified as Other long-term assets, in the Level 3 category, because there are significant unobservable inputs associated with them. In the year ended December 31, 2008, we recorded an other-than-temporary impairment charge of $2.0 million in Loss on investments, net in our Consolidated Statements of Operations and Comprehensive Income (Loss), reducing the carrying value of our investment in that privately-held company to zero ($0). We assessed our investment in that privately-held company for impairment in accordance with FASB Staff Position FAS 115-1/124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments, and the SEC’s Staff Accounting Bulletin Topic 5M, Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities. We did not record any impairment charges for the investment in a privately-held company in the years ended December 31, 2007 and 2006.

In the years ended December 31, 2008, 2007 and 2006, we did not measure the fair value of any of our assets or liabilities other than cash and cash equivalents, available-for-sale investments, warrants and investment in a privately-held company. We consider the carrying values of accounts receivable, notes and other receivables, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities and assets and liabilities of discontinued operations to approximate fair values primarily due to their short-term nature.

For additional information see “Note 4: Fair Value Measurements” of the Notes to Consolidated Financial Statements (Item 8 of Part II of this Report.)

Accounting for Goodwill and Certain Other Intangible Assets

SFAS No. 142, Goodwill and Other Intangible Assets, requires that goodwill and intangible assets with indefinite lives be tested for impairment on an annual basis and between annual tests in certain circumstances and requires an allocation of goodwill to the portions of a reporting unit when a portion of that reporting unit is disposed. In addition, certain circumstances may require testing for impairment in conjunction with restructuring in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. On a quarterly basis, we assess whether business conditions, including material changes in the fair value of our outstanding common stock, indicate that our goodwill may not be recoverable.

When a portion of a reporting unit is disposed, goodwill is allocated to the disposed and retained portions based on the relative fair values of the respective businesses. Allocating goodwill to portions of a reporting unit requires judgment, including the identification of reporting unit portions, assigning assets and liabilities to the portions, assigning goodwill to the portions, and determining the fair value of each portion. The goodwill associated with the disposed portion is included in the portion’s carrying amount in determining the gain or loss on disposal. In 2007, we sold our directory business, which was combined with our search business in our online reporting unit. Based upon our analysis, we allocated $60.5 million of goodwill to our directory business, which was used in determining the gain on its sale to Idearc Inc.

Upon the sale of the mobile business in 2007, we determined that we no longer operate separate reporting units. We performed our annual impairment analysis of the goodwill on our balance sheet as of November 30, 2008, and we determined that there was no impairment. Our analysis compared the book value of our shareholders’ equity to the fair value of our outstanding common stock, based on quoted market prices, which exceeded the book value of our shareholders’ equity on the annual measurement date. At December 31, 2008, we had $43.9 million of goodwill on our balance sheet. Subsequent to December 31, 2008, there has been a decline in our market capitalization to an amount below our recorded stockholders’ equity as of December 31, 2008. This may be a triggering event requiring us to perform a test for impairment of our goodwill during the quarter ending March 31, 2009 and may result in an impairment charge for some or all of our recorded goodwill balance.

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Other intangible assets were tested for impairment by comparing their carrying amounts to their fair values. We measured the fair value of such assets by estimating the future undiscounted cash flows attributable to them, and recognized an impairment if their carrying amounts exceeded the estimated fair values. Such evaluations rely on various assumptions, including the timing of future events and market conditions. At December 31, 2008, we no longer held material other intangible assets.

Allowances for Sales and Doubtful Accounts

Our management must make estimates of potential future sales allowances related to current period revenues for our products and services. Our sales allowance estimates are primarily based upon customer communications regarding revenue adjustments for poor traffic quality. Additionally, we analyze historical adjustments, current economic trends and changes in customer demand when evaluating the adequacy of the sales allowances. Estimates must be made and used in connection with establishing the sales allowance in any accounting period.

The allowance for doubtful accounts is a management estimate that considers actual facts and circumstances of individual customers and other debtors, such as financial condition and historical payment trends. We evaluate the adequacy of the allowance utilizing a combination of specific identification of potentially problematic accounts and identification of accounts that have exceeded payment terms.

Stock-Based Compensation

On January 1, 2006, we adopted SFAS No. 123(R), Share-Based Payment, which requires companies to record stock compensation expense for equity-based awards granted, including stock options and restricted stock unit grants, for which expense will be recognized over the service period of the equity-based award based on the fair value of the award at the date of grant. During 2008, 2007 and 2006, we recognized $14.3 million, $34.1 million and $11.3 million of stock-based compensation expense, respectively.

Calculating stock-based compensation expense relies upon certain assumptions, including the expected term of the stock-based awards, stock price volatility, expected interest rate, number and types of stock-based awards, and the pre-vesting forfeiture rate. If we use different assumptions due to changes in our business or other factors, our stock-based compensation expense could vary materially in the future.

Discontinued Operations

In accordance with the provisions of SFAS No. 144, the gains on sale, results of operations and cash flows of the directory and mobile businesses presented for all periods have been reported as discontinued operations. In addition, the assets and liabilities, if any, of the directory and mobile business have been classified as assets and liabilities of discontinued operations at December 31, 2008 and 2007. The process used to separately present continuing and discontinued operations required significant judgment to implement and relied on certain estimates and assumptions. Different estimates and assumptions could materially affect the allocations to the directory and mobile businesses of gains on sale, results of operations, cash flows, assets and liabilities.

Contingencies

We are subject to various legal proceedings and claims and tax matters, the outcomes of which are subject to significant uncertainty. SFAS No. 5, Accounting for Contingencies, requires that an estimated loss from a loss contingency should be accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. Disclosure of a contingency is required if there is at least a reasonable possibility that a loss has been incurred. We evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact our financial position or our results of

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operations. See “Note 7: Commitments and Contingencies” of the Notes to Consolidated Financial Statements (Item 8 of Part II of this Report), for further information regarding contingencies.

Income Taxes

We account for income taxes under the asset and liability method, under which deferred tax assets, including net operating loss carryforwards, and liabilities are determined based on temporary differences between the book and tax bases of assets and liabilities. We periodically evaluate the likelihood of the realization of deferred tax assets, and reduce the carrying amount of the deferred tax assets by a valuation allowance to the extent we believe a portion will not be realized. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, the carryforward periods available to us for tax reporting purposes, and other relevant factors. There is a wide range of possible judgments relating to the valuation of our deferred tax assets.

During the years ended December 31, 2008 and 2007, based on the weight of available evidence, we determined that it was not more likely than not that we would realize our deferred tax assets. Accordingly, we provided a valuation allowance against our net deferred tax assets at December 31, 2008 and 2007. During the year ended December 31, 2006, we recorded an income tax benefit on continuing operations primarily attributable to a reduction in the valuation allowance against deferred tax assets. Significant judgment is required in making this assessment, and it is very difficult to predict when, if ever, we may conclude that any portion of our deferred tax assets are more likely than not realizable.

Historical Results of Operations

For the year ended December 31, 2008, our net loss totaled $18.7 million, which includes a loss from continuing operations of $16.5 million. We have incurred net losses on an annual basis for all but three of the years since our inception, and as of December 31, 2008, we had an accumulated deficit of $1.0 billion.

The operating results of the directory and mobile businesses have been presented as discontinued operations in our consolidated financial statements for all periods presented. The process used to separately present continuing and discontinued operations relied on certain estimates and assumptions, and the historical results of operations presented in our consolidated financial statements do not necessarily reflect the results of operations that would have existed had we provided our online search services as a standalone business throughout the periods presented, and comparisons of our 2008 revenues and operating results to prior years are not necessarily meaningful. Due to the rapidly evolving nature of our business and overall market conditions, we believe that period-to-period comparisons of our revenues and operating results are not necessarily meaningful, and you should not rely upon them as indications of future performance.

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The following table sets forth the historical results of our operations (in thousands and as percent of revenues).

	Years ended December 31,									Years ended December 31,
	2008			2007 (1)			2006			2008		2007 (1)		2006
	(in thousands)									(as a percent of revenue)
Revenues	$	156,727		$	140,537		$	153,800		100.0	%	100.0	%	100.0	%
Operating expenses
Content and distribution		75,969			61,765			62,346		48.5		43.9		40.5
Systems and network operations		11,537			9,800			11,494		7.4		7.0		7.5
Product development		9,931			9,921			6,814		6.3		7.1		4.4
Sales and marketing		24,261			29,259			15,935		15.5		20.8		10.4
General and administrative		24,079			105,083			34,507		15.3		74.8		22.4
Depreciation		7,335			5,542			5,044		4.7		3.9		3.3
Restructuring		17			9,590			62,316		0.0		6.8		40.5
Other, net		(1,897	)		(3,248	)		—		(1.2	)	(2.3	)	0.0
Total operating expenses		151,232			227,712			198,456		96.5		162.0		129.0
Operating income (loss)		5,495			(87,175	)		(44,656	)	3.5		(62.0	)	(29.0	)
Loss on investments		(28,520	)		(2,117	)		—		(18.2	)	(1.6	)	0.0
Other income, net		7,149			18,226			19,581		4.6		13.0		12.7
Loss from continuing operations before income tax benefit (expense)		(15,876	)		(71,066	)		(25,075	)	(10.1	)	(50.6	)	(16.3	)
Income tax benefit (expense) (1)		(598	)		(13,409	)		29,060		(0.4	)	(9.5	)	18.9
Income (loss) from continuing operations (1)		(16,474	)		(84,475	)		3,985		(10.5	)	(60.1	)	2.6
Loss from discontinued operations, net of taxes (1)		(1,455	)		(25,246	)		(19,073	)	(0.9	)	(18.0	)	(12.4	)
Gain (loss) on sale of discontinued operations, net of taxes (1)		(770	)		131,454			—		(0.5	)	93.6		0.0
Net income (loss) (1)	$	(18,699	)	$	21,733		$	(15,088	)	(11.9	)%	15.5	%	(9.8	)%

(1) Subsequent to the issuance of our consolidated financial statements for the year ended December 31, 2007, we identified certain errors affecting our income tax provision for the year ended December 31, 2007 and certain items have been restated from amounts previously reported. See “Note 1: The Company and Basis of Presentation” under the subsection, Restatement, of the Notes to Consolidated Financial Statements (Item 8, Part II of this Report) for further information.

Results of Operations for the Years Ended December 31, 2008, 2007, and 2006

Revenues.     We receive revenues from our customers when an end user of our Web search services clicks on a paid search link that is provided by a customer and displayed on our Web site or displayed on the Web property of a distribution partner. Revenues are recognized in the period in which a paid click occurs and are based on the amounts earned and remitted to us by our customers for such clicks. In addition, we earn services revenue from certain distribution partners, such as a fixed monthly fee in exchange for portal infrastructure services. Revenues for the years ended December 31, 2008, 2007, and 2006 are presented below (in thousands):

	2008		Change		2007		Change			2006
Revenue	$	156,727	$	16,190	$	140,537	$	(13,263	)	$	153,800

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The increase in revenue for 2008 compared to 2007 was due to an increase in revenue from search results delivered through our distribution partners. This increase was partially offset by a decrease in revenue from our owned and operated properties. Revenue from owned and operated properties was down due to a decrease in the average fees per paid click that our customers share with us although paid click volume on our owned properties increased in 2008. The decrease in average fees per paid click was the result of a decrease in advertiser fees paid per click to our customers and a shift in the mix of revenue reflecting a higher proportion derived from our direct marketing initiatives on our owned properties. In 2008, 65% of our search revenues came from searches conducted by end users on the Web properties of our search distribution partners.

The decrease in revenue for 2007, compared to 2006, was primarily due to a decrease in revenue from search results delivered through certain of our distribution partners, and partially due to decreased paid click volume on our owned properties. In 2007, 58% of our search revenues came from searches conducted by end users on the Web properties of our search distribution partners.

We expect that online search revenue from searches conducted by end users on sites of our distribution partners will continue to be a significant share of our online search revenues for the foreseeable future.

Content and Distribution Expenses.     Content and distribution expenses consist principally of costs related to revenue sharing arrangements with our content and distribution partners, as well as content and data licenses. Content and distribution expenses in total dollars (in thousands) and as a percent of revenue for the years ended December 31, 2008, 2007, and 2006 are presented below:

	2008			Change			2007			Change			2006
Content and Distribution Expenses	$	75,969		$	14,204		$	61,765		$	(581	)	$	62,346
Percent of Revenue		48.5	%		4.6	%		43.9	%		3.4	%		40.5	%

Content and distribution expenses increased by $14.2 million to $76.0 million in 2008 compared to $61.8 million in 2007. The increase in cost as a percent of revenues for content and distribution expense was primarily due to an increase in revenue from search results delivered through our distribution partners, and increases in our revenue sharing rates. We anticipate that our content and distribution costs will increase in absolute dollars if revenues increase through growth from existing arrangements with our distribution partners or we add new distribution partners. If revenue generated from our distribution partners increases at a greater rate than revenues generated from our own branded Web sites, content and distribution costs as a percent of revenue will increase.

Content and distribution expenses decreased by $581,000 to $61.8 million in 2007 compared to $62.3 million in 2006. The increase in cost as a percent of revenues for content and distribution expense was primarily due to increases in our revenue sharing rates and minimum contractual payments made to distribution partners.

Systems and Network Operations Expenses.     Systems and network operations expenses are associated with the delivery, maintenance and support of our services, data management and infrastructure, including personnel expenses, which include salaries, benefits and other employee related costs, stock-based compensation expense, and costs for temporary help and contractors to augment our staffing, communication costs, equipment repair and maintenance, and professional service fees. Systems and network operations expenses in total dollars (in thousands) and as a percent of revenue for the years ended December 31, 2008, 2007, and 2006 are presented below:

	2008			Change			2007			Change			2006
Systems and Network Operations Expenses	$	11,537		$	1,737		$	9,800		$	(1,694	)	$	11,494
Percent of Revenue		7.4	%		0.4	%		7.0	%		(0.5	)%		7.5	%

Systems and network operations expenses increased by $1.7 million to $11.5 million in 2008 compared to $9.8 million in 2007. The absolute dollar increase for 2008 compared to 2007 was primarily attributable to an

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increase of $599,000 in salaries and employee benefits, an increase of $573,000 in stock-based compensation expense, and an increase of $542,000 in contractors to augment staffing. Partially offsetting these increases was a decrease in employee expenses of $650,000 related to the cash distributions to shareholders declared in 2007.

Systems and network operations expenses decreased by $1.7 million to $9.8 million in 2007 compared to $11.5 million in 2006. The absolute dollar decrease for 2007 compared to 2006 was primarily attributable to a decrease of $1.7 million in personnel expenses and a $705,000 decrease in professional services fees. Partially offsetting these decreases were employee expenses of $668,000 related to the cash distributions to shareholders.

Product Development Expenses.     Product development expenses consist principally of personnel expenses, which include salaries, stock-based compensation expense, benefits and other employee related costs, and temporary help and contractors to augment our staffing, research, development, support and ongoing enhancements of our products and services. Product development expenses in total dollars (in thousands) and as a percent of revenue for the years ended December 31, 2008, 2007, and 2006 are presented below:

	2008			Change			2007			Change			2006
Product Development Expenses	$	9,931		$	10		$	9,921		$	3,107		$	6,814
Percent of Revenue		6.3	%		(0.8	)%		7.1	%		2.7	%		4.4	%

Product development expenses increased by $10,000 to $9.9 million in 2008 compared to $9.9 million in 2007. The absolute dollar increase in 2008 compared to 2007 was primarily attributable to an increase of $900,000 in stock-based compensation expense and an increase of $398,000 in salaries and employee benefits. These increases were offset by a decrease of $1.4 million in employee expenses related to the cash distributions to shareholders.

Product development expenses increased by $3.1 million to $9.9 million in 2007 compared to $6.8 million in 2006. The absolute dollar increase in 2007 compared to 2006 was primarily attributable to employee expenses of $1.5 million related to the cash distributions to shareholders, an increase of $1.4 million in stock-based compensation expense and an increase in professional services fees of $877,000. These increases were partially offset by a decrease of $535,000 in expenses for temporary employees as a result of the restructuring of our operations that we implemented in 2006.

Product development costs may not be consistent with changes in revenues as they represent key costs to develop and enhance our product and service offerings. We believe that investments in technology are necessary to remain competitive, and we anticipate that we will continue to invest in our products and services.

Sales and Marketing Expenses.     Sales and marketing expenses consist principally of personnel costs, which include salaries, stock-based compensation expense, benefits and other employee related costs, and the cost of temporary help and contractors to augment our staffing, and marketing expenses associated with our owned and operated Web sites, consisting of agency fees, brand promotion expense, market research expense and online direct marketing expense associated with traffic acquisition. Sales and marketing expenses in total dollars (in thousands) and as a percent of revenue for the years ended December 31, 2008, 2007, and 2006 are presented below:

	2008			Change			2007			Change			2006
Sales and Marketing Expenses	$	24,261		$	(4,998	)	$	29,259		$	13,324		$	15,935
Percent of Revenue		15.5	%		(5.3	)%		20.8	%		10.4	%		10.4	%

Sales and marketing expenses decreased by $5.0 million to $24.3 million in 2008 compared to $29.3 million in 2007. The absolute dollar decrease in 2008 was primarily attributable to a decrease in employee expenses of $6.9 million related to the cash distributions to shareholders, a decrease in stock-based compensation expense of $4.4 million, and a decrease in professional services fees of $646,000. These decreases were partially offset by an

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increase in marketing expenses associated with our owned and operated Web sites of $6.3 million and an increase in salaries and employee benefits totaling $996,000.

Sales and marketing expenses increased by $13.3 million to $29.3 million in 2007 compared to $15.9 million in 2006. The absolute dollar increase in 2007 was primarily attributable employee expenses of $6.8 million related to the cash distributions to shareholders, an increase in stock-based compensation expense of $5.5 million, an increase in personnel expenses totaling $2.0 million, an increase in professional services fees of $596,000, and an increase in employee-related expenses of $324,000. These increases were partially offset by a decrease in marketing expenses associated with our owned and operated Web sites of $2.1 million.

We expect to continue to invest in marketing initiatives to promote search services on our branded Web sites.

General and Administrative Expenses.     General and administrative expenses consist primarily of personnel expenses, which include salaries, benefits and other employee related costs, stock-based compensation expense, professional service fees, which include legal fees, audit fees, SEC compliance costs, which include costs related to compliance with the Sarbanes-Oxley Act of 2002, certain legal settlements, occupancy and general office expenses, and general business development and management expenses. General and administrative expenses in total dollars (in thousands) and as a percent of revenue for the years ended December 31, 2008, 2007, and 2006 are presented below:

	2008			Change			2007			Change			2006
General and Administrative Expenses	$	24,079		$	(81,004	)	$	105,083		$	70,576		$	34,507
Percent of Revenue		15.3	%		(59.5	)%		74.8	%		52.4	%		22.4	%

General and administrative expenses decreased by $81.0 million to $24.1 million in 2008 compared to $105.1 million in 2007. The absolute dollar decrease in 2008 compared to 2007 was primarily attributable to employee expenses of $46.5 million related to the cash distributions to shareholders declared in 2007, a decrease in stock-based compensation expense of $16.8 million, a decrease in professional services fees of $9.9 million, decreases in salaries and employee benefits totaling $2.5 million, a decrease in expense due to a contract termination charge of $2.3 million in 2007, a decrease in software licensing fees of $1.6 million, and a decrease in insurance expense of $1.0 million.

General and administrative expenses increased by $70.6 million to $105.1 million in 2007 compared to $34.5 million in 2006. The absolute dollar increase in 2007 compared to 2006 was primarily attributable to employee expenses of $47.3 million related to the cash distributions to shareholders, an increase in stock-based compensation expense of $15.9 million, increases in personnel expenses totaling $3.2 million, a contract termination charge of $2.3 million, an increase in software licensing fees of $2.0 million, and an increase in professional services fees of $1.0 million. These increases were partially offset by decreases in facilities costs of $1.5 million.

Restructuring.     Restructuring charges reflect actual and estimated costs associated with the reductions in workforce and costs associated with the consolidation and closures of certain of our facilities. Restructuring charges for the years ended December 31, 2008, 2007, and 2006 are presented below (in thousands):

	2008			2007		2006
Restructuring charges:
Impairment of goodwill and intangible assets	$	—		$	—	$	44,526
Employee separation costs		52			7,963		8,687
Stock-based compensation expense		60			670		824
Losses on contractual commitments		(88	)		831		5,671
Estimated future lease losses		(7	)		—		1,667
Impairment of leasehold improvements and fixed assets		—			126		941
	$	17		$	9,590	$	62,316

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In 2008, we recorded $17,000 of restructuring expense related to plans committed to in 2007 and 2006, as described below.

In 2007, we sold our directory and mobile services businesses and, as a result, we committed to a plan to make operational changes to our business, which included a reduction in our workforce and, as part of the workforce reduction, consolidation of our facilities. We recorded $7.4 million of expense related to that plan in 2007, and $2.2 million of adjustments and additions in 2007 relating to our restructuring plan committed to in 2006, as described below.

In 2006, as a result of being informed by one of our carrier partners that it intended to develop direct relationships for mobile ringtone content with the major record labels beginning in 2007, we committed to a plan to substantially reduce our mobile content offerings and make operational changes to our business, which included a reduction in our workforce and, as part of the workforce reduction, consolidation of our facilities.

We do not expect to incur material restructuring charges in 2009 related to initiatives identified to date.

Depreciation.     Depreciation of property and equipment includes depreciation of network servers and data center equipment, computers, software, office equipment and fixtures, and leasehold improvements. Depreciation expenses for the years ended December 31, 2008, 2007, and 2006 are presented below (in thousands):

	2008		Change		2007		Change		2006
Depreciation Expenses	$	7,335	$	1,793	$	5,542	$	498	$	5,044

The $1.8 million increase from 2007 to 2008 was primarily a result of increases in depreciation of $810,000 for purchased software, increases in depreciation of $775,000 for our internally developed software, and increases in depreciation expense of $548,000 for data center equipment.

The $498,000 increase from 2006 to 2007 was primarily a result of depreciation of $1.1 million for property and equipment recently placed in service related to our data centers and increases in depreciation of $349,000 for our internally developed software. These increases were partially offset by reductions in depreciation of $876,000 related to leasehold improvements.

Other, Net.     Other, net consists of costs, charges, refunds or gains that are not directly associated with other revenue or operating expense classifications. Other, net of $1.9 million in 2008 and $3.2 million in 2007 consisted of gains on the sale of non-core assets.

Loss on Investments, net.     Loss on investments, net is comprised of the following for the years ended December 31, 2008, 2007, and 2006 (in thousands):

	2008			2007			2006
Other-than-temporary available-for-sale investment impairments	$	(24,332	)	$	(2,182	)	$	—
Impairment of convertible note from equity investee		(2,000	)		—			—
Other-than-temporary impairment of equity investment in privately-held company		(2,000	)		—			—
Increase (decrease) in fair value of warrants		(188	)		65			—
	$	(28,520	)	$	(2,117	)	$	—

In the years ended December 31, 2008 and 2007, we determined that a portion of our auction rate securities, which we classify as long-term available-for-sale securities, were other-than-temporarily impaired, and we recorded a loss on investments of $24.3 million and $2.2 million, respectively. In the year ended December 31, 2008, we determined that our equity investment and related warrants in a privately-held company, as well as a convertible note from that company, were fully impaired, and we recorded a loss on investments of $4.2 million.

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In accordance with SFAS No. 133, we adjust our derivative instruments to fair value and recognize the change in the recorded fair value in earnings. We hold warrants to purchase stock in other companies, which qualify as derivatives, and therefore gains or losses are based on the fair value.

Other Income, Net.     Other income, net, primarily consists of interest income, certain litigation settlements and foreign currency gain (loss).

	2008			2007			2006
Interest income	$	7,315		$	18,194		$	19,681
Gain contingency resolution		1,124			—			—
Foreign currency exchange loss		(661	)		(129	)		(42	)
Gain (loss) on disposal of fixed assets		(629	)		161			49
Other items, net		—			—			(107	)
	$	7,149		$	18,226		$	19,581

Interest income decreased primarily due to lower cash and marketable investments balances in 2008 compared to 2007 and a decline in interest rates. Interest income decreased primarily due to lower cash and marketable investments balances in 2007 compared to 2006.

Income Tax Expense (Benefit).     During the years ended December 31, 2008 and 2007, we recorded an income tax expense on continuing operations of $598,000 and $13.4 million, respectively. During the year ended December 31, 2006, we recorded an income tax benefit on continuing operations of $29.1 million. The 2008 income tax expense of $598,000 is primarily attributable to a $5.6 million tax benefit from current year operations, $436,000 tax expense for non-deductible compensation paid to an executive, and a $5.4 million tax expense for the net increase in the valuation allowance against the deferred tax assets. The 2007 income tax expense of $13.4 million is primarily attributable to a $16.0 million tax expense for increasing the valuation allowance against the deferred tax assets, a $22.3 million tax expense for non-deductible compensation paid to certain executives, and a $24.9 million tax benefit from current year operations. The 2006 income tax benefit of $29.1 million is primarily attributable to a reduction in the valuation allowance against deferred tax assets of $28.6 million related to net operating losses, an $8.2 million tax expense from the non-deductible impairment of certain intangible assets, and a net tax benefit of $8.8 million from current year operations.

At December 31, 2008, we had gross deferred tax assets of $321.7 million, primarily comprised of $289.1 million of accumulated net operating loss carryforwards. During 2008, we determined that it was not more likely than not that we would realize our deferred tax assets in the foreseeable future. Accordingly, we provided a valuation allowance against our deferred tax assets. If in the future, we determine that the realization of any portion of the deferred tax assets is more likely than not to be realized, we will record a benefit to the income statement or to additional paid-in-capital, as appropriate.

Income from Discontinued Operations and Gain on Sale of Discontinued Operations.     In 2007, we completed the sale of our directory and mobile businesses and have reflected income (loss) from those businesses as income (loss) from discontinued operations. For 2007, we recorded a gain on the sale of the directory business of $57.3 million and a gain on the sale of the mobile services business of $74.2 million. For 2008, we recorded a gain on the sale of the directory business of $48,000 and a loss on the sale of the mobile services business of $818,000. Revenue, income before taxes, income tax expense, and income (loss) from discontinued operations for the years ended December 31, 2008, 2007 and 2006 are presented below (in thousands):

Directory	2008			2007			2006
Revenue from discontinued operations	$	—		$	28,882		$	33,103
Income from discontinued operations before taxes		204			11,349			14,748
Income tax expense		(76	)		(4,213	)		(5,191	)
Income from discontinued operations, net of taxes	$	128		$	7,136		$	9,557

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Mobile	2008			2007			2006
Revenue from discontinued operations	$	127		$	103,488		$	184,834
Loss from discontinued operations before taxes		(2,098	)		(50,100	)		(43,299	)
Income tax benefit		515			17,718			14,669
Loss from discontinued operations, net of taxes	$	(1,583	)	$	(32,382	)	$	(28,630	)

Liquidity and Capital Resources

Our principal source of liquidity is our cash and cash equivalents and short-term investments, initially generated from proceeds from private placements and our initial and follow-on public offerings. In addition, more recently we have generated cash from operations in certain periods. Further in 2007, we received proceeds of $225.0 million from the sale of our directory business, and $135.0 million from the sale of our mobile business. In 2008 and 2007, we paid special dividends to our shareholders of $299.3 million and $208.2 million, respectively.

As of December 31, 2008, we had cash and marketable investments of $205.4 million, consisting of cash and cash equivalents of $49.9 million, short-term investments available-for-sale of $141.6 million, and long-term investments available-for-sale of $13.9 million.

We generally invest our excess cash in high quality marketable investments. These investments include securities issued by U.S. government agencies, certificates of deposit, money market funds, corporate bonds and taxable municipal bonds.

Contractual Obligations and Commitments

The following are our contractual obligations and commitments (in thousands):

	2009		2010		2011		2012		2013		Thereafter		Total
Operating lease commitments	$	1,589	$	1,646	$	1,614	$	1,665	$	284	$	—	$	6,798
Purchase commitments		1,773		1,742		1,251		1,026		493		—		6,285
Capital lease commitments, net of imputed interest and executory costs		552		565		209		—		—		—		1,326
Total	$	3,914	$	3,953	$	3,074	$	2,691	$	777	$	—	$	14,409

Operating lease commitments.     We have entered into various non-cancelable operating leases agreements for our offices that expire through 2013. We are committed to pay a portion of the related operating expenses under certain of these lease agreements. These operating expenses are not included in the table above. Certain of these leases have escalating rent payment provisions and we recognize rent expense under such leases on a straight-line basis over the term of the lease.

Purchase commitments.     Our purchase commitments consist primarily of non-cancelable service agreements for our data centers. Included in the table above are purchase commitments of $343,000 and $344,000 due in 2009 and 2010, respectively, which are reflected as liabilities on our balance sheet.

Capital lease commitments.     We entered into capital lease agreements for certain equipment used in our data centers in 2008.

We have pledged a portion of our cash as collateral for standby letters of credit and bank guaranties for certain of our property leases and banking arrangements. At December 31, 2008, the total amount of collateral pledged under these agreements was $5.1 million.

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The above table does not reflect unrecognized tax benefits of $778,000, the timing of which is uncertain. For additional discussion on unrecognized tax benefits see “Note 8: Income Taxes” of the Notes to Consolidated Financial Statements (Item 8 of Part II of this Report.)

Cash Flows

Net cash provided (used) by operating activities consists of net income (loss) offset by certain adjustments not affecting current-period cash flows and the effect of changes in our operating assets and liabilities. Adjustments to net income (loss) to determine cash flow from operations include the loss from discontinued operations, the gain (loss) on sale of discontinued operations, restructuring charges, depreciation, stock-based compensation expense, realized loss on long-term investments, net gain on sale of certain assets, deferred taxes and excess tax benefits from stock-based award activity. Net cash provided (used) by investing activities primarily consists of transactions related to our investments, purchases of property and equipment, loan to equity investee and proceeds from the sale of certain assets. Net cash provided (used) by financing activities consists of a special dividend paid to our shareholders, proceeds from the issuance of stock through the exercise of stock options or warrants and our employee stock purchase plan, cash used to repurchase outstanding stock, and excess tax benefits from stock-based award activity. Net cash provided (used) by operating activities for each of 2008, 2007 and 2006 reflects cash flows from continuing operations only, and does not reflect net cash provided (used) by discontinued operations. The process used to separately present continuing and discontinued operations relied on certain estimates and assumptions, and the historical results of operations presented in our consolidated financial statements do not necessarily reflect the results of operations that would have existed had we provided our online search services as a standalone business throughout the periods presented. Due to the rapidly evolving nature of our business, overall market conditions and the process used to separately present continuing and discontinued operations, we believe that period-to-period comparisons of our cash flows are not necessarily meaningful, and you should not rely upon them as indications of future performance.

Net cash provided (used) by discontinued operations consists of proceeds from the sale of discontinued operations, net cash used to acquire businesses now classified as discontinued operations, income (loss) from discontinued operations, net changes in assets and liabilities of discontinued operations, and purchases of property and equipment classified as discontinued operations.

Our net cash flows are comprised of the following for the years ended December 31, 2008, 2007, and 2006 (in thousands):

	2008			2007			2006
Net cash provided (used) by operating activities	$	(20,182	)	$	(27,276	)	$	60,797
Net cash provided (used) by investing activities		(111,284	)		156,181			(22,950	)
Net cash provided (used) by financing activities		(298,926	)		(169,385	)		5,432
Net cash provided (used) by discontinued operations		(17,998	)		376,419			(32,572	)
Net increase (decrease) in cash and cash equivalents	$	(448,390	)	$	335,939		$	10,707

Net cash used by operating activities was $20.2 million in 2008, consisting of our net loss of $18.7 million, cash used by changes in our operating assets and liabilities of $59.3 million, consisting of decreases in accrued expenses and other liabilities, and adjustments not affecting cash flows used by operating activities of $4.6 million, primarily consisting of decreases in deferred income taxes and the gain on sale of assets. Offsetting the decrease was cash provided by changes in our operating assets and liabilities of $9.4 million, consisting of decreases in notes and other receivables, other long-term assets, accounts receivable, and prepaid expenses and other current assets and increases in accounts payable, and adjustments not affecting cash flows provided by operating activities of $52.9 million, primarily consisting of the loss on long-term investments, stock-based compensation, depreciation, the loss from discontinued operations and the loss on sale of discontinued operations.

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Net cash used by operating activities was $27.3 million in 2007, consisting of changes in our operating assets and liabilities of $14.9 million, primarily consisting of a decrease in accounts payable and increases in notes and other receivables, accounts receivable, and other long-term assets, and adjustments not affecting cash flows provided by operating activities of $158.8 million, primarily consisting of the gain on the sale of discontinued operations, reclassification of the tax benefit from stock-based award activity to financing activities, and the gain on sale of assets. These decreases were partially offset by our net income of $21.7 million, cash provided by changes in our operating assets and liabilities of $35.2 million, consisting of increases in accrued expenses and other current and long-term liabilities and decreases in prepaid expenses and other current assets, and adjustments not affecting cash flows provided by operating activities of $89.4 million, primarily consisting of stock-based compensation, the loss from discontinued operations, decreases in deferred income taxes, restructuring, depreciation, and the loss on long-term investments.

Net cash provided by operating activities was $60.8 million in 2006, consisting of our net loss of $15.1 million, cash provided by changes in our operating assets and liabilities of $10.5 million, consisting of decreases in accounts receivable and prepaid expenses and other current assets and increases in accounts payable, and adjustments not affecting cash flows provided by operating activities of $97.7 million, primarily consisting of restructuring, the loss from discontinued operations, stock-based compensation, and depreciation. Partially offsetting the increase was cash used by changes in our operating assets and liabilities of $7.3 million, primarily consisting of decreases in our accrued expenses and other liabilities and increases in our notes and other receivables and other long-term assets, and adjustments not affecting cash flows provided by operating activities of $25.0 million, primarily consisting of increases in our deferred tax assets.

Net cash used by investing activities was $111.3 million in 2008, primarily consisting of the purchase of $145.3 million of marketable investments and the purchase of $12.3 million in property and equipment. Partially offsetting cash used by investing activities was proceeds from the sale or maturity of our marketable investments of $44.0 million and proceeds from the sale of assets of $2.6 million.

Net cash provided by investing activities was $156.2 million in 2007, consisting of proceeds from the sale or maturity of our marketable investments of $294.4 million and proceeds from the sale of assets of $2.8 million. Partially offsetting cash provided by investing activities was the purchase of $135.4 million of marketable investments, the purchase of $3.7 million in property and equipment, and a $2.0 million loan to an equity investee.

Net cash used by investing activities was $23.0 million in 2006, primarily from the purchase of $313.9 million of marketable investments and $7.4 million of property and equipment purchases. Partially offsetting cash used in investing activities were proceeds from the sale or maturity of our marketable investments of $298.3 million.

Net cash used by financing activities in 2008 was $298.9 million, primarily from the special dividend of $299.3 million paid in January 2008. Partially offsetting cash used in financing activities was $603,000 from the exercise of stock options and the sale of shares through our employee stock purchase plan.

Net cash used by financing activities in 2007 was $169.4 million, primarily from the special dividend of $208.2 million paid in May 2007. Partially offsetting cash used in financing activities were tax benefits generated by stock-based award activity of $23.7 million and $15.1 million from the exercise of stock options and warrants and the sale of shares through our employee stock purchase plan.

Net cash provided by financing activities in 2006 was $5.4 million, which resulted from the exercise of stock options and the sale of shares through our employee stock purchase plan.

Net cash used by operating activities attributable to discontinued operations in 2008 was $18.0 million. Net cash provided by discontinued operations activities in 2007 was $376.4 million, consisting of proceeds from the sale of discontinued operations of $342.6 million and cash from the operating activities attributable to

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discontinued operations of $33.8 million. Net cash used by the operating activities attributable to discontinued operations activities in 2006 was $32.6 million.

We plan to use our cash to fund operations, develop technology, advertise, market and distribute our products and services, and continue the enhancement of our network infrastructure. We may use a portion of our cash for acquisitions, to pay special dividends, or for common stock repurchases.

We believe that existing cash balances, cash equivalents, short term investments and cash generated from operations will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months. However, the underlying assumed levels of revenues and expenses may not prove to be accurate. Our anticipated cash needs exclude any payments for pending or future litigation matters. In addition, we evaluate acquisitions of businesses, products or technologies that complement our business from time to time. Any such transactions, if completed, may use a significant portion of our cash balances and marketable investments. If we are unable to liquidate these investments when we need such liquidity for business purposes, we may need to change or postpone such business purposes or find alternative financing for such business purposes, if available. We may seek additional funding through public or private financings or other arrangements prior to such time. Adequate funds may not be available when needed or may not be available on favorable terms. If we raise additional funds by issuing equity securities, dilution to existing stockholders will result. If funding is insufficient at any time in the future, we may be unable to develop or enhance our products or services, take advantage of business opportunities or respond to competitive pressures, any of which could harm our business.

Illiquid Investments

For discussion on illiquid investments, see Item 7A of Part II of this Report, “Quantitative and Qualitative Disclosures About Market Risk.”

Dispositions

On October 31, 2007, we completed the sale of our directory business to Idearc Inc. for $225 million in cash.

On December 28, 2007, we completed the sale of our mobile services business to Motricity, Inc. for $135 million in cash.

Stock Repurchase Program

On June 16, 2008, our board of directors authorized the repurchase of up to $100 million of our outstanding common stock over the succeeding twelve months. On June 8, 2007, our board of directors authorized the repurchase of up to $100 million of our outstanding common stock which expired on June 7, 2008. On May 30, 2006, our board of directors authorized a stock repurchase plan whereby we were authorized to purchase up to $100 million of our common stock which expired on May 29, 2007. Repurchased shares will be retired and resume the status of authorized but unissued shares of common stock. We did not repurchase any shares during the years ended December 31, 2008, 2007 or 2006.

Quarterly Results of Operations (Unaudited)

The following table presents a summary of our unaudited consolidated results of operations for the eight quarters ended December 31, 2008. The information for each of these quarters has been prepared on a basis consistent with our audited consolidated financial statements. In 2007, we sold our mobile and directory businesses to unaffiliated third parties, and our mobile and directory businesses have been presented as discontinued operations for all periods presented, and the remaining search business’s operating results are partly based on identifying and assigning costs to our search business that were initially shared by those three businesses. The process used to separately present continuing and discontinued operations relied on certain

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estimates and assumptions, and the historical results of operations presented in our selected financial data do not necessarily reflect the results of operations that would have existed had we provided our search services as a standalone business. You should read this information in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K. The operating results for any quarter are not necessarily indicative of results for any future period.

	March 31, 2007			June 30, 2007			September 30, 2007			December 31, 2007 (1)			March 31, 2008			June 30, 2008			September 30, 2008			December 31, 2008
	(in thousands except per share data)
Revenues	$	35,864		$	31,763		$	33,852		$	39,058		$	42,182		$	38,328		$	39,469		$	36,748
Operating expenses:
Content and distribution		14,948			12,597			15,274			18,946			21,792			18,062			18,265			17,850
Systems and network operations		2,279			2,406			2,295			2,820			2,442			2,774			3,238			3,083
Product development		2,279			2,484			2,086			3,072			2,209			2,929			2,757			2,036
Sales and marketing		4,825			6,665			5,518			12,251			3,789			6,041			6,882			7,549
General and administrative		9,642			29,557			12,694			53,190			7,722			4,960			5,940			5,457
Depreciation		1,383			1,273			1,443			1,443			1,487			1,731			2,160			1,957
Restructuring		433			378			558			8,221			140			(114	)		(9	)		—
Other, net		(1,266	)		(2,047	)		65			—			—			(1,897	)		—			—
Total operating expenses		34,523			53,313			39,933			99,943			39,581			34,486			39,233			37,932
Operating income (loss)		1,341			(21,550	)		(6,081	)		(60,885	)		2,601			3,842			236			(1,184	)
Gain (loss) on investments		—			65			—			(2,182	)		(6,707	)		(4,362	)		(11,046	)		(6,405	)
Other income, net		5,325			4,360			2,804			5,737			2,243			2,654			1,458			794
Income (loss) from continuing operations before income tax benefit (expense)		6,666			(17,125	)		(3,277	)		(57,330	)		(1,863	)		2,134			(9,352	)		(6,795	)
Income tax benefit (expense) (1)		(3,075	)		(3,894	)		(3,355	)		(3,085	)		(182	)		577			(548	)		(445	)
Income (loss) from continuing operations (1)		3,591			(21,019	)		(6,632	)		(60,415	)		(2,045	)		2,711			(9,900	)		(7,240	)
Loss from discontinued operations, net of taxes (1)		(4,131	)		(7,111	)		(5,625	)		(8,379	)		(490	)		(821	)		(12	)		(132	)
Gain (loss) on sale of discontinued operations, net of taxes (1)		—			—			—			131,454			(238	)		43			(13	)		(562	)
Net income (loss) (1)	$	(540	)	$	(28,130	)	$	(12,257	)	$	62,660		$	(2,773	)	$	1,933		$	(9,925	)	$	(7,934	)
Net income (loss) per share – Basic (1)
Income (loss) from continuing operations	$	0.11		$	(0.64	)	$	(0.20	)	$	(1.82	)	$	(0.06	)	$	0.08		$	(0.29	)	$	(0.21	)
Loss from discontinued operations		(0.13	)		(0.22	)		(0.17	)		(0.25	)		(0.01	)		(0.02	)		(0.00	)		(0.00	)
Gain (loss) on sale of discontinued operations		—			—			—			3.95			(0.01	)		0.00			(0.00	)		(0.02	)
Net income (loss) per share – Basic	$	(0.02	)	$	(0.86	)	$	(0.37	)	$	1.88		$	(0.08	)	$	0.06		$	(0.29	)	$	(0.23	)
Weighted average shares outstanding used in computing basic income (loss) per share		31,461			32,626			33,158			33,291			34,298			34,334			34,479			34,548
Net income (loss)per share – Diluted (1)
Income (loss) from continuing operations	$	0.11		$	(0.64	)	$	(0.20	)	$	(1.82	)	$	(0.06	)	$	0.08		$	(0.29	)	$	(0.21	)
Loss from discontinued operations		(0.13	)		(0.22	)		(0.17	)		(0.25	)		(0.01	)		(0.02	)		(0.00	)		(0.00	)
Gain (loss) on sale of discontinued operations		—			—			—			3.95			(0.01	)		0.00			(0.00	)		(0.02	)
Net income (loss) per share – Diluted	$	(0.02	)	$	(0.86	)	$	(0.37	)	$	1.88		$	(0.08	)	$	0.06		$	(0.29	)	$	(0.23	)
Weighted average shares outstanding used in computing diluted income (loss) per share		33,644			32,626			33,158			33,291			34,298			34,755			34,479			34,548

49

	March 31, 2007		June 30, 2007		September 30, 2007		December 31, 2007 (1)		March 31, 2008		June 30, 2008		September 30, 2008		December 31, 2008
	(as a percent of revenue)
Revenues	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Operating expenses:
Content and distribution	41.7		39.6		45.1		48.5		51.7		47.1		46.3		48.6
Systems and network operations	6.3		7.6		6.8		7.2		5.8		7.2		8.2		8.4
Product development	6.3		7.8		6.2		7.9		5.2		7.6		7.0		5.5
Sales and marketing	13.5		21.0		16.3		31.4		9.0		15.8		17.4		20.5
General and administrative	26.9		93.0		37.5		136.2		18.3		12.9		15.0		14.8
Depreciation	3.9		4.0		4.3		3.7		3.5		4.5		5.5		5.4
Restructuring	1.2		1.2		1.6		21.0		0.3		(0.3	)	(0.0	)	—
Other, net	(3.5	)	(6.4	)	0.2		0.0		—		(4.8	)	—		—
Total operating expenses	96.3		167.8		118.0		255.9		93.8		90.0		99.4		103.2
Operating income (loss)	3.7		(67.8	)	(18.0	)	(155.9	)	6.2		10.0		0.6		(3.2	)
Gain (loss) on investments	0.0		0.2		0.0		(5.6	)	(15.9	)	(11.4	)	(28.0	)	(17.5	)
Other income, net	14.9		13.7		8.3		14.7		5.3		6.9		3.7		2.2
Income (loss) before income tax benefit (expense)	18.6		(53.9	)	(9.7	)	(146.8	)	(4.4	)	5.5		(23.7	)	(18.5	)
Income tax benefit (expense) (1)	(8.6	)	(12.3	)	(9.9	)	(7.9	)	(0.4	)	1.5		(1.4	)	(1.2	)
Income (loss) from continuing operations (1)	10.0		(66.2	)	(19.6	)	(154.7	)	(4.8	)	7.0		(25.1	)	(19.7	)
Income (loss) from discontinued operations, net of taxes (1)	(11.5	)	(22.4	)	(16.6	)	(21.5	)	(1.2	)	(2.1	)	(0.0	)	(0.4	)
Gain (loss) on sale of discontinued operations, net of taxes (1)	0.0		0.0		0.0		336.6		(0.6	)	0.1		(0.0	)	(1.5	)
Net income (loss) (1)	(1.5	)%	(88.6	)%	(36.2	)%	160.4	%	(6.6	)%	5.0	%	(25.1	)%	(21.6	)%

(1) Subsequent to the issuance of our consolidated financial statements for the year ended December 31, 2007, we identified certain errors affecting our income tax provision for the quarter ended December 31, 2007 related to the determination of the amount of net operating loss carryforwards utilized in 2007 to offset taxable income for 2007. These errors resulted principally from the recognition of our utilization of alternative minimum tax credit carryforwards, as well as errors related to temporary differences in the tax bases of certain assets and liabilities. As a result of these errors, we overstated the portion of the utilization of net operating loss carryforwards that relate to tax deductions associated with the exercise of stock options, which are accounted for as additional paid-in capital, with a corresponding overstatement of income tax expense from continuing operations in the amount of $6.3 million for the quarter ended December 31, 2007. We also overstated our tax expense related to discontinued operations by $892,000 for the quarter ended December 31, 2007.

50

We believe the correction of these errors is not material to the 2007 consolidated financial statements, and therefore we are restating our 2007 consolidated financial statements in this Annual Report on Form 10-K. The effects of this restatement on the results of operations for the three months ended December 31, 2007 are as follows (in thousands, except per share data):

	Three months ended December 31, 2007
	As previously reported			Adjustment		As restated
Income tax expense	$	(9,347	)	$	6,262	$	(3,085	)
Loss from continuing operations		(66,677	)		6,262		(60,415	)
Loss from discontinued operations, net of taxes		(8,439	)		60		(8,379	)
Gain on sale of discontinued operations, net of taxes		130,622			832		131,454
Net income	$	55,506		$	7,154	$	62,660
Net income per share—Basic and diluted
Loss from continuing operations	$	(2.00	)	$	0.18	$	(1.82	)
Loss from discontinued operations		(0.25	)		0.00		(0.25	)
Gain on sale of discontinued operations		3.92			0.03		3.95
Net income per share	$	1.67		$	0.21	$	1.88

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS No. 141(R)”). In SFAS No. 141(R), the FASB retained the fundamental requirements of SFAS No. 141 to account for all business combinations using the acquisition method and for an acquiring entity to be identified in all business combinations. However, the revised standard requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to immediately expense costs related to the acquisition. SFAS No. 141(R) is effective for annual periods beginning on or after December 15, 2008. The impact that SFAS No. 141(R) will have on our consolidated financial statements when effective will depend upon the nature, terms and size of the acquisitions completed after the effective date.

On January 1, 2008, we adopted the provisions of SFAS No. 157 which defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and accordingly, does not require any new fair value measurements. On February 12, 2008, the FASB issued Staff Position No. FAS 157-2, Effective Date of FASB Statement No. 157, which delayed the effective date of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities to fiscal years beginning after November 15, 2008. The adoption of SFAS No. 157 for financial assets and liabilities did not have a material impact on our financial position, cash flows, or results of operations. We are currently evaluating the remaining provisions of SFAS No. 157 to determine what effect its adoption on January 1, 2009 for nonfinancial assets and nonfinancial liabilities will have on our financial position, cash flows, and results of operations.

On October 10, 2008, the FASB issued Staff Position (“FSP”) No. 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active. FSP No. 157-3 clarifies the application of SFAS No. 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. FSP No. 157-3 became effective immediately, including prior periods for which financial statements have not been issued. Therefore, we adopted the provisions of FSP No. 157-3 in our consolidated financial statements for the year ended December 31, 2008. The adoption did not have a material impact on our financial position, cash flows or results of operations.

51

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to financial market risks, including changes in interest rates, foreign currency fluctuations, and changes in the market values of our investments.

Interest Rate Risk.     We invest our available cash in debt instruments of the U.S. Government and its agencies. By policy, we limit our credit exposure to any one issuer. We do not have any derivative instruments in our investment portfolio. We protect and preserve invested funds by limiting default, market and reinvestment risk. Investments in both fixed-rate and floating-rate interest earning instruments carry a degree of interest rate risk. Fixed-rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating-rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities which have declined in market value due to changes in interest rates. At December 31, 2008, our cash equivalent balances in money market funds were $36.3 million, our short-term investment balances were $141.6 million and our long-term investment balances were $13.9 million.

The following table provides information about our cash equivalent and marketable fixed-income securities, including principal cash flows for 2008 and the related weighted average interest rates. Amounts are presented in U.S. dollar equivalents, which is our reporting currency.

Principal amounts and weighted average interest rates by expected year of maturity in U.S. dollars as of December 31, 2008 are as follows (in thousands, except percentages):

	2009				2010 -2013				Thereafter				Total				Fair Value
U.S. government securities	$	140,435	2.02	%	$	—	0.0	%	$	—	0.0	%	$	140,435	2.02	%	$	141,592
Money market funds		36,303	0.98	%		—	0.0	%		—	0.0	%		36,303	0.98	%		36,303
Auction rate securities		—	0.0	%		—	0.0	%		40,430	3.92	%		40,430	3.92	%		13,916
Cash equivalents and marketable fixed-income securities	$	176,738			$	—			$	40,430			$	217,168			$	191,811

Foreign Currency Risk.     Our earnings and cash flows are subject to fluctuations due to changes in the exchange rates of the principal currency of foreign countries where we operate (Canada, countries in Europe, and India) versus the U.S. dollar. We are exposed to these exchange rate fluctuations as the financial results of our non-U.S. based subsidiaries are translated into U.S. dollars in consolidation. As exchange rates vary, those results, when translated, may vary from expectations and adversely impact our consolidated results. The cumulative translation effects for subsidiaries using functional currencies other than the U.S. dollar are included in accumulated other comprehensive income in stockholders’ equity. We do not currently use derivative instruments to manage our exposure to changes in foreign currency exchange rates as this exposure has had an immaterial impact on our past financial results.

Financial Market Risk.     We do not invest in financial instruments or their derivatives for trading or speculative purposes. Included within our investment portfolio at December 31, 2008 were auction rate securities (“ARS”) that we purchased for $33.4 million. These investments failed to trade at auctions due to insufficient bids from buyers. While we now earn a premium interest rate on $28.4 million of the ARS that failed to settle in the auction process, the investments cannot be quickly converted into cash and were considered illiquid as of December 31, 2008. We determined that the fair value of those ARS was $13.6 million at December 31, 2008, and we recorded an other-than- temporary impairment of $14.9 million related to a portion of the ARS, recorded as Loss on investments, net in the Consolidated Statement of Operations and Comprehensive Income (Loss) for the year ended December 31, 2008. If the ARS issuers are unable to successfully close future auctions and their credit ratings deteriorate, the fair value of those ARS may continue to decline and we may record further other-than-temporary impairment charges. In 2008, an issuer of one of our ARS terminated the ARS trust and issued us

52

preferred shares in the ARS issuer. We paid $7.0 million for those ARS that were replaced with preferred shares, and the fair value of those preferred shares at December 31, 2008 was $365,000, and we recorded an other-than- temporary impairment of $5.7 million and $944,000 related to those ARS for the years ended December 31, 2008 and 2007, respectively, and we now receive non-cumulative dividends on those preferred shares instead of interest payments. If the preferred share issuer continues to have its credit ratings deteriorate, the fair value of those preferred shares may continue to decline and we may record further other-than-temporary impairment charges. In 2008, an issuer of one of our ARS liquidated the trust collateral and replaced it with non-cumulative perpetual preferred shares in the ARS issuer, which has not paid a dividend, and we do not expect it to pay a dividend. We paid $5.0 million for that ARS, and the fair value at December 31, 2008 was zero ($0). The global financial markets experienced unusual and significant distress during 2008 and that distress is continuing and may continue to the end of 2009 and possibly longer, which may continue to impair our ability to liquidate those ARS.

Based on our ability to access our cash and short-term investments, our expected operating cash flows, and our other sources of cash, we do not anticipate that the lack of liquidity of these investments will affect our ability to operate our businesses in the ordinary course.

53

ITEM 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

INFOSPACE, Inc.	Page
Report of Independent Registered Public Accounting Firm	55
Consolidated Balance Sheets	56
Consolidated Statements of Operations and Comprehensive Income (Loss)	57
Consolidated Statements of Stockholders’ Equity	58
Consolidated Statements of Cash Flows	59
Notes to Consolidated Financial Statements	60

54

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

InfoSpace, Inc.

Bellevue, Washington

We have audited the accompanying consolidated balance sheets of InfoSpace, Inc. and subsidiaries (the “Company”) as of December 31, 2008 and 2007, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of InfoSpace, Inc. and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 2, 2009 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Seattle, Washington

March 2, 2009

55

INFOSPACE, INC.

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)

	December 31,
	2008			2007
				(As restated, see Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	49,936		$	498,326
Short-term investments, available-for-sale		141,592			39,019
Accounts receivable, net of allowance of $32 and $202		15,423			17,081
Notes and other receivables		1,349			7,104
Prepaid expenses and other current assets		1,767			1,902
Assets of discontinued operations		—			4,730
Total current assets		210,067			568,162
Property and equipment, net		18,078			10,945
Long-term investments, available-for-sale		13,916			37,472
Goodwill and other intangible assets, net		44,123			44,123
Other long-term assets		4,949			10,722
Total assets	$	291,133		$	671,424
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,518		$	5,148
Accrued expenses and other current liabilities		19,707			78,543
Special dividend payable		—			299,296
Liabilities of discontinued operations		1,109			21,753
Total current liabilities		27,334			404,740
Long-term liabilities		1,475			634
Total liabilities		28,809			405,374
Commitments and contingencies (Note 7)		—			—
Stockholders’ equity:
Common stock, par value $.0001—authorized, 900,000,000 shares; issued and outstanding, 34,796,010 and 34,321,954 shares		3			3
Additional paid-in capital		1,292,360			1,279,225
Accumulated deficit		(1,032,579	)		(1,013,880	)
Accumulated other comprehensive income		2,540			702
Total stockholders’ equity		262,324			266,050
Total liabilities and stockholders’ equity	$	291,133		$	671,424

See notes to consolidated financial statements.

56

INFOSPACE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(amounts in thousands, except per share data)

	Years ended December 31,
	2008			2007			2006
				(As restated, see Note 1)
Revenues	$	156,727		$	140,537		$	153,800
Operating expenses:
Content and distribution		75,969			61,765			62,346
Systems and network operations		11,537			9,800			11,494
Product development		9,931			9,921			6,814
Sales and marketing		24,261			29,259			15,935
General and administrative		24,079			105,083			34,507
Depreciation		7,335			5,542			5,044
Restructuring		17			9,590			62,316
Other, net		(1,897	)		(3,248	)		—
Total operating expenses		151,232			227,712			198,456
Operating income (loss)		5,495			(87,175	)		(44,656	)
Loss on investments, net		(28,520	)		(2,117	)		—
Other income, net		7,149			18,226			19,581
Loss from continuing operations before income tax benefit (expense)		(15,876	)		(71,066	)		(25,075	)
Income tax benefit (expense)		(598	)		(13,409	)		29,060
Income (loss) from continuing operations		(16,474	)		(84,475	)		3,985
Discontinued operations:
Loss from discontinued operations, net of taxes		(1,455	)		(25,246	)		(19,073	)
Gain (loss) on sale of discontinued operations, net of taxes		(770	)		131,454			—
Net income (loss)	$	(18,699	)	$	21,733		$	(15,088	)
Earnings (loss) per share—Basic:
Income (loss) from continuing operations	$	(0.48	)	$	(2.59	)	$	0.13
Loss from discontinued operations		(0.04	)		(0.77	)		(0.61	)
Gain (loss) on sale of discontinued operations		(0.02	)		4.03			—
Basic net income (loss) per share	$	(0.54	)	$	0.67		$	(0.48	)
Weighted average shares outstanding used in computing basic income (loss) per share		34,415			32,640			31,254
Earnings (loss) per share—Diluted:
Income (loss) from continuing operations	$	(0.48	)	$	(2.59	)	$	0.12
Loss from discontinued operations		(0.04	)		(0.77	)		(0.58	)
Gain (loss) on sale of discontinued operations		(0.02	)		4.03			—
Diluted net income (loss) per share	$	(0.54	)	$	0.67		$	(0.46	)
Weighted average shares outstanding used in computing diluted income (loss) per share		34,415			32,640			33,042
Other comprehensive income (loss):
Net income (loss)	$	(18,699	)	$	21,733		$	(15,088	)
Foreign currency translation adjustment		(47	)		168			456
Unrealized gain (loss) on investments, available-for-sale		1,109			(2,081	)		489
Reclassification adjustment for other-than-temporary losses on investments, available-for-sale, included in net loss		776			1,337			—
Cumulative tax effect on unrealized gain on investments, available-for-sale		—			—			(186	)
Comprehensive income (loss)	$	(16,861	)	$	21,157		$	(14,329	)

See notes to consolidated financial statements.

57

INFOSPACE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Years Ended December 31, 2008, 2007, and 2006

(in thousands)

	Common stock			Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive income			Total
	Shares	Amount
Balance, December 31, 2005	31,019	$	3	$	1,684,974		$	(1,020,525	)	$	519		$	664,971
Common stock issued for stock options	280		—		3,599			—			—			3,599
Common stock issued for employee stock purchase plan	94		—		1,833			—			—			1,833
Unrealized gain on available-for-sale investments	—		—		—			—			489			489
Excess tax benefits	—		—		4,563			—			(186	)		4,377
Foreign currency translation adjustment	—		—		—			—			456			456
Stock-based compensation	—		—		17,928			—			—			17,928
Net loss	—		—		—			(15,088	)		—			(15,088	)
Balance, December 31, 2006	31,393		3		1,712,897			(1,035,613	)		1,278			678,565
Common stock issued for stock options and restricted stock units	1,701		—		9,949			—			—			9,949
Common stock issued for employee stock purchase plan	77		—		1,382			—			—			1,382
Common stock issued for warrants	1,151		—		3,787			—			—			3,787
Unrealized loss on available-for-sale investments	—		—		—			—			(744	)		(744	)
Foreign currency translation adjustment	—		—		—			—			168			168
Excess tax benefits (As restated, see Note 1)	—		—		14,778			—			—			14,778
Stock-based compensation	—		—		50,283			—			—			50,283
Taxes paid on stock issued for equity awards	—		—		(6,238	)		—			—			(6,238	)
Common stock repurchased	—		—		(114	)		—			—			(114	)
Special dividends	—		—		(507,499	)		—			—			(507,499	)
Net income (As restated, see Note 1)	—		—		—			21,733			—			21,733
Balance, December 31, 2007 (As restated, see Note 1)	34,322		3		1,279,225			(1,013,880	)		702			266,050
Common stock issued for stock options and restricted stock units	420		—		16			—			—			16
Common stock issued for employee stock purchase plan	54		—		587			—			—			587
Unrealized gain on available-for-sale investments	—		—		—			—			1,885			1,885
Foreign currency translation adjustment	—		—		—			—			(47	)		(47	)
Tax effect of equity compensation	—		—		(1,029	)		—			—			(1,029	)
Stock-based compensation	—		—		15,143			—			—			15,143
Taxes paid on stock issued for equity awards	—		—		(1,582	)		—			—			(1,582	)
Net loss	—		—		—			(18,699	)		—			(18,699	)
Balance, December 31, 2008	34,796	$	3	$	1,292,360		$	(1,032,579	)	$	2,540		$	262,324

See notes to consolidated financial statements.

58

INFOSPACE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Years ended December 31,
	2008			2007			2006
				(As restated, see Note 1)
Operating Activities:
Net income (loss)	$	(18,699	)	$	21,733		$	(15,088	)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Loss from discontinued operations		1,455			25,246			19,073
Loss (gain) on sale of discontinued operations		770			(131,454	)		—
Loss on investments, net		28,520			2,182			—
Stock-based compensation		14,304			34,058			11,269
Depreciation		7,335			5,542			5,044
Deferred income taxes		(2,667	)		12,816			(24,870	)
Net gain on sale of assets		(1,897	)		(3,409	)		(150	)
Restructuring		17			9,590			62,316
Excess tax benefits from stock-based award activity		—			(23,700	)		—
Other		540			(196	)		(28	)
Cash provided (used) by changes in operating assets and liabilities:
Accounts receivable		1,643			(3,657	)		4,598
Notes and other receivables		5,228			(3,941	)		(517	)
Prepaid expenses and other current assets		135			1,499			2,704
Other long-term assets		1,784			(1,862	)		(402	)
Accounts payable		614			(5,445	)		3,184
Accrued expenses and other current and long-term liabilities		(59,264	)		33,722			(6,336	)
Net cash provided (used) by operating activities		(20,182	)		(27,276	)		60,797
Investing Activities:
Purchases of property and equipment		(12,277	)		(3,684	)		(7,355	)
Other long-term assets		(199	)		—			—
Proceeds from sale of assets		2,550			2,838			—
Loan to equity investee		—			(2,000	)		—
Proceeds from sales and maturities of investments		43,980			294,381			298,288
Purchases of investments		(145,338	)		(135,354	)		(313,883	)
Net cash provided (used) by investing activities		(111,284	)		156,181			(22,950	)
Financing Activities:
Special dividend paid		(299,296	)		(208,203	)		—
Proceeds from stock option and warrant exercises		16			13,736			3,599
Proceeds from issuance of stock through employee stock purchase plan		587			1,382			1,833
Repayment of capital lease obligation		(233	)		—			—
Excess tax benefits from stock-based award activity		—			23,700			—
Net cash provided (used) by financing activities		(298,926	)		(169,385	)		5,432
Discontinued operations:
Operating activities		(17,998	)		33,820			(17,569	)
Investing activities		—			342,599			(15,003	)
Net cash provided (used) by discontinued operations		(17,998	)		376,419			(32,572	)
Net increase (decrease) in cash and cash equivalents		(448,390	)		335,939			10,707
Cash and cash equivalents, beginning of period		498,326			162,387			151,680
Cash and cash equivalents, end of period	$	49,936		$	498,326		$	162,387
Supplemental disclosure of non-cash financing activities:
Special dividend payable at year end	$	—		$	299,296		$	—
Purchases of assets under capital leases	$	1,601		$	—		$	—
Cash paid for:
Income taxes for continuing operations	$	5,117		$	—		$	185

See notes to consolidated financial statements.

59

INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2008, 2007, and 2006

Note 1:     The Company and Basis of Presentation

Description of the business:     InfoSpace, Inc. (the “Company” or “InfoSpace”) uses its technology, including metasearch, to power its branded Web sites and provide private-label online search services to its distribution partners.

Principles of consolidation:     The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Basis of presentation:     On October 31, 2007, the Company completed the sale of its directory business to Idearc Inc., for $225.0 million in cash. On December 28, 2007, the Company completed the sale of its mobile business to Motricity, Inc., for $135.0 million in cash. The operating results of the directory and mobile businesses have been presented as discontinued operations for all years presented.

Restatement:     Subsequent to the issuance of the Company’s consolidated financial statements for the year ended December 31, 2007, the Company identified certain errors affecting the Company’s income tax provision for the year ended December 31, 2007 related to the determination of the amount of net operating loss carryforwards utilized in 2007 to offset taxable income for 2007. These errors resulted principally from the recognition of its utilization of alternative minimum tax credit carryforwards, as well as errors related to temporary differences in the tax bases of certain assets and liabilities. As a result of these errors, the Company overstated the portion of the utilization of net operating loss carryforwards that relate to tax deductions associated with the exercise of stock options, which are accounted for as additional paid-in capital, with a corresponding overstatement of its income tax expense from continuing operations in the amount of $6.3 million for the year ended December 31, 2007. The Company also overstated its tax expense related to discontinued operations by $892,000 for the year ended December 31, 2007. These errors also resulted in an overstatement of additional paid-in capital of $7.0 million and an overstatement of accrued expenses and other current liabilities of $160,000 as of December 31, 2007.

The Company believes that the correction of these errors is not material to the 2007 consolidated financial statements, and therefore, the Company is restating its 2007 consolidated financial statements in this Annual Report on Form 10-K.

The effects of this restatement on the Consolidated Balance Sheet as of December 31, 2007 are as follows (in thousands):

	As previously reported			Adjustment			As restated
Accrued expenses and other current liabilities	$	78,703		$	(160	)	$	78,543
Total current liabilities	$	404,900		$	(160	)	$	404,740
Total liabilities	$	405,534		$	(160	)	$	405,374
Additional paid-in capital	$	1,286,219		$	(6,994	)	$	1,279,225
Accumulated deficit	$	(1,021,034	)	$	7,154		$	(1,013,880	)
Total stockholders’ equity	$	265,890		$	160		$	266,050

60

INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

The effects of this restatement on the results of operations for the year ended December 31, 2007 are as follows (in thousands, except per share data):

	As previously reported			Adjustment		As restated
Income tax expense	$	(19,671	)	$	6,262	$	(13,409	)
Loss from continuing operations		(90,737	)		6,262		(84,475	)
Loss from discontinued operations, net of taxes		(25,306	)		60		(25,246	)
Gain on sale of discontinued operations, net of taxes		130,622			832		131,454
Net income	$	14,579		$	7,154	$	21,733
Net income per share – Basic and diluted
Loss from continuing operations	$	(2.78	)	$	0.19	$	(2.59	)
Loss from discontinued operations		(0.77	)		0.00		(0.77	)
Gain on sale of discontinued operations		4.00			0.03		4.03
Net income per share	$	0.45		$	0.22	$	0.67

The effects of this restatement on the Consolidated Statements of Stockholders’ Equity for the year ended December 31, 2007 are as follows (in thousands):

	As previously reported			Adjustment			As restated
Additional paid-in capital:
Excess tax benefits	$	21,772		$	(6,994	)	$	14,778
Balance, Additional paid-in capital	$	1,286,219		$	(6,994	)	$	1,279,225
Accumulated deficit:
Net income	$	14,579		$	7,154		$	21,733
Balance, Accumulated deficit	$	(1,021,034	)	$	7,154		$	(1,013,880	)
Balance, Stockholders’ equity	$	265,890		$	160		$	266,050

61

INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

The effects of this restatement on cash flows for the year ended December 31, 2007 are as follows (in thousands):

	As previously reported			Adjustment			As restated
Operating activities:
Net income	$	14,579		$	7,154		$	21,733
Loss from discontinued operations	$	25,306		$	(60	)	$	25,246
Gain on sale of discontinued operations	$	(130,622	)	$	(832	)	$	(131,454	)
Deferred income taxes	$	19,810		$	(6,994	)	$	12,816
Excess tax benefits from stock-based award activity	$	(30,694	)	$	6,994		$	(23,700	)
Accrued expenses and other current and long-term liabilities	$	33,882		$	(160	)	$	33,722
Net cash used by operating activities	$	(33,378	)	$	6,102		$	(27,276	)
Financing activities:
Excess tax benefits from stock-based award activity	$	30,694		$	(6,994	)	$	23,700
Net cash used by financing activities	$	(162,391	)	$	(6,994	)	$	(169,385	)
Discontinued operations:
Operating activities	$	33,760		$	60		$	33,820
Investing activities	$	341,767		$	832		$	342,599
Net cash provided by discontinued operations	$	375,527		$	892		$	376,419
Net increase in cash and cash equivalents	$	335,939		$	—		$	335,939

Business combinations:    Business combinations accounted for under the purchase method of accounting include the results of operations of the acquired business from the date of acquisition. Net assets of the business acquired are recorded at their fair value at the date of acquisition.

Segments:    The Company’s chief executive officer, who is its chief operating decision maker, reviews financial information presented on a consolidated basis accompanied by revenue information disaggregated by geographic region and other measures for purposes of allocating resources and evaluating financial performance. The Company’s operations are not organized into components below the consolidated unit level, and operating results are not reported to the chief executive officer for components below the consolidated unit level. Accordingly, the Company’s management considers InfoSpace to be in a single reporting segment and a single operating unit structure.

Note 2:    Summary of Significant Accounting Policies

Cash equivalents:    The Company considers all highly liquid debt instruments with an original maturity of ninety days or less at date of acquisition to be Cash equivalents, which are carried at fair value.

Short-term and long-term investments:    The Company principally invests its available cash in investment-grade debt instruments of corporate issuers and in debt instruments of the U.S. Government and its agencies. All debt instruments with original maturities greater than ninety days up to one year from the balance sheet date are considered Short-term investments. Other investments maturing after one year from the balance sheet date are generally considered Long-term investments. The Company accounts for investments in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 115, Accounting for Certain Investments in Debt and Equity Securities, the Financial Accounting Standards Board (“FASB”) Staff Position (“FSP”) FAS 115-1/124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments and

62

INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

the SEC’s SAB Topic 5M, Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities. FSP FAS 115-1/124-1 and SAB Topic 5M provide guidance for determining when certain investments are other-than-temporarily impaired. The Company periodically evaluates whether the declines in fair value of its available-for-sale investments are other than temporary. As of December 31, 2008 and 2007, the Company’s Short-term and Long-term investments are classified as available-for-sale and are reported at their fair value, with unrealized gains and temporary impairments reported in Other comprehensive income (loss), and other-than-temporary impairments reported as Gains (losses) on investments in the Consolidated Statement of Operations.

Property and equipment:    Property and equipment are stated at cost. Depreciation is computed under the straight-line method over the following estimated useful lives:

Computer equipment and software	3 years
Data center servers	3 years
Internally developed software	15 months – 3 years
Office equipment	7 years
Office furniture	7 years
Leasehold improvements	Shorter of lease term or economic life

The Company has capitalized certain internal use software development costs in accordance with Statement of Position 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. Costs capitalized primarily consist of employee salaries and benefits allocated on a project or product basis. The Company capitalized $1.7 million, $1.5 million, and $1.1 million of internal-use software costs in the years ended December 31, 2008, 2007, and 2006, respectively.

Valuation of goodwill and intangible assets:    In accordance with SFAS No. 142, Goodwill and Intangible Assets, the Company evaluates Goodwill and Other intangible assets at least annually to determine whether there has been any impairment of the value of these assets and evaluates impairment whenever events or changes in circumstances, including material changes in the fair value of the Company’s outstanding common stock, indicate that the carrying amount of the Company’s assets might not be recoverable. The Company also accounts for definite-lived intangible assets in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

There has been no change in the Company’s Goodwill during the period from January 1, 2007 to December 31, 2008, and the Company held $43.9 million of Goodwill on its balance sheet as of December 31, 2008 and 2007.

Other intangible assets consisted of the following (in thousands):

	December 31, 2008 and 2007
	Gross carrying amount		Accumulated amortization			Other intangible assets, net
Definite-lived intangible assets:
Core technology	$	800	$	(800	)	$	—
Other		6,667		(6,667	)		—
Total definite-lived intangible assets		7,467		(7,467	)		—
Indefinite-lived intangible assets		183		—			183
Total	$	7,650	$	(7,467	)	$	183

63

INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

Assuming the Company does not acquire businesses or intangible assets in 2009, no amortization of definite-lived intangible assets is expected in 2009.

Impairment and Allocation Analyses:    In the years ended December 31, 2008, 2007, and 2006, the Company conducted its annual impairment analyses for goodwill and indefinite-lived intangible assets as of November 30, 2008, 2007, and 2006 and determined that the carrying value of its goodwill and indefinite-lived intangible assets, other than in connection with its 2006 restructuring, was not impaired. Before 2008, the annual impairment analyses were based on a valuation of the Company’s reporting units using a combination of the Company’s quoted stock price and projections of future discounted cash flows for each reporting unit. Upon the sale of the mobile business in 2007, the Company determined that it no longer operates separate reporting units. Therefore, the methodology used for the Company’s 2008 analysis compared the balance of its stockholders’ equity to the fair value of its outstanding common stock based on the Company’s quoted stock price.

In the year ended December 31, 2007, related to the sale of its directory business, the Company allocated $60.5 million of goodwill to discontinued operations from its former Online segment, based on an analysis using a combination of the revenues, direct contribution to profit and cash flows of the directory and search businesses, and the Company’s quoted stock price.

In the year ended December 31, 2006, as part of its restructuring, the Company evaluated its intangible assets and recorded an impairment charge of $12.6 million related to certain definite-lived intangible assets acquired in acquisitions and, accordingly, the Company determined that an impairment occurred and, in addition, as part of the restructuring, Goodwill was evaluated and an impairment charge of $31.9 million was recorded. These impairments are recorded in Restructuring.

Other investments:    The Company has invested in equity investments of privately-held companies for business and strategic purposes. Investments in companies whose securities are not publicly traded are recorded at cost. Realized gains are recorded based on the identified specific cost of the investment sold. Warrants held by the Company to purchase equity securities are included in the Consolidated Balance Sheets at their fair value with changes in fair value recorded as Gains or losses on investments in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company does not exercise significant influence over the operating or financial policies of any of the non-public companies in which it has invested and therefore accounts for such investments under the cost method and records the investment in Other long-term assets. The Company accounts for these investments in equity instruments in accordance with FSP FAS 115-1/124-1 and SAB Topic 5M which provide guidance on determining when an investment is other-than-temporarily impaired. The Company periodically evaluates whether the declines in fair value of its equity investments are other-than-temporary, and reports other-than-temporary impairments as Losses on investments, net in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Revenues:    The Company generates revenues from its search services. Revenues are generated when an end user of its services clicks on a paid search link displayed on one of the Company’s owned and operated Web sites or through a distribution partner’s Web property, on which the Company provides private-label online search products and services.

Search revenue is recorded on a gross basis in accordance with Emerging Issues Task Force Issue 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent. The Company is the primary obligor in the revenue-generating relationships with its search engine customers; it separately negotiates each revenue or unit pricing contract independent of any revenue sharing arrangements and assumes the credit risk for amounts invoiced to such customers. Revenues are recognized in the period in which a paid search occurs and are based

64

INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

on the amounts earned by and remitted to the Company. The Company, through its meta-search technology, determines the paid search results, content and information directed to its owned and operated Web sites and its distribution partners’ Web properties. The Company earns revenue from its search engine customers by providing paid search results generated from its distribution partners’ Web properties based on separately negotiated and agreed-upon terms with each distribution partner.

Content and distribution expenses:    Content and distribution expenses consist principally of costs related to revenue sharing arrangements with distribution partners in connection with the search services for Web properties of the Company’s distribution partners and other content or data licenses.

System and network operation expenses:    System and network operation expenses are costs associated with the delivery, maintenance and support of the Company’s products, services and infrastructure and principally consists of personnel costs, which include salaries, benefits and other employee related costs, stock-based compensation, and temporary help and contractors to augment staffing needs, communication costs, such as high-speed Internet access and hosting, equipment maintenance and repair, and professional service fees.

Product development expenses:    Product development expenses consist principally of personnel costs, which include salaries, benefits and other employee related costs, stock-based compensation, and temporary help and contractors to augment staffing needs, for research, development, support and ongoing enhancements of the Company’s products and services.

Sales and marketing expenses:    Sales and marketing expenses consist principally of personnel costs, which include salaries, benefits and other employee related costs, stock-based compensation, and temporary help and contractors to augment staffing needs, and marketing expenses associated with our owned and operated Web sites, consisting of agency fees, brand promotion expense, market research expense and online direct marketing expense associated with traffic acquisition. Costs for advertising are recorded as expense when the advertisement appears or electronic impressions are recorded. Advertising expense totaled $11.4 million, $4.3 million, and $4.1 million for the years ended December 31, 2008, 2007, and 2006, respectively.

General and administrative expenses:    General and administrative expenses consist principally of personnel costs, stock-based compensation, professional service fees, which include legal, audit, and Securities and Exchange Commission (“SEC”) and Sarbanes-Oxley Act compliance fees, occupancy and general office expenses, and general business development and management expenses.

Stock-based compensation:    The Company measures and recognizes its compensation expense for all share-based payment awards made to employees and directors including stock option grants and purchases of stock made pursuant to the Company’s 1998 Employee Stock Purchase Plan (the “ESPP”) based on estimated fair values in accordance with SFAS No. 123(R), Share-Based Payment. Expense is recognized on a straight-line basis over the requisite vesting period for each separately vesting portion of the award.

SFAS No. 123(R) requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes-Merton option-pricing model. The value of the award’s portion that is ultimately expected to vest is recognized as expense over the requisite service periods in the accompanying Consolidated Financial Statements for the years ended December 31, 2008, 2007, and 2006.

65

INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

Employee Benefit Plan:    The Company has a 401(k) savings plan covering its U.S. based employees. Eligible employees may contribute through payroll deductions. The Company may match the employees’ 401(k) contributions at the discretion of the Company’s Board of Directors. During 2008, 2007, and 2006, the Company’s Board of Directors elected to match a portion of the 401(k) contributions made by employees of the Company. The amount contributed by the Company is equal to a maximum of 50% of employee contributions up to a maximum of 3% of an employee’s salary. For the years ended December 31, 2008, 2007, and 2006, the Company contributed $327,000, $315,000, and $420,000, respectively, for employees of continuing operations.

Restructuring charges:    Restructuring charges reflect actual and estimated costs associated with the reductions in workforce and costs associated with the closures of certain Company facilities. In 2007, the Company sold its directory and mobile service businesses and, as a result, committed to a plan to make operational changes to its business, which included a reduction in workforce and, as part of the workforce reduction, consolidation of facilities. In 2006, as a result of being informed by one of its carrier partners that it intended to develop direct relationships for mobile ringtone content with the major record labels beginning in 2007, the Company committed to a plan to make operational changes, which included a reduction in workforce and, as part of the workforce reduction, consolidation of facilities. Charges associated with these restructuring plans are accounted for in accordance with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Changing business conditions may affect the assumptions related to the timing and extent of restructuring activities. The Company will review the status of these activities on a quarterly basis and, if appropriate, record changes based on updated estimates.

Other, net:    Other, net consists of gains or charges that are not directly associated with other revenues or operating expense classifications. Other, net during the years ended December 31, 2008 and 2007 of $1.9 million and $3.2 million, respectively, primarily consisted of the gains on sales of non-core assets. There were no Other, net charges in the year ended December 31, 2006.

Other income, net:    Other income, net for the years ended December 31, 2008, 2007, and 2006, consists of the following (in thousands):

	Years ended December 31,
	2008			2007			2006
Interest income	$	7,315		$	18,194		$	19,681
Gain contingency resolution		1,124			—			—
Foreign currency exchange loss		(661	)		(129	)		(42	)
Gain (loss) on disposal of property and equipment		(629	)		161			49
Other items, net		—			—			(107	)
Other income, net	$	7,149		$	18,226		$	19,581

Income (loss) from discontinued operations and gain (loss) on sale of discontinued operations:    In 2007, the Company completed the sale of its directory and mobile businesses and has reflected the results of operations from these businesses as discontinued operations for all periods presented.

For the years ended December 31, 2008, 2007, and 2006, the Company recorded income from the operating results of its directory and mobile businesses. The Company recorded a gain on sale of Directory of $48,000, net of tax expense of $26,000, and $57.3 million, net of tax expense of $79.2 million in the years ended December 31, 2008 and 2007, respectively, and the Company recorded a loss on sale of Mobile of $818,000, net

66

INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

of tax benefit of $780,000, and a gain of $74.2 million, net of tax expense of $38.7 million, in the years ended December 31, 2008 and 2007, respectively. These amounts consist of the following (in thousands):

Directory	Years ended December 31,
	2008			2007			2006
Revenue from discontinued operations	$	—		$	28,882		$	33,103
Income from discontinued operations before taxes		204			11,349			14,748
Income tax expense		(76	)		(4,213	)		(5,191	)
Income from discontinued operations, net of taxes	$	128		$	7,136		$	9,557
Gain on sale of discontinued operations, net of taxes	$	48		$	57,272		$	—

Mobile	Years ended December 31,
	2008			2007			2006
Revenue from discontinued operations	$	127		$	103,488		$	184,834
Loss from discontinued operations before taxes		(2,098	)		(50,100	)		(43,299	)
Income tax benefit		515			17,718			14,669
Loss from discontinued operations, net of taxes	$	(1,583	)	$	(32,382	)	$	(28,630	)
Gain (loss) on sale of discontinued operations, net of taxes	$	(818	)	$	74,182		$	—

In 2007, the Company recorded employee expenses of $460,000 for the directory business and $11.6 million for the mobile business related to the cash distributions to shareholders associated with discontinued operations.

Assets and liabilities from discontinued operations at December 31, 2008 and 2007 for the mobile business consist of the following (in thousands), there were no assets or liabilities related to the directory business at December 31, 2008 and 2007:

Mobile	December 31, 2008		December 31, 2007
Accounts receivable	$	—	$	4,730
Assets of discontinued operations	$	—	$	4,730
Accounts payable		31		3,214
Accrued expenses and other current liabilities		1,078		18,539
Liabilities of discontinued operations	$	1,109	$	21,753

Net income (loss) per share:    Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted loss per share is computed using the weighted average number of common shares outstanding plus the number of potentially dilutive shares outstanding during the period. Potentially dilutive shares consist of the incremental common shares issuable upon the exercise of outstanding stock options and warrants using the treasury stock method. Potentially dilutive shares are excluded from the computation of earnings per share if their effect is antidilutive.

67

INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

The treasury stock method calculates the dilutive effect for stock options and warrants with an exercise price less than the average stock price during the period presented.

	Years ended December 31,
In thousands	2008	2007	2006
Weighted average common shares outstanding, basic	34,415	32,640	31,254
Dilutive stock options and warrants	—	—	1,788
Weighted average common shares outstanding, diluted	34,415	32,640	33,042
Antidilutive stock option, restricted stock unit, and warrant equivalents excluded from dilutive share calculation	930	3,034	932
Outstanding stock options and warrants with an exercise price more than the average price during the year not included in dilutive share calculation	4,865	5,283	6,323

Other Comprehensive Income:    Comprehensive income includes Net income (loss), plus items that are recorded directly to stockholders’ equity, including foreign currency translation adjustments and the net change in unrealized gains and losses on short-term and long-term investments. Included in the net change in unrealized gains and losses are realized gains or losses included in the determination of Net income (loss) in the period realized. Amounts reclassified out of Other comprehensive income into Net income (loss) were determined on the basis of specific identification. Components of Accumulated other comprehensive income included on the Consolidated Balance Sheets at December 31, 2008 and 2007 consist of the following (in thousands):

	December 31,
	2008		2007
Unrealized gain on foreign currency translation	$	1,544	$	1,591
Unrealized gain (loss) on available-for-sale investments, including tax of $186		996		(889	)
	$	2,540	$	702

Foreign currencies:    Foreign subsidiary financial statements are denominated in foreign currencies and are translated at the exchange rate on the balance sheet date. Translation adjustments resulting from this process are charged or credited to other comprehensive income. Revenue and expenses are translated at average rates of exchange prevailing during the period. Realized gains and losses on foreign currency transactions are included in Other income, net.

Concentration of credit risk:    Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, short-term and long-term investments and trade receivables. These instruments are generally unsecured and uninsured. The Company places its cash equivalents and investments with major financial institutions. Accounts receivable are typically unsecured and are derived from revenues earned from customers primarily located in the United States operating in a variety of industries and geographic areas. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses.

Revenue concentration:    The Company derives a significant portion of its revenues from a small number of customers. Revenues from the top two customers of the Company represented 95% or more of total revenues in each of the years ended December 31, 2008, 2007, and 2006, respectively. These customers each accounted for more than 10% of total revenues in the years ended December 31, 2008, 2007, and 2006. At December 31, 2008 and 2007, these two customers each accounted for more than 10% of the accounts receivable balance.

68

INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

As discussed further in “Note 1: The Company and Basis of Presentation,” upon the sale of the mobile business in 2007, the Company determined that it no longer operates separate reporting units. Geographic revenue information, as determined by the location of the customer, is presented below (in thousands):

	Years ended December 31,
	2008		2007		2006
United States	$	152,886	$	136,537	$	150,795
International		3,841		4,000		3,005
Total	$	156,727	$	140,537	$	153,800

Fair value of financial instruments:    Financial instruments consist primarily of Cash and cash equivalents, Investments, Notes and other receivables, Prepaid expenses and other assets, Accounts payable, Accrued expenses and other current liabilities, Deferred revenues and warrants in other entities. The carrying amount of financial instruments not recorded at fair value on the Consolidated Balance Sheets approximates the fair value of such instruments.

Derivative instruments:    The Company follows SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended and interpreted, which requires that all derivatives be recorded on the balance sheet at fair value. The Company accounts for all derivatives by recognizing the changes in their fair values as gains or losses on the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss).

Income taxes:    The Company accounts for income taxes under the asset and liability method, under which deferred tax assets, including net operating loss carryforwards, and liabilities are determined based on temporary differences between the book and tax basis of assets and liabilities. The Company evaluates the deferred tax assets for future realization and reduces them by a valuation allowance to the extent management of the Company believes that they more likely than not will not be realized. Management considers many factors when assessing the likelihood of future realization of the Company’s deferred tax assets, including recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, the carryforward periods available for tax reporting purposes, and other relevant factors. Due to the size of the net operating loss carryforwards, their expiration beginning in 2020, and the Company’s recent level of annualized profitability, management has determined that sufficient uncertainty exists regarding the realizability of the deferred tax assets and has provided a full valuation allowance. The Company will continue to evaluate the likelihood of the realization of the deferred tax assets. Significant judgment is required in making this assessment, and it is very difficult to predict when, if ever, the Company may conclude that any portion of the deferred tax assets are more likely than not realizable.

At December 31, 2008 and 2007, the Company evaluated the realizability of its remaining deferred tax assets. That evaluation considered, among other factors, the future revenue levels, trends in the industry and the current macroeconomic environment. Based on that evaluation, the Company determined the net deferred tax assets were not more likely than not realizable and provided a valuation allowance against its deferred tax assets. At December 31, 2008 and 2007, the Company provided valuation allowances of $321.7 million and $324.3 million, respectively, against its deferred tax assets related to net operating loss carryforwards and other temporary differences.

Lease accounting:    The Company leases office space and computer equipment used in its data centers. All leases are accounted for under the guidance provided by SFAS No. 13, Accounting for Leases. These leases are classified as either capital leases or operating leases, as appropriate. The amortization of assets under capital

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Years Ended December 31, 2008, 2007 and 2006

leases is included with depreciation expense. For the year ended December 31, 2008, $341,000 of amortization for assets acquired under capital leases was included in depreciation expense. For the years ended December 31, 2007 and 2006, the Company did not have any equipment leased under capital leases.

Use of estimates:    The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for impairment of goodwill and other intangible assets, useful lives of other intangible assets, purchase accounting, valuation of investments and other-than-temporary impairment of investments, revenue recognition, the estimated allowance for sales returns and doubtful accounts, restructuring-related liabilities, accrued contingencies, stock option valuation, and valuation allowance for deferred tax assets. Actual amounts may differ from estimates.

Note 3:    Balance Sheet Components

Short-term and long-term investments classified as available-for-sale at December 31, 2008 and 2007 consisted of the following, stated at fair value (in thousands):

	December 31,
	2008		2007
Corporate notes and bonds	$	—	$	18,109
U.S. Government securities		141,592		20,910
Short-term investments		141,592		39,019
Auction rate securities classified as long-term investments		13,916		37,472
Total investments available-for-sale	$	155,508	$	76,491

Maturity information was as follows for investments classified as available-for-sale at December 31, 2008 (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Within one year	$	140,410	$	1,182	$	—	$	141,592
Auction rate securities (greater than one year)		13,916		—		—		13,916
Total	$	154,326	$	1,182	$	—	$	155,508

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Years Ended December 31, 2008, 2007 and 2006

At December 31, 2007, there were gross unrealized gains of $65,000 and gross unrealized losses of $783,000.

	December 31,
	2008			2007
Property and equipment		(in thousands)
Computer equipment and data center	$	13,917		$	28,113
Purchased software		7,816			4,983
Internally developed software		5,632			3,615
Office equipment		2,212			2,265
Office furniture		1,041			2,684
Leasehold improvements and other		3,091			7,355
		33,709			49,015
Accumulated depreciation		(16,041	)		(38,664	)
		17,668			10,351
Capital projects in progress		410			594
	$	18,078		$	10,945

Included in computer equipment and data center was $1.6 million of assets acquired under capital lease. At December 31, 2008, the current portion of capital lease obligation was $593,000 and the non-current portion of capital lease obligation was $775,000.

	December 31,
	2008		2007
Accrued expenses and other current liabilities		(in thousands)
Accrued distribution partner obligations	$	11,544	$	14,132
Salaries and related expenses		2,599		4,247
Customer deposits		1,537		4,421
Accrued legal and other consulting expenses		1,360		3,713
Accrued rent		1,138		803
Other		932		6,234
Capital lease obligation		593		—
Accrued restructuring		4		7,628
Accrued payments to employees related to cash distribution made to shareholders		—		37,365
	$	19,707	$	78,543

	December 31,
	2008		2007
Long-term liabilities		(in thousands)
Unrecognized tax benefit	$	634	$	634
Capital lease obligation		775		—
Deferred revenue		66		—
	$	1,475	$	634

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Years Ended December 31, 2008, 2007 and 2006

Note 4:    Fair Value Measurements

On January 1, 2008, the Company adopted SFAS No. 157, Fair Value Measurements, issued by the FASB. SFAS No. 157 defines fair value, establishes a framework for measuring fair value for the purposes of GAAP, and expands required disclosures about fair value measurements. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy of the Company’s financial assets carried at fair value and measured on a recurring basis is as follows (in thousands):

			Fair value measurements at the reporting date using
	December 31, 2008		Quoted prices in active markets using identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Cash equivalents	$	36,501	$	36,501	$	—	$	—
Available-for-sale securities		155,143		141,592		—		13,551
Equity investment		—		—		—		—
Warrants		—		—		—		—
Preferred shares		365		—		—		365
	$	192,009	$	178,093	$	—	$	13,916

The Company’s available-for-sale securities include $13.6 million of auction rate securities (“ARS”), which are classified as long-term, in the Level 3 category within the input hierarchy, because there are significant unobservable inputs associated with those investments. The Company’s ARS are floating rate securities with either long-term maturities or no maturity date, which are marketed by financial institutions with auction reset dates primarily at 28-day intervals to provide short-term liquidity and pay interest rates at 2% above the London Interbank Offered Rate (“LIBOR”). Beginning in August 2007, auctions for the ARS that the Company held at December 31, 2008 began to fail due to insufficient bids from buyers which resulted in higher interest rates being earned on those securities. The Company recognized $24.3 million and $2.2 million in Loss on Investments, net during the years ended December 31, 2008 and 2007, respectively.

The Company owns two types of ARS. The first type of ARS is collateralized by investment-grade corporate debt and prime-rated mortgage-backed debt, has a long-term maturity date, and is insured in the event of default by monoline insurance companies. The Company paid $21.4 million for its holdings at December 31, 2008 in this type of ARS, and determined the fair values by using discounted cash flow models for both the ARS trust payments and the monoline insurer payments, weighted by the probabilities of trust default and the fair value of the collateral. Those models relied upon certain unobservable inputs including management’s estimate of the holding periods, ranging from 6 to 28 years for the ARS trusts and from 16 to 42 years for the monoline insurers, the annual discount rates applied to future cash flows, which management primarily based on the historical credit default swap rates for comparable ARS trust entities and monoline insurance companies, ranging from 4% to 36% in excess of LIBOR for the ARS trusts and from 16% to 49% in excess of LIBOR for the monoline insurers, and management’s estimate of the probabilities of ARS trust default, ranging from 0% to 50%.

The second type of ARS has no maturity date and, in the event of default or liquidation of the collateral by the ARS issuer, the Company or ARS trust is entitled to receive non-convertible preferred shares in the ARS issuer; ARS of that type are also known as auction rate preferred securities (“ARPS”). The Company originally paid $12.0 million for the ARS that it held at December 31, 2008. In 2008, an issuer of one of the Company’s

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Years Ended December 31, 2008, 2007 and 2006

ARPS liquidated the collateral and replaced it with non-cumulative perpetual preferred shares in the ARPS issuer. The Company paid $5.0 million for that ARPS, and the fair value at December 31, 2008 was zero ($0). The Company determined the fair value of that ARPS at December 31, 2008 by using a discounted cash flow model for the preferred dividend payments, weighted by the estimated probability of dividend payments being declared and paid. The model relied upon certain unobservable inputs including management’s estimate of the holding period, which was 40 years, the annual discount rates applied to future cash flows, which management primarily based on the historical credit default swap rates for the ARPS issuers, ranging from 49% to 82% in excess of LIBOR, and management’s estimate of the probability of dividends being declared and paid, which was 0%. No dividend has been declared or paid on that ARPS and the Company does not expect a dividend to be declared or paid in the future. In 2008, an issuer of certain of the Company’s ARPS terminated the ARPS trusts and issued the Company non-cumulative perpetual preferred shares in the ARPS issuer. The Company paid $7.0 million for those ARPS, and the fair value of the preferred shares at December 31, 2008 was $365,000. The Company determined the fair values of those preferred shares at December 31, 2008 by using discounted cash flow models for the preferred dividend payments, weighted by the estimated probabilities of dividend payments being declared and paid. The models relied upon certain unobservable inputs including management’s estimate of the holding periods, which were 40 years, the annual discount rates applied to future cash flows, which management primarily based on the historical credit default swap rates for the ARPS issuer, ranging from 22% to 47% in excess of LIBOR, and management’s estimate of the probabilities of dividends being declared and paid, ranging from 0% to 50%. Dividends have been declared and paid on those preferred shares subsequent to December 31, 2008. For the remaining ARPS, for which the Company paid $7.0 million, there was a single issuer, and the Company determined their fair values of an aggregate $1.8 million at December 31, 2008 by using discounted cash flow models for the ARPS trust payments, weighted by the management’s estimated probability of trust default. The models relied upon certain unobservable inputs including management’s estimate of the holding periods, which were 40 years, the annual discount rate applied to future cash flows, which was primarily based on the historical credit default swap rates for the ARPS issuer, ranging from 11% to 24% in excess of LIBOR, and management’s estimate of the probabilities of trust default, which was 0%.

While the Company receives regular interest payments for all but one of the ARS that it holds, the Company does not expect to be able to receive the principal amounts until one or more of the following events occur: future auctions of those ARS are successful, the Company sells those securities in a secondary market which is currently not active, or the issuers redeem those ARS.

Changes in the fair values of financial assets measured on a recurring basis by using significant Level 3 inputs in the year ended December 31, 2008 are as follows (in thousands):

	Financial assets using significant Level 3 inputs for determining fair value Year ended December 31, 2008
	ARS			ARPS			Total ARS and ARPS			Preferred shares		Equity Investment			Warrants			Total
Balance at January 1, 2008	$	20,905		$	16,567		$	37,472		$	—	$	2,000		$	188		$	39,660
Other-than-temporary impairment		(9,689	)		(14,643	)		(24,332	)		—		(2,000	)		(188	)		(26,520	)
Temporary impairment		(1,279	)		—			(1,279	)		—		—			—			(1,279	)
Temporary impairment reclassified to other-than-temporary		1,804			251			2,055			—		—			—			2,055
Replacement of ARPS with preferred shares		—			(365	)		(365	)		365		—			—			—
Balance at December 31, 2008	$	11,741		$	1,810		$	13,551		$	365	$	—		$	—		$	13,916

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Years Ended December 31, 2008, 2007 and 2006

In the year ended December 31, 2008, the Company recorded an other-than-temporary impairment of its available-for-sale investments in Loss on investments, net in the Consolidated Statement of Operations and Comprehensive Income (Loss) of $24.3 million, which included $776,000 of impairments previously classified as temporary. The Company recorded ARS investment impairments in Loss on investments, net of $2.2 million and zero ($0) in the years ended December 31, 2007 and 2006, respectively.

The Company reviews the impairments of its available-for-sale investments in accordance with the provisions of SFAS No. 115 and related guidance issued by the FASB and the SEC. The Company classifies the impairment of any individual ARS as either temporary or other-than-temporary. The differentiating factors between temporary and other-than-temporary impairments are primarily the length of the time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

As of December 31, 2007, the Company held warrants to purchase shares in a privately-held company that had a carrying value of $188,000. In the year ended December 31, 2008, the Company recorded a charge of $188,000 related to those warrants in Loss on investments, net in the accompanying Consolidated Statement of Operations and Comprehensive Income (Loss), reducing the carrying value of those warrants to zero ($0). The warrants are classified in Other long-term assets, in Level 3, because there are significant unobservable inputs associated with them. The Company considers the warrants to be derivatives, and follows SFAS No. 133 as amended and interpreted, which requires that all derivatives be carried at fair value. The Company accounts for all derivatives by recognizing the changes in their fair values as gains or losses on investments in its Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company uses fair value measurements on a recurring basis in the assessment of its equity investment in a privately-held company classified as Other long-term assets, in Level 3, because there are significant unobservable inputs associated with them. In the year ended December 31, 2008, the Company recorded an other-than-temporary impairment charge of $2.0 million, reducing the carrying value of its investment in that privately-held company to zero ($0). The Company assesses its investment in that privately-held company for impairment in accordance with FSP FAS 115-1/124-1 and the SEC’s SAB Topic 5M. The Company did not record any impairment charges for the investment in a privately-held company in the years ended December 30, 2007 and 2006.

In the years ended December 31, 2008, 2007 and 2006, the Company did not measure the fair value of any of its assets or liabilities other than cash equivalents, available-for-sale investments, warrants and investment in a privately-held company. The Company’s management considers the carrying values of accounts receivable, notes and other receivables, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities and assets and liabilities of discontinued operations to approximate fair values primarily due to their short-term nature.

Note 5:    Stockholders’ Equity

Stock Incentive Plans

The Company’s stock incentive plans generally provide employees, officers, directors, independent contractors and consultants of the Company an opportunity to purchase shares of stock pursuant to options which are not described in Section 422 of Section 422 of the Internal Revenue Code of 1986, as amended (nonqualified

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Years Ended December 31, 2008, 2007 and 2006

stock options). The plans also provide for the sale or bonus of stock to eligible individuals in connection with the performance of service for the Company. Finally, the plans authorize the grant of stock appreciation rights, either separately or in tandem with stock options, which entitle holders to cash compensation measured by appreciation in the value of the stock. The stock incentive plans are administered by the Compensation Committee, which is composed of non-employee directors. The Company issues new shares upon exercise of options and upon the vesting of restricted stock units (“RSUs”).

1996 Plan:    The Company primarily has one stock plan that was used for grants during 2008, 2007, and 2006. On December 5, 2006, the 1996 Plan was amended to permit grants of RSUs. RSUs granted under the 1996 Plan in 2008 and 2007 typically are scheduled to vest over three years or less with a one-year cliff and ratably thereafter on a semi-annual basis. RSUs granted in 2006 vested over two years with 50% vesting at the end of the first year and 50% vesting at the end of the two-year period. Options granted in 2008, 2007, and 2006 under the Restated 1996 Flexible Stock Incentive Program (the “1996 Plan”) vest over a period of up to four years, with either 100%, 50%, 33 ¹/3%, or 25% vesting one year from the date of grant and ratably thereafter on a semi-annual basis, and expire seven years from the date of grant. Options granted prior to 2006 under the 1996 Plan typically vest over four years, either 25% one year from the date of grant and ratably thereafter on a monthly basis or 25% one year from the date of grant and ratably thereafter on a semi-annual basis, and expire seven or ten years from the date of grant. Shares underlying options available under the 1996 Plan increase annually on the first day of January by an amount equal to the lesser of (A) five percent of the Company’s outstanding shares at the end of the Company’s preceding fiscal year, or (B) a lesser amount determined by the Board of Directors. The 1996 Plan limits the number of shares of common stock that may be granted to any one individual pursuant to stock options in any fiscal year of the Company to 800,000 shares, plus an additional 800,000 shares in connection with his or her initial employment with the Company, which grant shall not count against the limit. If an option is surrendered or for any other reason ceases to be exercisable in whole or in part, the shares which were subject to the option but on which the option has not been exercised shall continue to be available under the 1996 Plan.

2001 Plan:    In February 2001, the Company implemented the 2001 Nonstatutory Stock Option Plan (the “2001 Plan”), under which nonqualified stock options to purchase common stock or shares of restricted stock may be granted to employees. Under the 2001 Plan, 2.5 million shares of common stock are authorized for grant of options or issuance of restricted stock. Options granted in 2006 under the 2001 Plan expire seven years from the date of the grant and vest over three years, with 33% vesting one year from the date of grant and ratably thereafter on a semi-annual basis. Options granted prior to 2006 under the 2001 Plan expire ten years from the date of the grant and vest over two years, with 50% vesting ratably on a monthly basis for the first 24 months and the remaining 50% balance vesting at the end of the two-year period.

Plans assumed through acquisition:    In addition to the plans described above, the Company has five option plans assumed through acquisitions. Options granted under these plans typically vest over a four-year period, 25% one year from the date of grant and ratably thereafter on a quarterly basis and expire six years from the date of grant.

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Years Ended December 31, 2008, 2007 and 2006

A summary of the general terms of options to purchase common stock and RSUs previously granted under these plans, including options outstanding and available for grant at December 31, 2008, is as follows:

	1996 Plan	2001 Plan	Switchboard Plan	Other Plans
Requisite service period in years	4 or less	3 or less	4	4
Life in years	7 or 10	7 or 10	6	6 or 10
Options and RSUs outstanding at December 31, 2008	5,216,443	199,899	33,150	451
Options and RSUs available for grant at December 31, 2008	2,960,524	1,588,739	423,801	—

Options:     Activity and pricing information regarding all options, excluding the InfoSpace, Inc. and Saraide Inc. 2000 Stock Plan (the “Tandem Plan”), are summarized as follows:

	Options		Weighted average exercise price
Outstanding December 31, 2005	8,034,075		$	29.33
Granted	3,536,650			24.06
Cancelled	(2,223,243	)		29.66
Exercised	(279,664	)		12.90
Outstanding December 31, 2006	9,067,818			27.70
Granted	100,500			23.98
Cancelled	(2,135,982	)		30.89
Exercised	(608,961	)		16.33
Outstanding December 31, 2007	6,423,375			27.66
Granted	1,170,000			10.36
Cancelled	(3,403,465	)		32.50
Expired	(9,107	)		18.43
Exercised	(3,365	)		4.67
Outstanding December 31, 2008	4,177,438		$	19.02
Options exercisable, December 31, 2008	3,069,055		$	21.97
Options exercisable and expected to vest after December 31, 2008*	3,988,391		$	19.39

* Options expected to vest reflect an estimated forfeiture rate.

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Years Ended December 31, 2008, 2007 and 2006

All grants in 2008, 2007, and 2006 were made at an exercise price equal to the market price at the date of grant. Additional information regarding options outstanding for all plans, excluding the Tandem Plan, as of December 31, 2008, is as follows:

	Options outstanding				Options exercisable
Range of exercise prices	Number outstanding	Weighted average remaining contractual life (yrs.)	Weighted average exercise price		Number exercisable	Weighted average exercise price
$ 4.70 – 8.99	129,268	6.6	$	7.96	9,268	$	6.34
$ 9.00 – 9.99	762,500	4.5		9.24	600,000		9.20
$ 10.00 – 12.99	833,062	6.2		10.74	57,562		10.21
$ 13.00 – 14.99	680,279	1.5		14.78	680,279		14.78
$ 15.00 – 23.99	144,958	4.2		21.83	110,712		21.77
$ 24.00 – 24.99	1,090,784	3.5		24.34	1,077,272		24.33
$ 25.00 – 33.99	163,031	3.7		28.52	160,406		28.52
$ 34.00 – 585.63	373,556	2.3		48.20	373,556		48.20
Total	4,177,438	3.9	$	19.02	3,069,055	$	21.97

Restricted Stock Units:     Activity and weighted average grant date fair value information regarding all restricted stock unit grants are summarized as follows:

	Restricted stock		Weighted average grant date fair value
Outstanding December 31, 2005	—		$	—
Granted	1,355,970			20.38
Forfeited	(600	)		20.38
Outstanding December 31, 2006	1,355,370			20.38
Granted	2,110,965			21.43
Forfeited	(1,057,311	)		20.91
Released	(1,708,525	)		21.09
Outstanding December 31, 2007	700,499			21.02
Granted	1,576,172			9.75
Forfeited	(406,282	)		15.37
Released	(597,884	)		15.02
Outstanding December 31, 2008	1,272,505		$	11.68
Expected to vest after December 31, 2008*	1,051,235		$	11.68

* RSUs expected to vest reflect an estimated forfeiture rate.

Tandem Plan:     On April 17, 2000, the Company initiated the Tandem Plan, a tandem plan under which incentive options and nonqualified stock options to purchase common stock may be granted to employees of Saraide, Inc. (“Saraide”), a subsidiary of the Company. Under the Tandem Plan, Saraide employees receiving the grant received an option to purchase Saraide stock or stock of the Company. At the time of exercise, the employee chooses the option to exercise the Saraide option or the InfoSpace option. Upon exercise of one option,

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Years Ended December 31, 2008, 2007 and 2006

rights in the option of the other company are cancelled. Under the Tandem Plan, options to purchase 1,000,000 shares of the Company’s common stock were reserved for grants. Options under the Tandem Plan expire ten years from the date of the grant. Options under this plan generally vest over four years, 25% one year from date of grant and ratably thereafter on a monthly basis. As of December 31, 2008, no shares of InfoSpace common stock remain available for grant of options under the Tandem Plan.

Activity and pricing information regarding the Tandem Plan is summarized as follows:

	Options		Weighted average exercise price
Outstanding December 31, 2005	1,267		$	454.38
Cancelled	(267	)		454.38
Outstanding December 31, 2006	1,000			454.38
Outstanding December 31, 2007	1,000			454.38
Cancelled	(1,000	)		454.38
Outstanding and exercisable at December 31, 2008	—		$	—

Warrants:     The Company issued warrants in connection with the Company’s 1998 private placement offerings and agreements to provide white pages directory and classified information services. In May 2007, 1,150,761 shares were issued due to the exercise of warrants. Of these shares, 749,720 shares were issued for an aggregate price of $3.8 million, an average exercise price of $5.05 per share and 401,041 shares were issued pursuant to the net exercise provision of 641,678 warrants. For the years ended December 31, 2008 and 2006, no warrants were exercised and the remaining warrants expired in 2008.

Other Plans:

1998 Employee Stock Purchase Plan:     The Company adopted the ESPP in August 1998. The ESPP is intended to qualify under Section 423 of the Code and permits eligible employees of the Company and its subsidiaries to purchase common stock through payroll deductions of up to 15% of their compensation. Under the ESPP, no employee may purchase common stock worth more than $25,000 in any calendar year, valued as of the first day of each offering period. In addition, owners of 5% or more of the Company’s or one of its subsidiary’s common stock may not participate in the ESPP. An aggregate of 1,360,000 shares of common stock are authorized for issuance under the ESPP. The ESPP was implemented with six-month offering periods that begin on each February 1 and August 1. The price of common stock purchased under the ESPP is the lesser of 85% of the fair market value on the first day of an offering period and 85% of the fair market value on the last day of an offering period. The ESPP does not have a fixed expiration date, but may be terminated by the Company’s Board of Directors at any time. There were 54,311, 76,772, and 94,404 shares issued for the ESPP periods that ended in 2008, 2007, and 2006, respectively. During the year ended December 31, 2008, financing cash generated for the purchase of shares through the ESPP amounted to $437,000. The Company issues new shares upon purchase through the ESPP.

Stock Repurchase Plan:     On June 16, 2008, the Company’s Board of Directors authorized the repurchase of up to $100 million of the Company’s outstanding common stock over the succeeding twelve months. On June 8, 2007 and May 30, 2006, the Company’s Board of Directors approved a stock repurchase plan whereby the Company may purchase up to $100 million of its common stock in open-market transactions during the succeeding twelve month periods. Any repurchased shares will be retired and resume the status of authorized but unissued shares of common stock. Under the repurchase plan, during 2008, 2007, and 2006, the Company did not repurchase any shares.

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Years Ended December 31, 2008, 2007 and 2006

Dividends:

On May 2, 2007, the Company’s Board of Directors declared a special cash distribution by means of a dividend on the Company’s common stock of $6.30 per share. The special dividend was paid on May 28, 2007 with respect to all shares of common stock outstanding at the close of business on May 18, 2007. On May 18, 2007, there were 33.1 million shares outstanding and, based on those shares, the total amount of the cash distribution was $208.2 million.

On November 14, 2007, the Company’s Board of Directors declared a special cash distribution by means of a dividend on the Company’s common stock of $9.00 per share. The special dividend was paid on January 8, 2008 with respect to all shares of common stock outstanding at the close of business on December 10, 2007. On December 10, 2007, there were 33.3 million shares outstanding. Based on those shares, the total amount of the cash distribution was $299.3 million.

Additionally, on May 2, 2007, the Company’s Board of Directors approved a plan to compensate employees and directors that held in-the-money options to purchase shares of common stock and RSUs for the reduction in value of these awards due to any special cash distribution. The compensation was a combination of $18.9 million in cash and issuance of an additional 368,000 RSUs for employees of continuing operations and the amount was based on, among other factors, the average trading price of the Company’s stock before and after the ex-dividend date and the in-the-money amount for options to purchase shares of common stock. The vesting schedules for RSUs granted under this plan are the same as the existing awards for which they are granted.

Additionally, on November 14, 2007, the Company’s Board of Directors approved a plan to compensate employees and directors that held in-the-money options to purchase shares of common stock and RSUs for the reduction in value of these awards due to any special cash distribution. The compensation was a combination of cash and issuance of additional RSUs and the amount was based on, among other factors, the average trading price of the Company’s stock before and after the ex-dividend date and the in-the-money amount for options to purchase shares of common stock. The vesting schedules for RSUs granted under this plan are the same as the existing awards for which they are granted. The compensation to employees of continuing operations was paid in January 2008, and consisted of $37.4 million in cash payments and 622,000 RSUs.

Note 6:    Stock-based Compensation Expense

For the years ended December 31, 2008, 2007, and 2006, the Company recognized compensation expense related to stock options and RSUs of $14.3 million, $34.1 million, and $11.3 million, respectively. To estimate the compensation cost that was recognized under SFAS No. 123(R) for the years ended December 31, 2008, 2007 and 2006, the Company used the Black-Scholes-Merton option-pricing model with the following weighted-average assumptions for equity awards granted:

	Employee Stock Option Plans			Employee Stock Purchase Plan
	Years ended December 31,			Years ended December 31,
	2008	2007	2006	2008	2007	2006
Risk-free interest rate	2.02% - 2.85%	4.59% - 5.02%	4.38% - 5.07%	2.01% -3.78%	5.07% - 5.12%	4.13% - 4.84%
Expected dividend yield	0%	0%	0%	0%	0%	0%
Volatility	28% - 56%	48% - 67%	52% - 88%	39% - 63%	41% - 52%	30% - 35%
Expected life	2.8 years	2.5 years	2.8 years	6 months	6 months	6 months

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INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent remaining term. The Company paid a special dividend in 2007 and declared another dividend that was paid in January 2008, and may pay special dividends in the future, but does not expect to pay recurring dividends. The expected volatility is based on historical volatility of the Company’s stock for the related expected life of the option. The expected life of the equity award is based on historical experience.

As of December 31, 2008, total unrecognized stock-based compensation cost related to unvested stock options and unvested RSUs associated with continuing operations was $10.9 million. The balance at December 31, 2008 is expected to be recognized over a weighted average period of approximately 16 months. Total unrecognized stock-based compensation cost related to unvested stock options was $2.6 million, which is expected to be recognized over a weighted average period of approximately 17 months. Total unrecognized stock-based compensation cost related to unvested RSU grants was $8.3 million, which is expected to be recognized over a weighted average period of approximately 16 months.

The Company has included the following amounts for stock-based compensation cost, including the cost related to the ESPP, in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2008, 2007, and 2006 (amounts in thousands, except per share data):

	Year ended December 31,
	2008		2007		2006
Systems and network operations	$	1,663	$	1,091	$	1,194
Product development		3,284		2,383		960
Sales and marketing		3,551		7,948		2,400
General and administrative		5,806		22,636		6,715
Total	$	14,304	$	34,058	$	11,269

No financing cash flow was generated by tax benefits from stock-based award activity in 2008 nor was any tax expense recognized related to stock-based compensation. Financing cash flow generated by tax benefits from stock-based award activity in 2007 was $23.7 million and no tax expense was recognized related to stock-based compensation. The total tax expense recognized related to stock-based compensation for 2006 was $139,000 and no Financing cash flow was generated. Excluded from the amounts recorded in the above categories of operating expense for the years ended December 31, 2008, 2007, and 2006 are the following amounts included in Restructuring, resulting from options held by terminated employees, amounts that were capitalized as part of internally developed software, and amounts that were reclassified as discontinued operations (amounts in thousands):

	Year ended December 31,
	2008		2007		2006
Restructuring	$	60	$	670	$	824
Internally developed software		637		466		241
Discontinued operations – directory business		52		1,630		728
Discontinued operations – mobile services business		89		13,459		4,866
Total	$	838	$	16,225	$	6,659

Stock-based compensation expense recognized during the years ended December 31, 2008, 2007, and 2006 includes (1) compensation expense for awards granted prior to, but not yet fully vested as of, January 1, 2006,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

and (2) compensation expense for the share-based payment awards granted subsequent to December 31, 2005, based on the grant date fair values estimated in accordance with the provisions of SFAS No. 123, Accounting for Stock-Based Compensation, and SFAS No. 123(R), respectively. The Company has historically disclosed and currently recognizes stock-based compensation expense over the vesting period for each separately vesting portion of a share-based award as if they were, in substance, a multiple share-based award. SFAS No. 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has historically estimated and continues to estimate the fair value of share-based awards using the Black-Scholes-Merton option-pricing model.

The weighted average fair value for options granted in the years ended December 31, 2008, 2007, and 2006 was $3.31, $8.34, and $10.40 per share, respectively. The Company issues new shares upon exercise of options to purchase common stock and vesting of restricted stock units.

Total intrinsic value of options exercised to purchase common stock in the years ended December 31, 2008, 2007, and 2006 was $19,000, $5.2 million, and $6.7 million, respectively. Awards outstanding at December 31, 2008 have the following total intrinsic value and weighted average remaining contractual terms:

	Outstanding at December 31, 2008	Intrinsic value (in thousands)		Weighted average remaining contractual term (in years)
Options outstanding	4,177,438	$	12	3.9
Options exercisable and outstanding	3,069,055	$	12	3.0
Restricted stock units outstanding	1,272,505	$	9,607	1.1

Options outstanding at December 31, 2008 and expected to vest in the future, based on the Company’s estimate of its pre-vesting forfeiture rate, have an intrinsic value of $12,000 and weighted average remaining contractual term of 3.7 years. RSUs expected to vest after December 31, 2008, based on the Company’s estimate of its pre-vesting forfeiture rate, have an intrinsic value of $7.9 million and weighted average remaining contractual term of 1.0 years. Cash generated from the exercise of stock options amounted to $16,000 for the year ended December 31, 2008.

Note 7:     Commitments and Contingencies

The Company has noncancellable operating leases for its corporate facilities. The leases expire through 2013. Rent expense under operating leases totaled $1.3 million, $2.7 million, and $2.0 million for the years ended December 31, 2008, 2007, and 2006, respectively.

The Company’s capital lease commitments and $687,000 of the purchase commitments are included in the Company’s Consolidated Balance Sheets. The Company’s contractual commitments are as follows for the years ending December 31 (in thousands):

	2009		2010		2011		2012		2013		Thereafter		Total
Operating lease commitments	$	1,589	$	1,646	$	1,614	$	1,665	$	284	$	—	$	6,798
Purchase commitments		1,773		1,742		1,251		1,026		493		—		6,285
Capital lease commitments (net of imputed interest and executory costs)		552		565		209		—		—		—		1,326
Total	$	3,914	$	3,953	$	3,074	$	2,691	$	777	$	—	$	14,409

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INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

As of December 31, 2008, the Company has pledged $5.1 million as collateral for standby letters of credit and bank guaranties for certain of its property leases, which is included in Other long-term assets.

Contingencies

In the year ended December 31, 2008, the Company recorded expense from settlements and estimated liabilities from loss contingencies of $550,000 and $2.7 million, respectively, in Loss from discontinued operations in the accompanying Consolidated Statement of Operations and Comprehensive Loss. Additionally, as of December 31, 2008, it is reasonably possible that additional losses from contingencies may be incurred, although the Company cannot reasonably estimate any additional possible losses.

Litigation

On December 17, 2008, Anne D. Manos filed a lawsuit against current officers and directors of the company, as well as nominal defendant InfoSpace, in the Superior Court of the State of Washington in and for King County (“Court”). Plaintiff purports to bring the lawsuit derivatively on behalf of the Company, seeking to invalidate and recover payments made to the defendant officers and directors pursuant to a compensation program established by the Company’s board of directors. Specifically, plaintiff alleges that the defendant officers and directors breached their fiduciary duties and duties of loyalty by approving such compensation program, which was designed to offset the diminution in value to InfoSpace employee and board members’ options that occurred as a result of the cash distributions to shareholders. On February 11, 2009, Ms. Manos filed a First Amended Complaint that is substantively identical to her original complaint, adding only James N. Mercer as co-plaintiff. On or before March 6, 2009, InfoSpace anticipates filing a motion to dismiss the First Amended Complaint based on plaintiffs’ failure to make the requisite pre-filing demand on the Company’s board of directors. The parties have agreed to stay discovery pending resolution by the Court of InfoSpace’s anticipated motion to dismiss. The trial date is currently set for June 7, 2010. The complaint is derivative in nature and does not seek monetary damages from the Company. The Company has entered into indemnification agreements in the ordinary course of business with its officers and directors and may be obligated throughout the pendency of this action to advance payment of legal fees and costs incurred by the defendant current and former officers and directors pursuant to the Company’s obligations under the indemnification agreements and applicable Delaware law.

The Company operated its ringtone business under licensing agreements with various music publishers, including Warner/Chappell Music, Inc. Following the Company’s sale of its ringtone business, Warner/Chappell Music and two related entities, WB Music Corp. and Warner-Tamerlane Publishing Corp., asserted claims against the Company for supposedly improper use of their copyrighted musical compositions. In January 2009, WB Music Corp. and Warner-Tamerlane Publishing Corp. filed a Complaint for Copyright Infringement against the Company and two of the Company’s alleged subsidiaries in the U.S. District Court for the Central District of California. The Complaint, which the plaintiffs have not yet served, seeks unspecified actual and/or statutory damages for the supposed unauthorized use of 26 compositions. The Company is currently investigating the allegations. To date, the Company believes that the plaintiffs’ claims are without merit and that it has viable defenses to them. In addition, in April 2008, Warner Chappell Music filed a Complaint for Breach of Contract against the Company and two of the Company’s alleged subsidiaries in which it claims that the Company owes it not less than $750,000 under the parties’ agreements. The Company believes this action likewise lacks merit and that the Company has defenses to the claims asserted. The Company has filed counterclaims against Warner Chappell Music and filed cross-claims against the auditor hired by Warner Chappell Music. The parties have discussed the possibility of mediating their disputes and may do so in the next few months. There is no guarantee that a mediation will be successful in resolving the disputes between the parties. Moreover, because litigation is inherently uncertain, the Company may

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

not prevail if these matters are fully litigated, and there can be no assurance that there will not be material adverse financial consequences for the Company resulting from these matters.

From time to time the Company is subject to various legal proceedings or claims that arise in the ordinary course of business. Although the Company cannot predict the outcome of these matters with certainty, the Company’s management does not believe that the disposition of these ordinary course matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Other

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, partners and other parties. The Company has agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or other claims made against certain parties. It is not possible to determine the maximum potential amount for which the Company could be held liable under these indemnification agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. Accordingly, the Company has not recorded a liability related to such indemnification provisions.

The Company periodically enters into agreements that require minimum performance commitments. The Company’s management believes that the likelihood is remote that any such arrangements will have a significant adverse effect on its financial position or liquidity. Accordingly, the Company has not recorded a liability related to these contingencies.

Note 8:     Income Taxes

Income tax expense (benefit) from continuing operations consists of the following for the years ended December 31, 2008, 2007, and 2006 (in thousands):

	Years ended December 31,
	2008			2007			2006
Current
U.S. federal	$	3,159		$	(6,408	)	$	841
State		20			—			—
Foreign		86			7			—
Total current expense (benefit)	$	3,265		$	(6,401	)	$	841
Deferred
U.S. federal	$	(2,667	)	$	19,810		$	(29,901	)
Total deferred expense (benefit)		(2,667	)		19,810			(29,901	)
Income tax expense (benefit), net, relating to continuing operations	$	598		$	13,409		$	(29,060	)

The 2008 income tax expense of $598,000 was primarily attributable to a $5.6 million tax benefit from current year operations, $436,000 tax expense for non-deductible compensation paid to an executive, and a $5.4 million tax expense for the net increase in the valuation allowance against the deferred tax assets.

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INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

The Income tax expense (benefit) from continuing operations differs from the amount computed by applying the statutory federal income tax rate for the years ended December 31, 2008, 2007, and 2006 as follows (in thousands):

	Years ended December 31,
	2008			2007			2006
Income tax benefit at federal statutory rate of 35%	$	(5,557	)	$	(24,873	)	$	(8,777	)
Foreign		86			7			—
State, net of federal benefit		13			—			—
Nondeductible goodwill		—			—			8,210
Nondeductible compensation		436			22,316			—
Increase (decrease) in beginning of year valuation allowance balance		5,352			16,016			(28,643	)
Other		268			(57	)		150
Expense (benefit) for income taxes, net	$	598		$	13,409		$	(29,060	)

The income tax expense from continuing operations reflects an increase in the valuation allowance during the year ended December 31, 2008 of $5.4 million, while the Consolidated Balance Sheets reflect a decrease in the valuation allowance of $2.7 million. The $8.0 million difference between the decrease in the valuation allowance on the Consolidated Balance Sheets and the increase in the valuation allowance reflected in the income tax provision is primarily attributable to a $6.2 million decrease in the valuation allowance in connection with the reversal of deferred tax assets pertaining to settlement of compensation cost, where the compensation cost was in excess of the tax benefit.

The tax effect of temporary differences and net operating loss carry forwards from continuing operations that give rise to the Company’s deferred tax assets and liabilities as of December 31, 2008 and 2007 are as follows (in thousands):

	December 31,
	2008			2007
Deferred tax assets:
Current	$	11,625		$	3,764
Non-current:
Net operating loss carryforwards		289,115			293,706
Tax credit carryforwards		3,987			3,994
Depreciation and amortization		9,875			14,057
Other, net		7,059			8,807
Total non-current		310,036			320,564
Total gross deferred tax assets		321,661			324,328
Valuation allowance		(321,661	)		(324,328	)
Net deferred tax assets	$	—		$	—

At December 31, 2008 and 2007, the Company provided a valuation allowance against its net deferred tax assets for which significant uncertainty exists regarding the ultimate realization. The Company evaluates its deferred tax assets for future realization and reduces it by a valuation allowance to the extent that realization is

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INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

not more likely than not. Many factors are considered when assessing the likelihood of future realization of deferred tax assets, including recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, the carryforward periods available for tax reporting purposes, trends in the industry and the current macroeconomic environment, and other relevant factors. At December 31, 2008, the Company reassessed the realizability of its remaining net deferred tax assets and concluded that, based on available evidence, that realizability was not more likely than not. Accordingly, the Company provided a full valuation allowance on its net deferred tax assets. In the last quarter of 2007, the Company divested a significant portion of its business operations. At December 31, 2007, the Company reassessed the realizability of its remaining net deferred tax assets and concluded that, based on available evidence, that realizability was not more likely than not. Accordingly, the Company recorded a full valuation allowance on its net deferred tax assets and recognized an income tax expense of $16.0 million. At December 31, 2006, the Company concluded, based on available evidence, that it was more likely than not that a portion of the operating assets would be realizable in the foreseeable future. Accordingly, the Company reduced its valuation allowance and recognized an income tax benefit of $28.6 million in 2006. The net changes in the valuation allowance during the years ended December 31, 2008 and 2007 are shown below (in thousands):

	Valuation allowance
	2008			2007
Balance at beginning of year	$	324,328		$	336,895
Valuation allowance recorded to income tax expense		—			22,278
Credited to stockholders’ equity		—			(27,299	)
Net changes to deferred tax assets		(2,667	)		(7,546	)
Balance at end of year	$	321,661		$	324,328
Net change during the year	$	(2,667	)	$	(12,567	)

As of December 31, 2008, the Company’s U.S. federal net operating loss carryforward for income tax purposes was approximately $800 million, all of which relates to tax deductions for stock-based compensation. When the net operating loss carryforwards related to excess stock-based compensation are recognized, the income tax benefit of those losses is accounted for as a credit to stockholders’ equity on the Consolidated Balance Sheets rather than the Consolidated Statements of Operations and Comprehensive Income (Loss).

If not utilized, the Company’s federal net operating loss carryforwards will expire between 2020 and 2024. Additionally, changes in ownership, as defined by Section 382 of the Internal Revenue Code, may limit the amount of net operating loss carryforwards used in any one year.

In July 2006, the FASB issued Interpretation No. (“FIN”) 48, Accounting for Uncertainty in Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company adopted FIN 48 on January 1, 2007. As a result of the adoption, the Company did not recognize a change in the liability for unrecognized tax benefits.

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INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years ended December 31, 2008 and 2007 are as follows (in thousands):

	Unrecognized tax benefits
Balance at January 1, 2007	$	18,830
Gross increases for tax positions of prior years		—
Gross decreases for tax positions of prior years		—
Gross increases for tax positions of current year		—
Gross decreases for tax positions of current year		—
Settlements		—
Lapse of statute of limitations		—
Balance at December 31, 2008	$	18,830

There were no changes to unrecognized tax benefits during the year ended December 31, 2007.

Total amount of unrecognized tax benefits that would affect the Company’s effective tax rate if recognized was $634,000 as of December 31, 2008 and 2007. The remaining $18.2 million, if recognized, would create a deferred tax asset subject to a valuation allowance. If the Company released the valuation allowance, the amount would affect the Company’s effective tax rate. The Company does not believe there will be any material changes in its unrecognized tax benefits over the next twelve months.

The Company and certain of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2005, although net operating loss carryforwards and tax credit carryforwards from any year are subject to examination and adjustment for at least three years following the year in which they are fully utilized. As of December 31, 2008, no significant adjustments have been proposed relative to the Company’s tax positions.

The Company recognizes interest and penalties related to uncertain tax positions in interest expense and general and administrative expenses, respectively. As of December 31, 2008 and 2007, the Company had $144,000 and $84,000 of accrued interest related to uncertain tax positions, respectively, which is included in Accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheets.

Note 9:     Restructuring

Restructuring charges were $17,000, $9.6 million, and $62.3 million for the years ended December 31, 2008, 2007, and 2006, respectively.

In 2007, the Company sold its directory and mobile services businesses and, as a result, committed to a plan to make operational changes to its business, which included a reduction in its workforce and, as part of the workforce reduction, consolidation of its facilities. The Company recorded $7.4 million of expense related to that plan in 2007, and $2.2 million of adjustments and additions in 2007 relating to the restructuring plan committed to in 2006, as described below.

In 2006, as a result of being informed by one of its carrier partners that it intended to develop direct relationships for mobile ringtone content with the major record labels beginning in 2007, the Company committed to a plan to substantially reduce its mobile content offerings and make operational changes to its business, which included a reduction in its workforce and, as part of the workforce reduction, consolidation of its facilities.

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INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

Restructuring charges for the years ended December 31, 2008, 2007, and 2006 consisted of the following (in thousands):

	Years ended December 31,
Type	2008			2007		2006
Impairment of goodwill	$	—		$	—	$	31,903
Impairment of other intangible assets		—			—		12,623
Employee separation costs		52			7,963		8,687
Stock-based compensation		60			670		824
Losses on contractual commitments		(88	)		831		5,671
Estimated future lease losses		(7	)		—		1,667
Impairment of leasehold improvements and fixed assets		—			126		941
	$	17		$	9,590	$	62,316

At December 31, 2008, the accrued liability associated with the restructuring related charges was $4,000 and consisted of the following (in thousands):

	Employee separation			Contractual commitments			Facility abandonment			Total
Reserve balance at December 31, 2006	$	5,934		$	2,838		$	1,450		$	10,222
Provision for restructuring		8,855			47			883			9,785
Adjustments		(775	)		(1,201	)		(398	)		(2,374	)
Payments in 2007		(6,725	)		(1,454	)		(1,826	)		(10,005	)
Reserve balance at December 31, 2007	$	7,289		$	230		$	109		$	7,628
Provision for restructuring		24			—			—			24
Adjustments		110			(86	)		(101	)		(77	)
Payments in 2008		(7,419	)		(144	)		(8	)		(7,571	)
Reserve balance at December 31, 2008	$	4		$	—		$	—		$	4

The Company does not expect to incur any material restructuring charges in 2009 related to initiatives identified to date that have not yet been recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Note 10:    Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS No. 141(R)”). In SFAS No. 141(R), the FASB retained the fundamental requirements of SFAS No. 141 to account for all business combinations using the acquisition method and for an acquiring entity to be identified in all business combinations. However, the revised standard requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to immediately expense costs related to the acquisition. SFAS No. 141(R) is effective for annual periods beginning on or after December 15, 2008. The impact that SFAS No. 141(R) will have on the Company’s consolidated financial statements when effective will depend upon the nature, terms and size of the acquisitions completed after the effective date.

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INFOSPACE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Years Ended December 31, 2008, 2007 and 2006

On January 1, 2008, the Company adopted the provisions of SFAS No. 157 which defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and accordingly, does not require any new fair value measurements. On February 12, 2008, the FASB issued Staff Position No. FAS 157-2, Effective Date of FASB Statement No. 157, which delayed the effective date of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities to fiscal years beginning after November 15, 2008. The adoption of SFAS No. 157 for financial assets and liabilities did not have a material impact on the Company’s financial position, cash flows, or results of operations. The Company is currently evaluating the remaining provisions of SFAS No. 157 to determine what effect its adoption on January 1, 2009 for nonfinancial assets and nonfinancial liabilities will have on its financial position, cash flows, and results of operations.

On October 10, 2008, the FASB issued FSP No. 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active. FSP No. 157-3 clarifies the application of SFAS No. 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. FSP No. 157-3 became effective immediately, including prior periods for which financial statements have not been issued. Therefore, the Company adopted the provisions of FSP No. 157-3 in its consolidated financial statements for the year ended December 31, 2008. The adoption did not have a material impact on the Company’s financial position, cash flows or results of operations.

88

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

ITEM 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure, and that such information is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of the Sponsoring Organizations of the Treadway Commission.

Based on our evaluation under the framework in Internal Control—Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2008.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fourth quarter of fiscal year 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

89

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

InfoSpace, Inc.

Bellevue, Washington

We have audited the internal control over financial reporting of InfoSpace, Inc. and subsidiaries (the “Company”) as of December 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2008 of the Company and our report dated March 2, 2009 expressed an unqualified opinion on those financial statements.

/s/ DELOITTE & TOUCHE LLP

Seattle, Washington

March 2, 2009

90

ITEM 9B. Other Information

Not applicable.

91

PART III

We have omitted certain information from this Annual Report on Form 10-K that is required by Part III. We intend to file a definitive proxy statement pursuant to Regulation 14A with the Securities and Exchange Commission relating to our annual meeting of stockholders not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and such information is incorporated by reference herein.

ITEM 10. Directors, Executive Officers and Corporate Governance

Certain information concerning our directors required by this Item is incorporated by reference to our Proxy Statement under the heading “Proposal One—Election of Directors.”

Certain information regarding our executive officers is included in Part I of this Report under the caption “Executive Officers and Directors of the Registrant” and is incorporated by reference into this Item.

Other information concerning our officers and directors required by this Item is incorporated by reference to our Proxy Statement under the heading “Additional Information Relating to our Directors and Executive Officers.”

ITEM 11. Executive Compensation

The information required by this Item is incorporated by reference to our Proxy Statement under the heading “Additional Information Relating to Our Directors and Executive Officers.”

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item is incorporated by reference to our Proxy Statement under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Additional Information Relating to Our Directors and Executive Officers—Equity Compensation Plans.”

ITEM 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is incorporated by reference to our Proxy Statement under the heading “Proposal One – Election of Directors” and “Additional Information Relating to Our Directors and Executive Officers.”

ITEM 14. Principal Accountant Fees and Services

The information required by this item is incorporated by reference to our Proxy Statement under the headings “Fees Paid to Independent Registered Public Accounting Firm for 2008 and 2007” and “Audit Committee Report.”

92

PART IV

ITEM 15. Exhibits and Financial Statement Schedules

(a)

1.    Consolidated Financial Statements.

See Index to Consolidated Financial Statements at Item 8 on page 54 of this Report.

2.     Financial Statement Schedules.

All financial statement schedules required by Item 15(a)(2) have been omitted because they are not applicable or the required information is presented in the Consolidated Financial Statements or Notes thereto.

3.    Exhibits.

Number	Description
3.1(1)	Amended and Restated Certificate of Incorporation
3.2(2)	Restated Bylaws, as amended
4.1(3)	Form of Certificate of the Powers, Designations, Preferences and Rights of Series A Preferred Stock
4.2(4)	Certificate of the Powers, Designations, Preferences and Rights of Series B Preferred Stock
4.3(5)	Preferred Stock Rights Agreement, dated as of July 19, 2002, between the Company and Mellon Investor Services LLC, including the Certificate of Designation, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, B, and C, respectively
10.1(6)	Form of Indemnification Agreement between the registrant and each of its directors and executive officers
10.2(7)*	Restated 1996 Flexible Stock Incentive Plan
10.3(6)*	1998 Employee Stock Purchase Plan
10.4(8)	Lease, dated March 10, 2000, between the registrant and Three Bellevue Center, LLC
10.5(9)*	Amended and Restated 2001 Nonstatutory Stock Option Plan
10.6(9)*	Amended and Restated Employment Agreement dated August 3, 2007 between InfoSpace, Inc. and R. Bruce Easter
10.7(9)*	Amended and Restated Employment Agreement dated August 3, 2007 between InfoSpace, Inc. and Steve Elfman
10.8(9)*	Amended and Restated Employment Agreement dated August 3, 2007 between InfoSpace, Inc. and Allen M. Hsieh
10.9(9)*	Amended and Restated Employment Agreement dated August 3, 2007 between InfoSpace, Inc. and Brian McManus
10.10(10)*	InfoSpace, Inc. Switchboard Incorporated Stock Incentive Plan
10.11(11)*	Form of InfoSpace, Inc. Restated 1996 Flexible Stock Incentive Plan Nonqualified Stock Option Letter Agreement
10.12(12)	Mutual Release and Settlement Agreement dated as of December 22, 2004 between InfoSpace, Inc. and certain current and former directors and officers of InfoSpace, Inc. and a private party shareholder of InfoSpace, Inc.

93

Number	Description
10.13(12)*	Terms of Stock Option Grant program for Nonemployee Directors under the Restated 1996 Flexible Stock Incentive Plan
10.14(12)*	Description of Retainer and Meeting Fees Paid to Directors
10.15(13)	Sixth Amendment dated September 26, 2005, to that certain Lease dated March 10, 2000, between InfoSpace, Inc. and Three Bellevue Center LLC
10.16(14)*	Description of Acceleration of Vesting of Certain Unvested and “Out-of-the-Money” Stock Options
10.17(15)*	2008 InfoSpace Executive Bonus Plan
10.18(16)*	Agreement by and between InfoSpace, Inc. and certain entities affiliated with the Sandell Asset Management Corp., dated April 26, 2007
10.19(7)*	Form of InfoSpace, Inc. Restated 1996 Flexible Stock Incentive Plan Notice of Grant of Restricted Stock Units and Restricted Stock Unit Agreement
10.20(9)*	Form of InfoSpace, Inc. Amended and Restated 2001 Nonstatutory Stock Option Plan Notice of Grant of Restricted Stock Units and Restricted Stock Unit Agreement
10.21(9)*	From of InfoSpace, Inc. Restricted Stock Unit Award Tax Withholding Election Form
10.22(9)*	Form of InfoSpace, Inc. Restated 1996 Flexible Stock Incentive Plan Notice of Grant of Restricted Stock Units and Restricted Stock Unit Agreement for US-Based Vice President or Above
10.23(17)	Asset Purchase Agreement between Idearc Inc. and InfoSpace, Inc., dated as of September 15, 2007
10.24(18)	Asset Purchase Agreement between InfoSpace, Inc. and Motricity, Inc., dated as of October 15, 2007
10.25(19)	Ninth Amendment to Office Lease, effective as of December 21, 2007, by and between InfoSpace, Inc. and WA—Three Bellevue Center, L.L.C. for office space located at 601 108th Avenue N.E., Bellevue, Washington
10.26(20)	Tenth Amendment to Office Lease, effective as of January 29, 2008, by and between InfoSpace, Inc. and WA—Three Bellevue Center, L.L.C. for office space located at 601 108th Avenue N.E., Bellevue, Washington
10.27(21)*	Employment Agreement effective as of October 7, 2008 between InfoSpace, Inc. and Michael J. Glover
10.28(21)*	Employment Agreement, amended and restated effective as of October 28, 2008, between InfoSpace, Inc. and Bruce M. Allenbaugh
10.29(21)*	Employment Agreement, amended and restated effective as of October 28, 2008, between InfoSpace, Inc. and David B. Binder
10.30(21)*	Employment Agreement, amended and restated effective as of October 28, 2008, between InfoSpace, Inc. and Eric M. Emans
10.31(21)*	Employment Agreement, amended and restated effective as of October 28, 2008, between InfoSpace, Inc. and Sunil Thomas
10.32(21)*	Employment Agreement, amended and restated effective as of October 28, 2008, between InfoSpace, Inc. and Alejandro C. Torres
10.33(21)*	Employment Agreement effective as of October 28, 2008 between InfoSpace, Inc. and Stuart West

94

Number	Description
10.34(21)*	Amended and Restated Employment Agreement, amended and restated as of November 4, 2008, between InfoSpace, Inc. and James F. Voelker
10.35(22)*	Employment Agreement effective as of February 2, 2009 between InfoSpace, Inc. and William J. Lansing
10.36†	Google Services Agreement and Order Form by and between Google Inc. and InfoSpace Sales LLC dated October 1, 2005.
10.37†	Amended and Restated Google Services Agreement by and between Google Inc. and InfoSpace Sales LLC dated October 1, 2005.
10.38†	Amendment Number One to Amended and Restated Google Inc. Services Agreement and Order Form dated November 6, 2006 by and between Google Inc. and InfoSpace Sales LLC.
10.39†	Amendment Number Two to Amended and Restated Google Inc. Services Agreement and Order Form dated February 1, 2008 by and between Google Inc. and InfoSpace Sales LLC.
10.40†	Amendment Number Four to Amended and Restated Google Inc. Services Agreement and Order Form dated December 1, 2008 by and between Google Inc. and InfoSpace Sales LLC.
10.41†	Yahoo! Search Marketing—Yahoo! Publisher Network Service Order #1-9935871 by and among Overture Services, Inc., Overture Search Services (Ireland) Limited, InfoSpace Sales LLC, InfoSpace Europe Limited and InfoSpace, Inc. (as guarantor) dated November 26, 2007.
10.42†	Amendment #1 dated January 31, 2008 to the Yahoo! Search Marketing—Yahoo! Publisher Network Service Order #1-9935871 dated November 26, 2007 by and among Overture Services, Inc., Overture Search Services (Ireland) Limited, InfoSpace Sales LLC, InfoSpace Europe Limited and InfoSpace, Inc. (as guarantor).
10.43†	Amendment #2 dated November 1, 2008 to the Yahoo! Search Marketing—Yahoo! Publisher Network Service Order #1-9935871 dated November 26, 2007 by and among Yahoo! Inc. (as successor-in-interest to Overture Services, Inc.), Overture Search Services (Ireland) Limited, InfoSpace Sales LLC, InfoSpace Europe Limited and InfoSpace, Inc. (as guarantor).
21.1	Subsidiaries of the registrant
23.1	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
24.1	Power of Attorney (contained on the signature page hereto)
31.1	Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1) Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2002 filed by the registrant on March 27, 2003.

(2) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on November 20, 2007.

(3) Incorporated by reference to the Registration Statement on Form S-1 (No. 333-86313) filed by the registrant on September 1, 1999, as amended.

(4) Incorporated by reference to the Registration Statement on Form S-1 (No. 333-58048) filed by the registrant on March 30, 2001, as amended.

(5) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on July 24, 2002.

95

(6) Incorporated by reference to the Registration Statement on Form S-1 (No. 333-62323) filed by the registrant on August 27, 1998, as amended.

(7) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on December 11, 2006.

(8) Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 1999 filed by the registrant on March 30, 2000.

(9) Incorporated by reference to the Quarterly Report on Form 10-Q for the three months ended June 30, 2007 filed by the registrant on August 9, 2007.

(10) Incorporated by reference to the Registration Statement on Form S-8 (333-116641) filed by the registrant on June 18, 2004.

(11) Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2005 filed by the registrant on February 23, 2006.

(12) Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2004 filed by the registrant on March 3, 2005.

(13) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on September 29, 2005.

(14) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on December 20, 2005.

(15) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on March 4, 2008.

(16) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on May 2, 2007.

(17) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on September 19, 2007.

(18) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on October 18, 2007.

(19) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on January 4, 2008.

(20) Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2007 filed by the registrant on February 25, 2008.

(21) Incorporated by reference to the Quarterly Report on Form 10-Q for the three months ended September 30, 2008 filed by the registrant on November 10, 2008.

(22) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on February 5, 2009

  * Indicates a management contract or compensatory plan or arrangement.

  † Confidential treatment has been requested for portions of this exhibit. These portions have been omitted from the Annual Report on Form 10-K and submitted separately to the Securities and Exchange Commission.

(b)    Exhibits

See Item 15 (a) above.

(c)    Financial Statements and Schedules.

See Item 15 (a) above.

96

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INFOSPACE, INC.
By:	/S/     WILLIAM J. LANSING
	William J. Lansing
	Chief Executive Officer and President
Date:	March 2, 2009

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David B. Binder and Alejandro C. Torres, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities to execute any amendments to this Annual Report on Form 10-K, and to file the same, exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on the dates indicated.

Signature	Title	Date
/s/     WILLIAM J. LANSING         William J. Lansing	Chief Executive Officer, President and Director (Principal Executive Officer)	March 2, 2009
/s/     DAVID B. BINDER         David B. Binder	Chief Financial Officer and Treasurer (Principal Financial Officer)	March 2, 2009
/s/     ERIC M. EMANS         Eric M. Emans	Chief Accounting Officer (Principal Accounting Officer)	March 2, 2009
/s/     JAMES F. VOELKER         James F. Voelker	Chairman	March 2, 2009
/s/     JOHN E. CUNNINGHAM, IV         John E. Cunningham, IV	Director	March 2, 2009
/s/     JULES HAIMOVITZ         Jules Haimovitz	Director	March 2, 2009
/s/     RICHARD D. HEARNEY         Richard D. Hearney	Director	March 2, 2009
/s/     WILLIAM J. RUCKELSHAUS         William J. Ruckelshaus	Director	March 2, 2009
/s/     LEWIS M. TAFFER         Lewis M. Taffer	Director	March 2, 2009
/s/     GEORGE M. TRONSRUE III         George M. Tronsrue III	Director	March 2, 2009

97

INDEX TO EXHIBITS

Number	Description
3.1(1)	Amended and Restated Certificate of Incorporation
3.2(2)	Restated Bylaws, as amended
4.1(3)	Form of Certificate of the Powers, Designations, Preferences and Rights of Series A Preferred Stock
4.2(4)	Certificate of the Powers, Designations, Preferences and Rights of Series B Preferred Stock
4.3(5)	Preferred Stock Rights Agreement, dated as of July 19, 2002, between the Company and Mellon Investor Services LLC, including the Certificate of Designation, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, B, and C, respectively
10.1(6)	Form of Indemnification Agreement between the registrant and each of its directors and executive officers
10.2(7)*	Restated 1996 Flexible Stock Incentive Plan
10.3(6)*	1998 Employee Stock Purchase Plan
10.4(8)	Lease, dated March 10, 2000, between the registrant and Three Bellevue Center, LLC
10.5(9)*	Amended and Restated 2001 Nonstatutory Stock Option Plan
10.6(9)*	Amended and Restated Employment Agreement dated August 3, 2007 between InfoSpace, Inc. and R. Bruce Easter
10.7(9)*	Amended and Restated Employment Agreement dated August 3, 2007 between InfoSpace, Inc. and Steve Elfman
10.8(9)*	Amended and Restated Employment Agreement dated August 3, 2007 between InfoSpace, Inc. and Allen M. Hsieh
10.9(9)*	Amended and Restated Employment Agreement dated August 3, 2007 between InfoSpace, Inc. and Brian McManus
10.10(10)*	InfoSpace, Inc. Switchboard Incorporated Stock Incentive Plan
10.11(11)*	Form of InfoSpace, Inc. Restated 1996 Flexible Stock Incentive Plan Nonqualified Stock Option Letter Agreement
10.12(12)	Mutual Release and Settlement Agreement dated as of December 22, 2004 between InfoSpace, Inc. and certain current and former directors and officers of InfoSpace, Inc. and a private party shareholder of InfoSpace, Inc.
10.13(12)*	Terms of Stock Option Grant program for Nonemployee Directors under the Restated 1996 Flexible Stock Incentive Plan
10.14(12)*	Description of Retainer and Meeting Fees Paid to Directors
10.15(13)	Sixth Amendment dated September 26, 2005, to that certain Lease dated March 10, 2000, between InfoSpace, Inc. and Three Bellevue Center LLC
10.16(14)*	Description of Acceleration of Vesting of Certain Unvested and “Out-of-the-Money” Stock Options
10.17(15)*	2008 InfoSpace Executive Bonus Plan
10.18(16)*	Agreement by and between InfoSpace, Inc. and certain entities affiliated with the Sandell Asset Management Corp., dated April 26, 2007
10.19(7)*	Form of InfoSpace, Inc. Restated 1996 Flexible Stock Incentive Plan Notice of Grant of Restricted Stock Units and Restricted Stock Unit Agreement
10.20(9)*	Form of InfoSpace, Inc. Amended and Restated 2001 Nonstatutory Stock Option Plan Notice of Grant of Restricted Stock Units and Restricted Stock Unit Agreement
10.21(9)	From of InfoSpace, Inc. Restricted Stock Unit Award Tax Withholding Election Form
10.22(9)*	Form of InfoSpace, Inc. Restated 1996 Flexible Stock Incentive Plan Notice of Grant of Restricted Stock Units and Restricted Stock Unit Agreement for US-Based Vice President or Above
10.23(17)	Asset Purchase Agreement between Idearc Inc. and InfoSpace, Inc., dated as of September 15, 2007
10.24(18)	Asset Purchase Agreement between InfoSpace, Inc. and Motricity, Inc., dated as of October 15, 2007
10.25(19)	Ninth Amendment to Office Lease, effective as of December 21, 2007, by and between InfoSpace, Inc. and WA—Three Bellevue Center, L.L.C. for office space located at 601 108th Avenue N.E., Bellevue, Washington
10.26(20)	Tenth Amendment to Office Lease, effective as of January 29, 2008, by and between InfoSpace, Inc. and WA—Three Bellevue Center, L.L.C. for office space located at 601 108th Avenue N.E., Bellevue, Washington
10.27(21)*	Employment Agreement effective as of October 7, 2008 between InfoSpace, Inc. and Michael J. Glover
10.28(21)*	Employment Agreement, amended and restated effective as of October 28, 2008, between InfoSpace, Inc. and Bruce M. Allenbaugh

Number	Description
10.29(21)*	Employment Agreement, amended and restated effective as of October 28, 2008, between InfoSpace, Inc. and David B. Binder
10.30(21)*	Employment Agreement, amended and restated effective as of October 28, 2008, between InfoSpace, Inc. and Eric M. Emans
10.31(21)*	Employment Agreement, amended and restated effective as of October 28, 2008, between InfoSpace, Inc. and Sunil Thomas
10.32(21)*	Employment Agreement, amended and restated effective as of October 28, 2008, between InfoSpace, Inc. and Alejandro C. Torres
10.33(21)*	Employment Agreement effective as of October 28, 2008 between InfoSpace, Inc. and Stuart West
10.34(21)*	Amended and Restated Employment Agreement, amended and restated as of November 4, 2008, between InfoSpace, Inc. and James F. Voelker
10.35(22)*	Employment Agreement effective as of February 2, 2009 between InfoSpace, Inc. and William J. Lansing
10.36†	Google Services Agreement and Order Form by and between Google Inc. and InfoSpace Sales LLC dated October 1, 2005.
10.37†	Amended and Restated Google Services Agreement by and between Google Inc. and InfoSpace Sales LLC dated October 1, 2005.
10.38†	Amendment Number One to Amended and Restated Google Inc. Services Agreement and Order Form dated November 6, 2006 by and between Google Inc. and InfoSpace Sales LLC.
10.39†	Amendment Number Two to Amended and Restated Google Inc. Services Agreement and Order Form dated February 1, 2008 by and between Google Inc. and InfoSpace Sales LLC.
10.40†	Amendment Number Four to Amended and Restated Google Inc. Services Agreement and Order Form dated December 1, 2008 by and between Google Inc. and InfoSpace Sales LLC.
10.41†	Yahoo! Search Marketing—Yahoo! Publisher Network Service Order #1-9935871 by and among Overture Services, Inc., Overture Search Services (Ireland) Limited, InfoSpace Sales LLC, InfoSpace Europe Limited and InfoSpace, Inc. (as guarantor) dated November 26, 2007.
10.42†	Amendment #1 dated January 31, 2008 to the Yahoo! Search Marketing—Yahoo! Publisher Network Service Order #1-9935871 dated November 26, 2007 by and among Overture Services, Inc., Overture Search Services (Ireland) Limited, InfoSpace Sales LLC, InfoSpace Europe Limited and InfoSpace, Inc. (as guarantor).
10.43†	Amendment #2 dated November 1, 2008 to the Yahoo! Search Marketing—Yahoo! Publisher Network Service Order #1-9935871 dated November 26, 2007 by and among Yahoo! Inc. (as successor-in-interest to Overture Services, Inc.), Overture Search Services (Ireland) Limited, InfoSpace Sales LLC, InfoSpace Europe Limited and InfoSpace, Inc. (as guarantor).
21.1	Subsidiaries of the registrant
23.1	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
24.1	Power of Attorney (contained on the signature page hereto)
31.1	Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1) Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2002 filed by the registrant on March 27, 2003.

(2) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on November 20, 2007.

(3) Incorporated by reference to the Registration Statement on Form S-1 (No. 333-86313) filed by the registrant on September 1, 1999, as amended.

(4) Incorporated by reference to the Registration Statement on Form S-1 (No. 333-58048) filed by the registrant on March 30, 2001, as amended.

(5) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on July 24, 2002.

(6) Incorporated by reference to the Registration Statement on Form S-1 (No. 333-62323) filed by the registrant on August 27, 1998, as amended.

(7) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on December 11, 2006.

(8) Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 1999 filed by the registrant on March 30, 2000.

(9) Incorporated by reference to the Quarterly Report on Form 10-Q for the three months ended June 30, 2007 filed by the registrant on August 9, 2007.

(10) Incorporated by reference to the Registration Statement on Form S-8 (333-116641) filed by the registrant on June 18, 2004.

(11) Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2005 filed by the registrant on February 23, 2006.

(12) Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2004 filed by the registrant on March 3, 2005.

(13) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on September 29, 2005.

(14) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on December 20, 2005.

(15) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on March 4, 2008.

(16) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on May 2, 2007.

(17) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on September 19, 2007.

(18) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on October 18, 2007.

(19) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on January 4, 2008.

(20) Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2007 filed by the registrant on February 25, 2008.

(21) Incorporated by reference to the Quarterly Report on Form 10-Q for the three months ended September 30, 2008 filed by the registrant on November 10, 2008.

(22) Incorporated by reference to the Current Report on Form 8-K filed by the registrant on February 5, 2009

* Indicates a management contract or compensatory plan or arrangement.

† Confidential treatment has been requested for portions of this exhibit. These portions have been omitted from the Annual Report on Form 10-K and submitted separately to the Securities and Exchange Commission.

EX-10.36

EXHIBIT 10.36

CERTAIN INFORMATION FROM THIS DOCUMENT HAS BEEN REDACTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST BY INFOSPACE, INC. UNDER 17 C.F.R. §§ 200.80(B)(4), 200.83 AND 240.24B-2 AND SUBMITTED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Google Inc. 1600 Amphitheatre Parkway Mountain View, CA 94043 Tel: (650) 623-4000     Fax: (650) 618-1711 Google Services Agreement     ORDER FORM Google SPD Rep: [*]   Google SPD Director: [*]   Google Sales Engineer: [*]   Google Legal Contact: [*]

CUSTOMER (FULL LEGAL NAME): InfoSpace Sales LLC		GSA Effective Date: October 1, 2005	NDA Effective Date:
	Corporate Contact Information	Billing Contact Information	Legal Notices to:
Attention:	[*]	[*]	[*]
Title:	Director Strategic Partnerships	Finance	General Counsel
Address, City, State, Postal Code, Country:	[*]	[*]	[*]
Phone:	[*]	[*]	[*]
Fax:
Email:	[*]	[*]
Technical Contact:	[*]	[*]	[*]
Customer Wire Transfer Info (if applicable): [*] Account#: [*]		D&B DUNS Number: [*]	VAT/Tax Number: [*]
Order Form Effective Date: October 1, 2005		Initial Services Term: October 1, 2005 – March 31, 2009

SEARCH SERVICES

SEARCH SERVICES Non-Refundable
Annual Service
and Support Fee Monthly
Search Fee
Minimum Payment Search Fees Safe Search (Check if
applicable) Language
Restrict (Check if
applicable) Country/Location
Restrict (Check if
applicable)

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 1 GSA Order Form v4.4 1104

x WebSearch Services Est. Query Vol./Day   WebSearch Site(s): [*]   Additional syndicated and sub-syndicated sites, as approved by Google   WebSearch Client Application(s): [*] and others approved by Google hereunder.   (For complete list of pre-approved sites that compose the Site and approved Client Applications, see Exhibit C attached hereto) [*] [*] [*] [*] SafeSearch     [*] [*] [*] [*] If checked, specify languages: [*] [*] If checked, specify country: [*]

ADSENSE SERVICES

ADSENSE FOR SEARCH (“AFS”)	Customer’s AFS Revenue Share Percentage (%)	AFS Deduction Percentage (%)	Specifications
x AdSense for Search AFS Site: [*] Additional syndicated and sub-syndicated sites, as approved by Google. AFS Client Application(s): [*] and others approved by Google hereunder. (For complete list of pre-approved sites that compose the Site and approved Client Applications, see Exhibit C attached hereto)	[*]	[*] [*]	[*] See Exhibit A for other AFS Specifications
Optional AdSense for Search Features: (check the applicable boxes)	[*] AdSafe Level: [*]

To Be Completed By Google Finance

Customer PO #:                ¨ Credit Check Complete Currency:   x US Dollar ¨ Japanese Yen ¨ Other:

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 2 GSA Order Form v4.4 1104

GSA Order Form Terms and Conditions

1. Incorporation of Google Services Agreement. This Order Form, including the terms and conditions hereunder, shall be governed by and incorporates by reference the Google Services Agreement between Google and Customer with the GSA Effective Date set forth in the Cover Page of this Order Form (the “GSA”). The GSA and this Order Form together comprise the “Agreement.”

2. Services Term. The term of this Order Form shall commence on the Order Form Effective Date and shall continue for the period of the Initial Services Term stated above, unless earlier terminated as provided in this Agreement. Thereafter, this Order Form may be renewed [*]. For purposes of this Agreement, the term of any renewal hereunder is referred to as the “Renewal Term,” and the Initial Services Term, together with the Renewal Term, if any, may also be referred to as the “Services Term.”

3. Defined Terms. The following capitalized terms shall have the meanings set forth below. Capitalized terms used but not defined in this Order Form shall have the meanings stated in the GSA.

GENERAL

3.1. “Ads” or “Advertising Results” means the AFS Ads ordered by Customer and served by Google under this Order Form, as further defined in Section 1.1 of the GSA.

3.2. “Client Application” is as defined in Section 2.6 of the GSA.

3.3. “Client ID” means a unique alphanumeric code provided to and used by Customer as specified by Google for purposes of identifying each Query. Google will assign and provide Customer with a Client ID for each Site, and may modify the Client IDs or the number of Client IDs for each Service from time to time upon written notice to Customer; provided, however, that Customer shall have [*] from such notice to implement any changes to the nature or number of Client IDs previously assigned and provided to Customer hereunder. Customer will use Client IDs as instructed by Google, and will provide such information to Google as Google may reasonably request with respect to the use and application of any Client IDs.

3.4. “Customer’s Technical Contact” means the technical employee of Customer designated on the Cover Page of this Order Form, or as subsequently designated by Customer to Google from time to time during the Service Term upon written notice.

3.5. “End Users” of a particular Site or Client Application (as defined in Section 2.6 of the GSA) means individual, human end users who visit or use the applicable Site or Client Application.

3.6. “Non-US Syndicated Site” means a Syndicated Site whose Results Pages are served from Web sites the language, content and activities of which are primarily directed and targeted to End Users outside the United States and Canada, as determined by Google [*].

3.7. “Order Form Effective Date” means the date designated as such on the Cover Page of this Order Form.

3.8. “Query” means a WebSearch Query and/or AFS Query, as further defined in Section 1.1 of the GSA.

3.9. “Results Page” means a Web page on which Google search and/or advertising results provided under this Agreement are displayed.

3.10. “Search Results” means the WebSearch results provided by Google through any Search Service ordered by Customer under this Order Form, as further defined in Section 1.1 of the GSA.

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 3 GSA Order Form v4.4 1104

3.11. “Site(s)” means the WebSearch Site(s), AFS Site(s), Syndicated Sites, Non-Hosted Syndicated Sites and Directory Service Sites, collectively, as further defined in Section 1.1 of the GSA. The “WebSearch Site(s)” and “AFS Site(s),” are those Web sites located at the URLs and identified as such on the Cover Page(s) of this Order Form, as the same may be amended from time to time as permitted herein. The list of WebSearch Site(s), AFS Site(s), Syndicated Sites, Non-Hosted Syndicated Sites and Directory Service Sites may be updated from time to time subject to Google’s prior written consent, which approval shall not be unreasonably withheld and provided in accordance with and subject to the approval process set forth in Section 1.4.3 of the GSA. Notwithstanding anything to the contrary set forth herein, with respect to requirements applicable to Syndicated Sites, Non-Hosted Syndicated Sites and Directory Service Sites, in the event of a conflict between the terms of this Order Form and the GSA, the terms of the GSA shall control.

3.12. “Syndicated Site” is as defined in Section 1.4.1 of the GSA.

3.13. “Valid IP Addresses” means those Internet protocol addresses provided by Customer via the Google Administrative Console prior to implementation of the applicable Services. The list of Valid IP Addresses may be modified by Customer upon [*] notice to Google via the online Google Administration Console located at [*], or such other URL as may be updated by Google from time to time.

3.14. “US Syndicated Site” means a Syndicated Site whose Results Pages are served from Web sites the language, content and activities of which are primarily directed and targeted to End Users in the United States and Canada, as determined by Google [*].

ADSENSE FOR SEARCH

3.15. “AFS Ads” means the advertisements provided by Google to Customer under this Agreement through Google’s AFS Service.

3.16. “AFS Deduction” for any period during the Services Term means the [*].

3.17. “AFS Protocol” means the protocol provided by Google for accessing the AFS Services, as such protocol may be updated by Google from time to time pursuant to Section 10.

3.18. “AFS Query” means a Query sent to Google by Customer to be processed by Google’s AFS Service.

3.19. “AFS Results Set” means the set of AFS Ads transmitted by Google to Customer in response to an AFS Query.

3.20. “AFS Revenues” for any period during the Services Term means [*].

3.21. “AFS Service” means Google’s AdSense for Search Service.

3.22. “International Sites” shall be those Sites primarily directed and targeted to End Users outside the United States and Canada on which Customer displays Search and/or Advertising Results and to which Google has granted a Client ID ([*]). For the avoidance of doubt, each Non-US Syndicated Sites shall be an International Site.

3.23. “Net AFS Revenues” for any period means [*].

WEBSEARCH

3.24. “WebSearch Box” means a search box into which End Users may enter Queries for submission by Customer to Google as set forth in this Agreement for the purpose of searching the Web.

3.25. “WebSearch Query” means a query sent to Google by Customer to be processed by Google’s WebSearch Service.

3.26. “WebSearch Protocol” means the protocol provided by Google for accessing the WebSearch Services, as such protocol may be updated by Google from time to time in accordance with Section 10 herein.

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 4 GSA Order Form v4.4 1104

3.27. “WebSearch Results” means WebSearch search results provided by Google through its WebSearch Service.

3.28. “WebSearch Results Set” means the set of WebSearch Results [*] transmitted by Google to Customer in response to a WebSearch Query.

3.29. “WebSearch Service” means Google’s WebSearch Service.

4. WebSearch Services.

4.1. Scope of WebSearch Services. Subject to the terms and conditions of this Agreement, Google will provide Customer with WebSearch Results through its WebSearch Service for display on the Sites as permitted herein. Subject to and in accordance with the terms and conditions of this Agreement, Customer agrees to [*] the WebSearch Service implementation on each WebSearch Site as agreed upon by the parties and set forth in this Order Form [*] and implement the WebSearch Service on any WebSearch Site or through any WebSearch Client Application added thereafter to the extent permitted herein. To the extent Google withdraws its approval of a WebSearch Site or WebSearch Client Application based upon a breach of this Agreement by such Site or Client Application, or the required agreement with any third party owner or operator of a WebSearch Site or WebSearch Client Application expires or is otherwise terminated, Customer may not maintain WebSearch Services on any such non-approved Site or permit access to the WebSearch Services through such offending Client Application and shall immediately terminate all access by such former WebSearch Site or through the WebSerch Client Application to the WebSearch Services. Furthermore, notwithstanding the above, to the extent Customer no longer owns or operates any WebSearch Site hereunder, Customer shall [*] the WebSearch Service on any such Site.

4.2. Implementation of WebSearch Services. Unless otherwise agreed to by Google in writing, Customer shall implement the WebSearch Services in a manner that: (a) conforms to the WebSearch Specifications set forth in the Cover Page(s) of this Order Form, if any; (b) conforms to Google’s brand treatment guidelines for WebSearch as updated by Google from time to time, the current version of which is located at http://www.google.com/wssynd/02brand.html; (c) [*] conforms [*] to the screenshots and specifications set forth in Exhibit A attached hereto; and (d) otherwise complies with the technical and implementation requirements provided by Google from time to time, including those instructions contained in the documentation setting forth the WebSearch Protocol, provided that for any changes made by Google to such technical and implementation requirements, Customer shall have [*] in which to implement and comply with such requirements as set forth in Section 10. For the avoidance of doubt, subject to the terms and conditions regarding implementation and display set forth in this Agreement, including without limitation the cover sheet of this Order Form and this Section 4.2, Customer shall [*] WebSearch Results on a Results Page. The criteria used to determine placement shall consider [*]. Notwithstanding anything to the contrary in this Agreement, WebSearch Services will not be provided to Customer [*], Customer shall only implement WebSearch Services and display WebSearch Results on [*].

4.2.1. Search Boxes and Queries. Subject to and in accordance with the terms and conditions of this Agreement, Customer shall implement on each WebSearch Site and WebSearch Client Application a WebSearch Box for End Users to enter WebSearch Queries. In addition to WebSearch Sites and WebSearch Client Applications, WebSearch Boxes may only be located on [*] approved by Google. The format and location of each WebSearch Box on each WebSearch Site and WebSearch Client Application is subject to [*]. Unless (and then only to the extent) otherwise approved by Google in writing, Customer understands and agrees that: (a) Queries sent to Google for processing under its WebSearch Service may be initiated only by End Users [*] and (iv) as otherwise expressly approved by Google in writing; and (b) except as otherwise permitted [*], Customer shall send [*] Queries [*] to Google for processing under its WebSearch Services in accordance with the requirements provided by Google, without [*]. Notwithstanding anything to the contrary, Google will have no obligation to process WebSearch Queries that are not sent in compliance with the requirements of this Agreement.

4.2.2. Operation of WebSearch Services. Customer will ensure that each WebSearch Query will [*]. Upon Google’s receipt of a WebSearch Query, Google will transmit a WebSearch Results Set, [*], via Google’s network interface in accordance with the WebSearch Protocol. The WebSearch Results Set will include [*] as part of the transmission of the Query to Google, to the extent that [*] found by Google’s WebSearch Service in response to the Query. The WebSearch Results will be transmitted to Customer [*]. Further, Google shall provide Customer with Search Results from [*]. Customer [*] then display, in each

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 5 GSA Order Form v4.4 1104

instance, the WebSearch Results Set that corresponds to such WebSearch Query on the applicable WebSearch Site in the manner contemplated by this Agreement.

4.2.3. Labeling, Branding and Attribution. [*]

4.3. License to WebSearch Protocol. Google grants to Customer a limited, nonexclusive and [*] license during the Services Term to use the WebSearch Protocol solely for the purpose of transmitting WebSearch Queries and other required information and receiving WebSearch Results Sets solely to the extent permitted hereunder. Except to the limited extent expressly provided in this Agreement, Google does not grant, and Customer shall not acquire, any right, title or interest (including, without limitation, any implied license) in or to any Google Intellectual Property Rights; and all rights not expressly granted herein are reserved to Google.

5. AdSense for Search Services.

5.1. Scope of AdSense for Search Services. Subject to the terms and conditions of this Agreement, Google will provide Customer with AFS Ads through its AFS Service for display on the AFS Sites as permitted herein. Subject to and in accordance with the terms and conditions of this Agreement, Customer agrees to [*] the AFS Service implementation on each AFS Site as agreed upon by the parties and set forth in this Order Form for [*] and implement the AFS Service on any AFS Site or AFS Client Application added thereafter to the extent permitted herein. To the extent Google withdraws its approval of an AFS Site or AFS Client Application based upon a breach of this Agreement by such Site or AFS Client Application, or the required agreement with any third party owner or operator of an AFS Site or AFS Client Application expires or is otherwise terminated, Customer may not maintain AFS Services on any such non-approved Site or permit access to the AFS Services through such offending Client Application and shall immediately terminate all access to the AFS Services by such former AFS Site. Furthermore, notwithstanding the above, to the extent Customer no longer owns or operates any AFS Site hereunder, Customer shall [*].

5.2. Implementation of AFS Services. Unless otherwise agreed to by Google in writing, Customer shall implement the AFS Services in a manner that: (a) conforms to the AFS Specifications set forth in the Cover Page(s) of this Order Form, if any; (b) conforms to Google’s brand treatment guidelines for AFS Services as updated by Google from time to time, the current version of which is located at http://www.google.com/wssynd/02brand.html; (c) [*] conforms [*] to the screenshots and specifications set forth in Exhibit A attached hereto; and (d) otherwise complies with the technical and implementation requirements provided by Google from time to time, including those instructions contained in the documentation setting forth the AFS Protocol, provided that for any changes made by Google to such technical and implementation requirements, Customer shall [*] implement and comply with such requirements as set forth in Section 10. For the avoidance of doubt, subject to the terms and conditions regarding implementation and display set forth in this Agreement, including without limitation in Section 3.2.1 of the GSA and this Section 5.2, Customer shall [*]. The criteria used to determine placement shall [*].

5.2.1. AFS Queries. Unless (and then only to the extent) otherwise approved by Google in writing, Customer understands and agrees that: (a) Queries sent to Google for processing under its AFS Service may be initiated only by End Users [*]; and (v) as otherwise approved by Google in writing; and (b) except as otherwise permitted [*], Customer shall send [*] Queries [*] to Google for processing under its AFS Services in accordance with the requirements provided by Google, without [*]. Notwithstanding anything to the contrary, Google will have no obligation to process AFS Queries that are not sent in compliance with the requirements of this Agreement.

5.2.1.1 Monetization of Queries from Non-Directory Service Sites. Subject to and in accordance with the terms and conditions of this Agreement, to the extent that Customer [*].

5.2.2. Operation of AFS Services. Customer will ensure that each AFS Query will [*]. Upon Google’s receipt of an AFS Query, Google will transmit an AFS Results Set, [*], via Google’s network interface in accordance with the AFS Protocol. The AFS Results Set will include [*]. The AFS Results will be transmitted to Customer [*]. Further, Google shall provide Customer with AFS Results from [*]. Customer shall then display, in each instance, the [*] AFS Results Set that corresponds to such AFS Query on the applicable AFS Site in the manner contemplated by this Agreement, without [*].

5.2.3. Labeling, Branding and Attribution. [*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 6 GSA Order Form v4.4 1104

5.3. License to AFS Protocol. Google grants to Customer a limited, nonexclusive and [*] license during the Services Term to use the AFS Protocol solely for the purpose of transmitting AFS Queries and other required information and receiving AFS Result Sets, as applicable, solely to the extent permitted hereunder. Except to the limited extent expressly provided in this Agreement, Google does not grant, and Customer shall not acquire, any right, title or interest (including, without limitation, any implied license) in or to any Google Intellectual Property Rights; and all rights not expressly granted herein are reserved to Google.

5.4. Access to Google Administrative Console. Google shall provide Customer with access to the Google Administrative Console which shall permit Customer online access to view and obtain certain metrics regarding Customer’s access to and use of the Services hereunder as made available by Google, including without limitation, [*]. All information accessed by Customer via the Google Administrative Console shall be Confidential Information of Google (except to the extent such information is Confidential Information of both parties as set forth in the following sentence) and shall be subject to all restrictions set forth in Section 7.2 of the GSA. Google shall treat any information and metrics that are specific to [*] as confidential and proprietary information as between the parties and governed by the NDA (as defined in the GSA).

6. Re-Ordering and Interspersing of Results. [*]

7. Site Modifications. [*].

8. Filters.

8.1. General. Certain Services may contain filtering capability, such as SafeSearch, Country Restrict, Language Restrict, AdSafe and other filters. Notwithstanding anything to the contrary, if Customer elects to enable any such filters, Customer expressly acknowledges and agrees (a) it is Customer’s responsibility to enable such features in accordance with the instructions provided by Google in the applicable Service protocol, and (b) that Google cannot and does not make any representation, warranty or covenant that all results will be limited to results elected by enabling such filter(s). For example, but without limiting the foregoing, if Customer elects SafeSearch, Country Restrict, Language Restrict and/or AdSafe, Google cannot and does not make any representation, warranty or covenant that all results will be limited to the countries or languages selected or that all objectionable results will be prevented.

8.2. URL Blocking. [*]

8.3. Filtering by Customer.

8.3.1 [*]

8.3.2 [*]

9. International Sites. [*]

10. Updates. If Google updates its technical or implementation specifications from time to time as contemplated herein, Customer shall implement such updates or modifications [*].

11. Notice of System Changes. Customer will [*] provide Google with [*] notice of any change in the code or serving technology used to display Google Advertising Results and/or Search Results (e.g., a change in the advertising serving technology used) [*].

12. Optimization. The parties agree to consult in good faith from time to time with the objective of optimizing the performance of Ads served under this Agreement.

13. Technical Support. Subject to the terms and conditions of this Agreement, during the Services Term Google shall provide technical support services to Customer in accordance with [*]. Prior to making any support request to Google, Customer shall [*]. Thereafter, Customer’s Technical Contact may submit a written request for technical support via email to the applicable Google alias set forth below, or such other email address that Google may provide from time to time. [*].

— [*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 7 GSA Order Form v4.4 1104

— [*]

14. Fees and Payment Terms.

14.1. WebSearch Services. Subject to the terms and conditions of this Agreement, Google shall bill Customer [*] at the rates stated on the Cover Page(s) of this Order Form and all such fees shall be due and payable [*]. [*] during the Services Term, Google shall provide Customer with online access to WebSearch Services usage reports [*].

14.2. AdSense for Search. Subject to the terms and conditions of this Agreement, [*] Customer shall receive that percentage of Net AFS Revenues as set forth below (“Net AFS Payment”):

14.2.1 [*]

(a) Revenue Share. [*]

(b) [*]

[*]

(c) [*]

14.2.2 [*]

14.2.3 [*]

Payments required under this section 14 shall be made [*].

14.3. Non-Qualifying Ads. Notwithstanding any of the foregoing, Google shall not be liable for payment in connection with any amounts which result from [*], in each case as reasonably determined by Google. [*].

14.4. Methods of Payment.

14.4.1. Payments to Google. All payments due to Google shall be in the currency specified in this Order Form. Any charges for converting foreign currency shall be the responsibility of Customer and shall be invoiced accordingly. If paid in US dollars, payments to Google shall be made preferably via wire transfer with the following instructions:

[*]	[*]	[*]
[*]	[*]	[*]

14.4.2. Payments to Customer. Payments to Customer (if by wire transfer) shall be made pursuant to the wire transfer instructions specified on this Order Form. In addition, Customer acknowledges that Google may, at its option and upon written notice to Customer, [*] in addition to whatever other rights and remedies Google may have hereunder or thereunder. In addition, Google reserves the right to [*].

15. Authority to Bind. Each of Customer’s and Google’s signatory to this Order Form represents and warrants that he or she has the power and authority to accept and bind Customer and Google, as the case may be, to the terms of this Order Form.

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 8 GSA Order Form v4.4 1104

This Order Form may be executed in counterparts, including facsimile counterparts, each of which shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument.

Google: GOOGLE INC.		Customer: INFOSPACE SALES LLC
By:	/s/ Joan Braddi	By:	/s/ James Voelker
Print Name: Joan Braddi		Print Name: James Voelker
Title: VP, Search Services		Title: CEO
Date: October 1, 2005		Date: October 1, 2005

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 9 GSA Order Form v4.4 1104

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 10 GSA Order Form v4.4 1104

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 11 GSA Order Form v4.4 1104

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 12 GSA Order Form v4.4 1104

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 13 GSA Order Form v4.4 1104

Exhibit B

URL Blocklist

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 14 GSA Order Form v4.4 1104

Exhibit C

Complete List of Approved Sites and Client Applications as of Order Form Effective Date

(including all Syndicated Sites and Non-Hosted Syndicated Sites)

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Google Confidential Page 15 GSA Order Form v4.4 1104

EX-10.37

EXHIBIT 10.37

CERTAIN INFORMATION FROM THIS DOCUMENT HAS BEEN REDACTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST BY INFOSPACE, INC. UNDER 17 C.F.R. §§ 200.80(B)(4), 200.83 AND 240.24B-2 AND SUBMITTED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Amended and Restated Google Inc. Services Agreement

This Amended and Restated Google Services Agreement (“GSA”) is entered into by and between Google Inc., a corporation formed under the laws of Delaware (“Google”) and InfoSpace Sales LLC, a limited liability company formed under the laws of Delaware (“Customer”). This GSA shall be effective as of the date signed by both parties in the signature block below (the “GSA Effective Date”). Each Order Form (as defined below) shall be governed by this GSA and shall become effective on the date stated in such Order Form (“Order Form Effective Date”). This GSA and the corresponding individual Order Form into which this GSA is incorporated together constitute the “Agreement”. This Agreement amends and restates that certain Google Inc. Services Agreement dated as of August 23, 2002 (the “Original GSA”), as amended on December 30, 2003 (“Amendment One”), April 7, 2004 (“Amendment Two”) and August 18, 2004 (“Amendment Three”) and the corresponding individual Order Form into which the Original GSA was incorporated (the “Original Order Form”) (the Original GSA, the Original Order Form, Amendment One, Amendment Two and Amendment Three collectively referred to herein as the “Original Agreement”). The parties acknowledge and agree that as of the GSA Effective Date, this Agreement supersedes the Original Agreement and the Original Agreement shall have no further force or effect. Capitalized terms used but not defined herein shall have the meanings stated in the GSA.

1 General.

1.1 Services. This Agreement states the terms and conditions under which Google will provide and Customer may use certain services made generally available by Google (the “Services”). Such Services may be ordered by Customer and shall be provided by Google as identified on one or more separately stated Google order forms executed between the parties (individually referred to hereinafter as an “Order Form”). Subject to the terms and conditions of this Agreement, such Services shall be implemented at (i) the uniform resource locator(s) (each a “URL”) identified on the cover pages of the Order Form (including any successor URLs thereto), which list may be modified by Customer with Google’s prior written approval; (ii) any additional domain(s) in which Customer or Customer’s parent, InfoSpace, Inc. (“InfoSpace”) either directly or indirectly has more than a [*] interest and which Google approves in writing as part of the Site (iii) a Syndicated Site, Non-Hosted Syndicated Site or Directory Service Site, each as defined in Section 1.4.1 below, and (iv) a WebSearch Client Application and/or an AFS Client Application, as defined in Section 2.6 below; provided, however, that unless otherwise agreed upon by the parties in writing, each of [*] must be wholly owned by Customer and operated exclusively by Customer and/or a Syndicated Site. Further, except as otherwise set forth in this Agreement, each of (i), (ii) and (iii) is referred to herein as the “Site” and collectively as the “Sites”). Customer may modify or add additional URLs, domains, Syndicated Sites, Non-Hosted Syndicated Sites and Directory Service Sites as part of the Site for applicable Services upon [*] notice to Google and upon receipt of Google’s written approval, which approval shall not be unreasonably withheld and provided in accordance with and subject to the approval process set forth in Section 1.5.

Generally, the Services are comprised of Internet search services (“Search Services”) and/or AdSense Services (“AdSense Services”), as further described in the Order Form. For Search Services ordered, Google will [*] provide search results requested through queries entered by End Users (as defined below) on the Site, through approved Client Applications or through [*] approved in writing by Google and submitted by Customer to Google (“Query(ies)”) as set forth under the Agreement (“Search Results”). For AdSense Services ordered, Google will [*] to provide advertising results in response to Queries and/or [*] as set forth under the Agreement (“Advertising Results”). Certain Services may also include features which are identified by Google as “Beta” or are otherwise unsupported under Google’s then current technical documentation (“Beta Features”). [*]

Customer shall display Search Results and/or Advertising Results to End Users (as defined in the Order Form).

1.2 Support. In consideration of Customer’s payment to Google of the fees and/or revenue share listed on the Order Form for Search and/or AdSense Services, Google shall provide [*] technical support services to Customer in accordance with the support guidelines (“Support Guidelines”) located at the following URL: [*], or such other URL as Google may provide from time to time (“Support Site”). [*]. Prior to making any support request, Customer shall [*]. Thereafter, a technical employee of Customer designated in writing by Customer on the Order Form, or such other employee that Customer may designate from time to time with advance notice to Google (“Customer Contact”) may submit a support request to Google in writing via email to the applicable Google alias set forth in the Order Form, or such other email address that Google may provide with advance notice from time to time. Google reserves the right to change the Support Guidelines [*]. Under no circumstances shall Google be required to provide any support services, either directly or indirectly (e.g. through Customer), to [*].

1.3 Prohibitions and Restrictions.

1.3.1 Prohibited Actions. Customer shall not and shall not allow any third party, including [*], to:

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

1

Google Confidential

Amended and Restated Google Inc. Services Agreement

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

1.3.2 [*]. In addition to all other suspension and termination rights set forth in this Agreement, if Customer or any third party owner or operator of a Syndicated Site engages in any action or practice that [*], then Google may i) promptly notify Customer of such activity or practice and give Customer [*] to cease or correct any such activity or practice by Customer or third party owner or operator of a Syndicated Site, or ii) if such activity or practice is of such nature as to have resulted or likely result in [*], suspend and/or terminate Customer’s right to provide Search and/or Advertising Results to the offending Site [*]. Notwithstanding the above, in such cases where [*], Google will endeavor to provide Customer with [*]

1.3.3 Prohibited Content. No Site or approved Client Application shall contain any [*].

1.4 Third Party Distribution.

1.4.1 Syndicated Sites and Conditions to Permitted Distribution. With respect to any domain included in the definition of Site that is not owned by Customer, InfoSpace or an Affiliate (as defined below) (collectively, “Syndicated Sites”) and/or any Google approved Client Application (as defined in Section 2.6), Customer may provide access to the Services to such Syndicated Sites and/or through each approved Client Application (and may share any revenues received by Customer from Google with such Syndicated Sites) under the following conditions:

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A third party site shall be a Syndicated Site only upon receipt of Google’s written consent designating such third party site as a Syndicated Site, which consent shall be [*] granted only in response to a written request submitted by Customer to Google as set forth in Section 1.5. For purposes of this Agreement, an “Affiliate” means any entity that controls, is controlled by or is under common control with Customer or Infospace, where control means the beneficial ownership of more than [*] of either (i) the then outstanding shares of common stock of such entity; or (ii) the combined voting power of the then outstanding voting securities of such entity entitled to vote generally in the election of directors.

Notwithstanding the foregoing and subject to the terms and conditions set forth in this paragraph, Customer shall be permitted to provide WebSearch and AdSense Services to any Site and/or Syndicated Site hosted by Customer to which Customer provides [*], such as the Site located at the URL: [*] (each such Site and/or Syndicated Site a “Directory Service Site”). With respect to Syndicated Sites, Customer shall not be required to include in its written agreement with a Directory Service Site [*], provided, however, that Customer agrees that [*]. [*] In the event Customer desires to expand the services provided to a Directory Service Site to include any Search Service, Customer agrees that it shall at such time enter into a written agreement with such Directory Service Site that includes [*]

1.4.2 Distribution to [*] or a Non-Hosted Syndicated Site. Notwithstanding (b) and (c)(i) of Section 1.4.1 above but pursuant to all other terms and conditions set forth in this Section 1.4, Customer is hereby permitted to provide Search and/or Advertising Results to Non-Hosted Syndicated Sites (as defined below). As of the Order Form Effective Date, the Web site located at the URL: [*]. Customer (i) shall not be required to host on its servers pages of the Non-Hosted Syndicated Site that contain Search and/or Advertising Results and (ii) shall not be required to maintain [*] Customer represents to Google that it shall [*]. For purposes of clarification, Customer shall not be permitted to disclose or provide to any Non-Hosted Syndicated Site, and shall block any Non-Hosted Syndicated Site’s access to, [*]. Further, any protocol provided by Customer to any Non-Hosted Syndicated Site in connection with Search and/or Advertising Results shall be used exclusively for the purpose of delivering to and displaying Search and/or Advertising Results in HTML format on such Non-Hosted Syndicated Site and such protocol shall not be [*]. Customer shall not and shall require that all Non-Hosted Syndicated Sites do not make any other use of any such protocol, including but not limited to [*]. Customer shall further require that [*]. Each Non-Hosted Syndicated Site shall be considered a Syndicated Site for purposes of this Agreement and except as otherwise specifically provided for in this Agreement, all terms and conditions that apply to Syndicated Sites shall apply to all Non-Hosted Syndicated Sites. “Non-Hosted Syndicated Site” shall mean a third party site that is not hosted on Customer’s servers but to which Customer is permitted to provide Search and/or Advertising Results. A third party site shall be a Non-Hosted Syndicated Site for purposes of this Agreement only upon receipt of Google’s written consent designating such third party site as a Non-Hosted Syndicated Site, which consent shall be [*] granted only in response to a written request submitted by Customer to Google as set forth in Section 1.5.

[*] is permitted to display Search and/or Advertising Results on a Results Page generated by Customer’s toolbar Client Application, the user interface of which shall be [*] Exhibit A attached hereto (“[*] Toolbar”). [*] shall be permitted to vary the [*] logo displayed on the upper left side of the [*] Toolbar but in all other respects the user interface of the [*] Toolbar shall not be altered or modified without Google’s prior written approval. [*] acknowledges and agrees that at no time shall any Google Brand Features be displayed in or on the [*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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Toolbar or on any Results Page generated by the [*] Toolbar without Google’s prior written consent.

1.4.3. Suspension and Termination of a Syndicated Site. In the event Customer learns of a breach by a Syndicated Site of (i) any of the terms and conditions set forth in Section 1 of Schedule A hereto (or Section 1 of Schedule B hereto in the case of a Non-Hosted Syndicated Site), [*] or (ii) any terms and conditions set forth in this Agreement applicable to Syndicated Sites, including without limitation, Section 1.3.1 (Prohibited Actions), Section 1.6 (Implementation) and Section 7 (Confidentiality), Customer shall [*]. If the breach is [*] and Google has [*], Customer shall promptly suspend such Syndicated Site’s right to access and use the Services and Google will immediately deactivate such Syndicated Site’s access to the Services, [*]. [*] Further, if in Google’s reasonable discretion, [*], then Google, in its sole and reasonable discretion and in addition to any other rights set forth in this Agreement, shall have the right to [*] suspend and/or terminate Customer’s right to provide Search and/or Advertising Results to such Syndicated Site. Customer further acknowledges that if the Agreement between Customer and Google terminates or expires, each and every Syndicated Site’s right to use, display and/or access the Services shall cease, and all rights granted to Customer pursuant to this Agreement to distribute the Services to Syndicated Sites shall also cease.

In addition, Customer shall be permitted to cease providing Services to a Syndicated Site [*] if (i) Customer reasonably believes that a Syndicated Site is [*]. For the avoidance of doubt, if Customer terminates the delivery of Google’s Services to a Syndicated Site pursuant to the preceding sentence, Customer must terminate the delivery of [*] to such Syndicated Site and Customer may not [*]. Upon such termination, the terminated Syndicated Site shall no longer be a Syndicated Site or part of the Site.

1.5 Approval Process. [*]

1.6 Implementation. Customer shall ensure that there is no use of or access to any Services through Customer’s properties which are not in compliance with the terms of this Agreement or not otherwise approved by Google. Customer shall monitor and disable any such access or use by [*] (including, but not limited to, spammers or any third party sites). Google may send uncompensated test queries to the Site(s) at any time to verify compliance with the implementation requirements contained in this Agreement.

2 Ownership; License Grants.

2.1 Google Rights. Google and/or its licensors own all right, title and interest, including without limitation all Intellectual Property Rights (defined below), related to the Services (and any derivative works or enhancements thereof), including but not limited to technology, software, information, content, materials, guidelines, documentation, the Google Data Protocol, Google Brand Features (as defined below), which include GOOGLE, the Google logo, other marks that incorporate the word “GOOGLE,” PAGERANK, ADRANK, ADWORDS, ADWORDS SELECT and such other trademarks as Google may secure during the Term, whether used by Google and/or Customer. Customer shall not acquire any right, title, or interest therein, except for the limited use rights expressly set forth in this Agreement. Any rights not expressly granted herein are deemed withheld. For the purposes of this Agreement, “Intellectual Property Rights” means any and all rights existing from time to time under patent law, copyright law, semiconductor chip protection law, moral rights law, trade secret law, trademark law, unfair competition law, publicity rights law, privacy rights law, and any and all other proprietary rights, and any and all applications, renewals, extensions and restorations thereof, now or hereafter in force and effect worldwide. “Brand Features” means the trade names, trademarks, service marks, logos, and other distinctive brand features of each party respectively. The parties acknowledge and agree that Customer’s use of the Services as contemplated and provided for hereunder shall not, for the purposes of this Agreement, constitute a derivative work or enhancement of the Services and Google shall not and does not receive, obtain or otherwise hereby acquire any right, title or interest in or to any of Customer’s products or services, including without limitation Customer’s metasearch technology or the design, compilation, features and display of multiple results on any Results Page, and including without limitation all Intellectual Property Rights therein, other than Google’s sole ownership and interest in the Services and Google Results [*] and provided hereunder.

2.2 Customer Rights. Customer and/or Customer’s licensors or other applicable third party providers own all right, title and interest, including without limitation all Intellectual Property Rights in and to all Customer’s products and services (excluding the Services provided by Google), technology, software, information and Customer Content (defined below) (collectively “Customer Property”). Google shall not acquire any right, title or interest in or to any Customer Property, except for the limited use rights in Customer’s Brand Features and Confidential Information as provided herein. Any rights not expressly granted herein are deemed withheld. “Customer Content” means any editorial, text, graphic, audiovisual, and other content and material that is served to End Users of the Site(s) or approved Customer Client Application(s) and that is not provided by Google hereunder.

2.3 License Grants; Brand Features. Google grants to Customer a nonexclusive and [*] license during any applicable Services Term (as defined below) to: (a) access Google’s servers to transmit Queries via the appropriate Google Protocol and access the Google Administrative Console, (b) access Google’s servers to [*] the Services and WebSearch Results and/or Advertising Results on Customer’s servers on the Sites in accordance with and subject to the terms and conditions set forth herein, (c) sublicense the right to third party owners and operators of the Syndicated Sites to [*] the Services and WebSearch Results and/or Advertising Results provided hereunder solely in connection with and as part of [*] on such third party’s servers on the Non-Hosted Syndicated Sites in accordance with and subject to the terms and conditions set forth herein, (d) use the Google Data Protocol solely for the purpose of communicating information between the Site and approved Client Applications and Google; and (e) display Google Brand Features for the sole purpose of [*] (provided that any such use is consistent with the Guidelines then in effect) and fulfilling its obligations under the Agreement. Customer grants to Google and Google grants to Customer, a nonexclusive and [*] license during any Services Term to include the other party’s (and in Customer’s case,

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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InfoSpace’s) name and logo in presentations, marketing materials, customer lists, and Web site listings of customers. Each party will submit all materials of any kind containing the other party’s (including InfoSpace’s) Brand Features (other than in customer lists) to the other party for approval prior to release to the public. Except as set forth in this Section, nothing in the Agreement shall be deemed to grant to one party any right, title or interest in or to the other party’s Brand Features. All use by Google of Customer or InfoSpace’s Brand Features (including any goodwill associated therewith) shall inure to the benefit of Customer and all use by Customer of Google Brand Features (including any goodwill associated therewith) shall inure to the benefit of Google. At no time shall one party challenge or assist others to challenge the Brand Features of the other party (except to the extent this restriction is prohibited by applicable law) or the registration thereof by the other party, nor shall either party attempt to register any Brand Features or domain names that are confusingly similar to those of the other party.

2.4 Attribution. Attribution guidelines are outlined in the Order Form Terms and Conditions.

2.5 Data. Google owns all right, title, and interest in and to [*] it collects, including but not limited to [*] collected in connection with the AdSense Program; except to the extent any such [*] is Customer’s Confidential Information and provided that Google shall treat any information and metrics that are [*] as confidential and proprietary information as between the parties and governed by the NDA (as defined in the GSA). If [*], Google shall provide Customer with such information and metrics as may be reasonably requested by Customer to assist Customer in complying with its obligations under this Agreement and to [*] use of the Services on the Sites. Customer owns all right, title, and interest in and to [*] collected by Customer on the Site(s).

2.6 Client Applications. Customer’s Client Application(s) set forth on the cover page(s) of the Order Form are hereby approved by Google for purposes of sending Queries for Search Services and/or AdSense Services to resolve to Results Pages on the Sites; provided that, at all times during any Term, Customer and Customer’s Client Application(s) will comply with the Guidelines and Google’s Client Application Guidelines, the current form of which is attached hereto as Exhibit B, as such Client Application Guidelines may be updated by Google from time to time pursuant to this Agreement, provided that Google provides Customer with written notice of such updated Guidelines and/or Client Application Guidelines and [*] to comply with such updates, but not to exceed [*]. Customer represents and warrants that [*]. The list of approved Client Applications may be updated from time to time subject to Google’s prior written consent, which approval [*] in accordance with and subject to Section 1.5. For purposes of this Agreement, (i) “Client Application” means any application, plug-in, helper, component or other executable code that runs on user’s computer; examples of Client Applications include those that provide instant messaging, chat, email, data, file viewing, media playing, file sharing, games, internet navigation, search and other services; and (ii) “WebSearch Client Application,” or “AFS Client Application” (as used herein or in the Order Form) means those Customer Client Applications that have been approved by Google to access the WebSearch or AFS Services, respectively, either as reflected on the cover page(s) of the Order Form or as otherwise approved by Google in writing from time to time during the Services Term.

Upon a breach of any provision of this Section 2.6 with respect to approved Client Applications, Google shall [*] and, if the breach is [*], Google shall have the right, in addition to any other remedies available at law or equity, to [*].

3. Exclusivity.

3.1 General. Google will provide the Services on a nonexclusive basis to Customer. Google understands that Customer will accept the Services on a nonexclusive basis, and that Customer may accept services similar to the Services (and display search results, advertisements and other information in connection therewith on one or more Sites, subject to Section 3.2 below) from one or more third parties, including, without limitation any competitors of Google.

3.2 [*].

3.2.1. [*]

3.2.2. [*]

3.2.3. [*]

3.3 Future Products/Services. With respect to any new Web sites on which Customer intends to implement search and/or advertising services substantially similar to the Services provided hereunder, and any new or modified services substantially similar to the Services provided hereunder that Google makes commercially available for syndication subject to its own terms and conditions, each party agrees [*]

4. Warranties and Disclaimer. Each party warrants that it has full power and authority to enter into this Agreement. Customer represents and warrants that: [*] Google does not warrant that the Services will meet all of Customer’s requirements or that performance of the Services will be uninterrupted or error-free. NEITHER PARTY MAKES ANY OTHER WARRANTY OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR USE, AND NONINFRINGEMENT.

5. Indemnification.

5.1 Google Indemnification. Subject to the provisions of Section 5.2 below, Google will indemnify, defend and hold harmless Customer, Customer’s Affiliates that own or control any of the Sites hereunder and their respective officers, employees and directors against [*]. Notwithstanding the foregoing, in no event shall Google have any obligations or liability under this Section 5 arising from [*].

5.2 [*]

5.3 Customer Indemnification. Customer will indemnify, defend and hold Google harmless against [*].

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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5.4 Indemnification Procedure. Each party’s indemnification will include (1) all damages and costs (including reasonable attorneys fees) finally awarded or (2) any settlement costs approved by the indemnifying party. The indemnifying party may not settle any claim hereunder that creates any obligation or otherwise affects the indemnified party’s rights without the indemnified party’s prior written approval. The indemnification obligations hereunder shall exist only if the indemnified party: (i) promptly notifies the indemnifying party of such claim, (ii) provides the indemnifying party with reasonable information, assistance and cooperation in defending the lawsuit or proceeding (which information, assistance and cooperation shall be provided at the indemnifying party’s sole cost and expense, and (iii) gives the indemnifying party full control and sole authority over the defense and settlement of such claim. The indemnified party may join in defense with counsel of its choice at its own expense. After the indemnifying party assumes responsibility for an indemnified claim hereunder, the indemnifying party shall only indemnify the indemnified party for expenses incurred by the indemnified party upon the indemnifying party’s request or with the indemnifying party’s prior written approval. Failure to give timely notice will not preclude indemnification except to the extent that such failure actually prejudices the indemnifying party.

6. Limitation of Liability. EXCEPT FOR [*], (A) NEITHER PARTY WILL BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO DAMAGES FOR LOST DATA, LOST PROFITS, LOST REVENUE OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY, INCLUDING BUT NOT LIMITED TO CONTRACT OR TORT (INCLUDING PRODUCTS LIABILITY, STRICT LIABILITY AND NEGLIGENCE), AND WHETHER OR NOT SUCH PARTY WAS OR SHOULD HAVE BEEN AWARE OR ADVISED OF THE POSSIBILITY OF SUCH DAMAGE AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY STATED HEREIN and (B) (i) IN NO EVENT SHALL GOOGLE’S AGGREGATE LIABILITY FOR ANY CLAIM ARISING OUT OF THIS AGREEMENT (WHEN AGGREGATED WITH GOOGLE’S LIABILITY FOR ALL OTHER CLAIMS ARISING OUT OF THIS AGREEMENT) EXCEED THE NET AMOUNT GOOGLE HAS ACTUALLY RECEIVED AND RETAINED (AFTER ACCOUNTING FOR ALL DEDUCTIONS, PAYMENTS TO CUSTOMER AND OTHER OFFSETS PROVIDED FOR UNDER THE AGREEMENT) [*], and (ii) IN NO EVENT SHALL CUSTOMER’S AGGREGATE LIABILITY FOR ANY CLAIM ARISING OUT OF THIS AGREEMENT (WHEN AGGREGATED WITH CUSTOMER’S LIABILITY FOR ALL OTHER CLAIMS ARISING OUT OF THIS AGREEMENT) EXCEED THE NET AMOUNT CUSTOMER HAS RECEIVED FROM GOOGLE [*]. NOTWITHSTANDING ANYTHING IN THIS SECTION 6 TO THE CONTRARY, WITH RESPECT TO GOOGLE’S INDEMNITY OBLIGATIONS [*]. The parties agree that (i) the mutual agreements made in this section reflect a reasonable allocation or risk, and (ii) that each party would not enter into this Agreement without these limitations on liability. Notwithstanding anything to the contrary set forth above, none of the foregoing limitations set forth in this Section shall apply to Customer’s liability arising out of a breach of this Agreement by a Syndicated Site.

7. Confidentiality. Use and disclosure of proprietary information disclosed under this Agreement, including the existence and content of this Agreement and any reports provided hereunder, shall be governed by the terms of the Google Standard Mutual Non-Disclosure Agreement (“NDA”), the date of which is provided in the Order Form, which has been provided to Customer and executed prior to or concurrently with this Agreement, and which is incorporated herein by reference. Defined terms used in this Section 7 shall have the meanings given in the NDA. In addition to the terms and conditions set forth in the NDA, the following additional terms shall apply:

7.1 Confidential Information. The Receiving Party will have a duty to protect such Confidential Information disclosed to it by a Disclosing Party: (a) if it is clearly and conspicuously marked as “confidential” or an equivalent designation; (b) if it is identified by the Disclosing Party as confidential or proprietary before, during, or promptly after presentation or communication; or (c) if it is disclosed in a manner in which the Disclosing Party reasonably communicated, or the Receiving Party should reasonably have understood under the circumstances that the disclosure should be treated as confidential, whether or not the specific word or mark “confidential” is used.

7.2 Metrics Provided by Google. Notwithstanding anything in this Agreement to the contrary, Customer agrees and acknowledges that any metric provided by Google to Customer relating to the Services (including without limitation any information obtained through the Google Admin Console): [*]. Customer also agrees and acknowledges that, except as provided below, under no circumstances shall any Google Confidential Information be disclosed to any third party without Google’s prior written approval, including without limitation, to [*]. Notwithstanding the above, nothing herein shall prohibit Customer from providing each [*] with the following information relevant to [*] (but not for [*]): [*]. For purposes of illustration only, Customer shall be permitted to disclose [*].

7.3 Performance Information. Google acknowledges and agrees that [*] (together the “Performance Information”), whether or not marked as such, shall be Confidential Information and shall be subject to all restrictions set forth in this Agreement and shall [*]. For purposes of clarification, Google is prohibited from disclosing any or all of the Performance Information to a third party.

8. Term and Termination.

8.1 Term. The term of this Agreement shall commence on October 1, 2005 and shall continue through March 31, 2009 (the “Initial Term”), unless earlier terminated as provided herein. The Initial Term and any subsequent renewal terms shall be referred to herein as the “Term.”

8.2 Suspension and Termination.

8.2.1 Mutual Rights. Either party may suspend performance and/or terminate this Agreement: (a) if the other party materially breaches any material term or condition of this Agreement and fails to cure such breach [*] after receiving written notice thereof; (b) if the other party becomes insolvent or makes any assignment for the benefit of creditors or similar transfer evidencing insolvency, or suffers or permits the commencement of any form of insolvency or receivership

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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proceeding, or has any petition under bankruptcy law filed against it, which petition is not dismissed [*] of such filing, or has a trustee or receiver appointed for its business or assets or any part thereof, or (c) [*] following the occurrence of a Change in Control Transaction as set forth in Section 10.2 hereof with respect to [*] (including any affiliates thereof and/or any successors or assigns) provided that the suspending or terminating party gives notice of such intent to suspend or terminate [*] of the public announcement of such Change of Control Transaction.

8.2.2. Google Rights. Notwithstanding the foregoing, Google may [*]. For purposes of clarification, the breaches that trigger the termination rights set forth in the preceding sentence are those material breaches by Customer other than those triggered by actions or inactions of a third party, including [*]. In addition, if Customer has breached the Agreement as a result of [*], Google may immediately terminate all of Customer’s rights to provide access to the Services to [*]. Google may also suspend and/or terminate this Agreement if Google reasonably determines that [*].

8.2.3 Customer Rights. Customer may suspend use of the Services, suspend the display of WebSearch Results and/or Advertising Results on the Site or terminate this Agreement [*] upon [*] notice if Google [*] breaches [*] set forth under this Agreement. Further, Customer may, upon written notice to Google, [*]. If, following a period of suspension of not less than [*], Customer reasonably determines [*], Customer may, upon [*] notice to Google, permanently terminate use of the Services in such geographic region only.

8.3 Upon the expiration or termination of this Agreement for any reason (i) all license rights granted herein shall terminate; (ii) Customer shall [*] pay to Google all amounts due as of the date of such termination and Google shall [*] pay to Customer all amounts due as of the date of such termination; (iii) each party shall return to the other party, or destroy and certify the destruction of, all Confidential Information of the other party; and (iv) Customer will promptly remove from the Site(s): the AdWords Link, the Attribution Graphic and all Google Brand Features and (v) all Syndicated Sites’ and Customer Client Applications’ access and use of the Services shall terminate.

9. Tax and Audit.

9.1 Taxes and Other Charges. All payments under the Agreement are exclusive of taxes imposed by any governmental entity. Customer shall pay any applicable taxes, including sales, use, personal property, value-added, excise, customs fees, import duties or stamp duties or other taxes and duties imposed by governmental entities of whatever kind and imposed with respect to the transactions for services provided under the Agreement, including penalties and interest, but specifically excluding taxes based upon Google’s net income. When Google has the legal obligation to collect any applicable taxes, the appropriate amount shall be invoiced to and paid by Customer [*] from the date of invoice or other notification. Customer shall promptly provide Google with such documentation as may be required by the applicable governmental entity in order for Google to process payments hereunder (including, without limitation, a valid certificate of Customer’s exemption from obligation to pay taxes as authorized by the appropriate governmental entity), and Google may withhold any payments required to be made hereunder until Customer has provided such documentation. Customer shall promptly provide Google with original or certified copies of all tax payments or other sufficient evidence of tax payments at the time such payments are made by Customer pursuant to the Agreement.

9.2 Audit Right. In the event that Customer believes a discrepancy exists in the fees due under this Agreement, Customer will notify Google in writing and Google and Customer shall work together in good faith to resolve such discrepancy, if any. If Customer is not satisfied with such informal resolution, Customer, at its own expense, may retain a mutually acceptable nationally recognized independent auditor to review and audit Google’s relevant records to confirm the fees due under this Agreement upon [*] notice. Such audit shall: (a) be subject to Google’s reasonable security and confidentiality requirements; (b) occur no more than [*] every calendar year and not during [*]; and (c) transpire during Google’s normal business hours. If the audit results in an adjustment greater than or equal to [*] of the fees due for the audited period (but excluding situations where Google has overpaid Customer), then Google shall pay for the reasonable costs associated with such audit.

10. Miscellaneous.

10.1 Notices. All notices shall be in writing sent to the addresses identified on the Order Form or to such other address provided in writing for such notice purposes. Notice shall be deemed given (i) upon receipt when delivered personally, (ii) upon written verification of receipt from overnight courier, or (iii) upon verification of receipt of registered or certified mail.

10.2 Assignment. [*] may assign its rights or delegate its obligations hereunder without [*] prior written consent, except to the surviving entity in a merger or consolidation or to a purchaser of all or substantially all of its assets, provided that such surviving entity or purchaser shall expressly agree in writing to be bound by all of the terms of this Agreement and provided further that such entity or purchaser is not a restricted entity as set forth on Exhibit C hereto, as such Exhibit C may be updated by Google from time to time but no more frequently than once per quarter (each listed entity a “Restricted Entity”). In the event of a Change of Control Transaction involving Customer or InfoSpace in which this Agreement is not assigned to the third party involved in such Change of Control Transaction (such third party a “Combining Entity”), irrespective of the structure of such Change of Control Transaction, Google shall have the right to terminate this Agreement as set forth in Section 8.2.1(c) if the Combining Entity is either of [*] (including any affiliates thereof and/or any successors or assigns). Further, in the event that Customer or InfoSpace enters into a Change of Control Transaction with a Combining Entity that is a Restricted Entity other than [*], such Combining Entity may in no way avail itself of any of the Services or benefits provided to Customer by Google pursuant to this Agreement, without Google’s prior written approval. For the avoidance of doubt, following a Change of Control Transaction with a Restricted Entity (other than [*], irrespective of the structure of such Change in Control Transaction, Google shall continue to provide Services pursuant to this Agreement only to the Site and those Syndicated Sites and Non-Hosted Syndicated Sites receiving

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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the Services immediately prior to such Change in Control Transaction. Google agrees that it shall not update Exhibit C to include any entity with which Customer has previously publicly announced its intention to enter into a Change of Control Transaction. For purposes of this Agreement, a “Change of Control Transaction” shall be defined as (a) the public announcement of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of a party or (b) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of beneficial ownership (within the meaning of Rule 13(d)(3) promulgated under such Act) of more than [*] of either (i) the then outstanding shares of common stock of such party; or (ii) the combined voting power of the then outstanding voting securities of such party entitled to vote generally in the election of directors.

10.3 No Third Party Beneficiaries. This Agreement is not intended to benefit, nor shall it be deemed to give rise to, any rights in any third party.

10.4 Equitable Relief. Either party may seek equitable relief, including temporary restraining order(s) or injunction, in addition to all other remedies, for breach or threatened breach of Section 2 (Ownership; License Grant) or Section 7 (Confidentiality).

10.5 Consultation. Before either party initiates legal action against the other arising from this Agreement (other than to seek injunctive or other equitable relief), the matter in controversy will first be referred to an officer of each party, who shall make reasonable efforts to resolve the matter [*] of the date of referral.

10.6 Governing Law. The laws of [*], excluding [*] choice of law rules, and applicable federal U.S. laws shall govern this Agreement. The parties specifically exclude from application to this Agreement the United Nations Convention on Contracts for the International Sale of Goods and the Uniform Computer Information Transactions Act.

10.7 Independent Contractors. The parties are independent contractors. Neither party shall be deemed to be an employee, agent, partner or legal representative of the other nor shall either have any right or authority to create any obligation on behalf of the other.

10.8 Force Majeure. Neither party shall be liable for failing or delaying performance of its obligations (except for the payment of money) resulting from any condition beyond its reasonable control, including but not limited to governmental action or acts of terrorism, earthquake or other acts of God, labor conditions, and power failures. [*].

10.9 Compliance with Laws. Each party shall comply with all applicable laws, rules and regulations, if any, required in performing its obligations hereunder.

10.10  No Waiver. The failure to require performance of any provision shall not affect a party’s right to require performance at any time thereafter; nor shall waiver of a breach of any provision constitute a waiver of the provision itself.

10.11  Severability. If any provision is held by a court to be contrary to law, such provision shall be interpreted so as to best accomplish its objectives and the remaining provisions shall remain in full force and effect.

10.12  Survival. In the event of any termination or expiration of this Agreement, Sections 1.3, 2.1, 2.2, 2.5, 4, 5, 6, 7, 8, 9.1, 10, the NDA and all terms and conditions of any Order Form(s) shall survive termination. Neither party shall be liable to the other for damages resulting solely from terminating this Agreement as provided herein.

10.13  Entire Agreement. This GSA and related Order Form(s), and any exhibits thereto, constitute the entire agreement with respect to the subject matter hereof and any related purchase order(s) shall be null and void.

10.14  Counterparts, Drafting, Amendments. This Agreement may be executed in counterparts, each of which will be deemed an original, and all of which together constitute one and the same instrument. To expedite the process of entering into this Agreement, the parties acknowledge that executed copies of the Agreement that are reproduced or transmitted via facsimile will be equivalent to original documents until such time as original, executed documents are completely executed and delivered. This Agreement supersedes any other prior or collateral agreements with respect to the subject matter hereof. Any amendments to this Agreement must (i) be in writing; (ii) refer to this Agreement; and (iii) be executed by an authorized representative of each party. This Agreement shall be construed as if both parties jointly wrote it.

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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IN WITNESS WHEREOF, the parties have executed this GSA by persons duly authorized as of the GSA Effective Date set forth below.

Google: GOOGLE INC.		Customer: InfoSpace Sales LLC
By:	/s/ Joan Braddi	By:	/s/ James Voelker
Print Name:	Joan Braddi	Print Name:	James Voelker
Title:	VP, Search Services	Title:	CEO
Date: October 1, 2005		Date: October 1, 2005

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Exhibit A

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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Exhibit B

Form of Client Application Guidelines

Policy Guidelines for Access of Google Services Through Client Applications

Effective Date: October 1, 2005

Google has observed a significant increase in the number of reports of software that is engaging in deceptive, malicious and other annoying practices that significantly diminish user perception and enjoyment of the internet. These practices include but are not limited to installing software on computers without obtaining informed end user consent (the so-called “drive-by download”), inundating end users with advertisements without adequate attribution or labeling, exposing users to pornographic material without obtaining informed end user consent, obtaining or transmitting personal information about an end user without obtaining informed end user consent, and interfering with an end user’s ability to easily uninstall applications the end user does not wish to be on his or her computer.

Google does not wish to be associated with these types of practices. Accordingly, Google has developed the Guidelines set forth below to prevent its trademark, other intellectual property, and services from being used in connection with these practices. Google believes that these Guidelines are necessary to protect Google from any allegation that it has contributed to practices that might be viewed as unlawful or actionable; to preserve the reputation of Google as a provider of trusted software and services in a manner that is beneficial and fair to users and other constituents; and to stem the rising incidence of practices that harm users and diminish the perceived value and reliability of the internet, which are essential to Google’s business.

With this objective in mind, Google has established the following Guidelines to apply to customer Applications that are used to access our search and/or advertising syndication services. Except to the extent Google has otherwise specifically agreed in writing, Google does not grant permission to, and you will not, access Google services using one or more of your Applications unless you ensure that those Applications comply with these Guidelines. Examples of accessing Google services in this context include Applications that send end user queries or other information to Google to generate search or ad results, or Applications that alter browser or other application settings to permit error traffic to be sent to Google to generate search or ad results.

For the avoidance of doubt, by these Guidelines Google does not intend to, and does not, impose any restrictions on what you may do with any Application that is not used to access, or is not bundled with any Application that is used to access, Google services; you remain free to sell any Application you wish (whether or not it complies with these Guidelines) so long as it is not used to access Google services.

In these Guidelines: (a) “you” and “your” refer to the legal entity(ies) that has entered into the contract with Google into which these Guidelines are incorporated, as well as any person or entity acting on your behalf; and (b) “Application” means any application, plug-in, helper, component or other executable code that runs on a user’s computer, examples of which include those that provide browser helper objects, instant messaging, chat, email, data, file viewing, media playing, file sharing, games, internet navigation, search and other services.

Google welcomes input about these Guidelines from you and from other interested parties, and is always willing to consider revisions as appropriate to encourage innovation while protecting against deceptive, unfair and harmful practices. Accordingly, Google may update these Guidelines, including the Exhibits, from time to time as provided in Section 10 below.

If you have any questions about these Guidelines, please do not hesitate to discuss them with your Google account manager.

1. General.

1.1. Approval and Ongoing Compliance. [*]. In such instance, you must ensure that your Application both (1) has been approved by Google for the purpose of accessing Google services in writing in advance, and (2) complies at all times with the requirements outlined herein. To obtain Google’s approval for any Applications not expressly approved in your agreement, you must submit a written request.

1.2. Implementation. The incorporation of Google services into your Application must conform to the implementation requirements set forth in your agreement with Google. For example, in the case of Applications that access Google’s WebSearch and/or AdSense for Search Services, end user queries initiated from your Application must resolve to a Google-approved Web page on a permitted Web site as provided in your agreement with Google (refer to your agreement for a complete description of the scope of approved Web pages and sites). In any event, unless your agreement with Google expressly authorizes otherwise, Google results may only appear on the Web pages expressly approved by Google for such display, and, except for the display of those pages in the main content area of a Web browser, Google results may not appear anywhere in your Applications (e.g., Google results may not appear in the “chrome” of your Application unless your agreement expressly contemplates otherwise).

1.3. No Google Branding or Attribution. Your Application, and any related collateral material (including any Web pages promoting your Application or from which your Application is made available), must not contain any Google branding, trademarks or attribution unless (and then only to the extent) Google expressly consents otherwise in writing. In addition, queries entered into Applications may not resolve to a results page that contains any Google branding, trademarks or attribution unless (and then only to the extent) Google expressly consents otherwise in writing.

2. Prohibited Content. You may not access Google services from an Application that: (a) contains any viruses, worms, trojan horses, or the like; and (b) is distributed primarily for the purpose of (i) distributing pornographic, obscene, excessively profane, gambling-

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Amended and Restated Google Inc. Services Agreement

related, deceptive, fraudulent or illegal content, or (ii) distributing content related to “hacking” or “cracking.”

3. Prohibited Behavior. You may not access Google services from an Application that engages in deceptive, unfair, harassing or otherwise annoying practices. For example, the Application may not:

(a) use, or permit an unaffiliated person to use, an end user’s computer system for any purpose not understood and affirmatively consented to by the end user (including, without limitation, for purposes of consuming bandwidth or computer resources, sending email messages, launching denial of service attacks, accruing toll charges through a dialer or obtaining personal information from an end user’s computer such as login, password, account or other information personal to the end user);

(b) intentionally create or exploit any security vulnerabilities in end user computers;

(c) trigger pop-ups, pop-unders, exit windows, or similar obstructive or intrusive functionality, that materially interfere with an end user’s Web navigation or browsing or the use of his or her computer;

(d) repeatedly ask an end user to take, or try to deceive an end user into taking, an action that the end user has previously declined to take (such as repeatedly asking an end user to change his or her home page or some other setting or configuration);

(e) redirect browser traffic away from valid DNS entries (except that your Application may direct unresolved URLs to an alternative URL designated by you, provided that the page to which the end user resolves adequately informs the end user that you and your Application are the source of that page);

(f) interfere with the browser default search functionality (except that your Application may permit an end user to change his or her default search engine with proper disclosure, consent and attribution as provided below); or

(g) engage in activity that violates any applicable law or regulation.

4. Disclosure and Consent.

4.1. Disclosure and Consent before Installation. You may not access Google services from Any Application unless you and your distribution and bundling partners design the installation of your Application in a manner that ensures that it is installed by end users in a knowing and willful manner – e.g., no “drive-by” downloads or installs. By “distribution partner” we mean any third party who distributes your Application and by “bundling partner” we mean any third party who installs your Application in combination with or alongside one or more other Applications. At a minimum, compliance with this provision requires that, prior to installing your Application, you and any third party distributing or bundling your Application:

(a) first, fully, accurately, clearly and conspicuously disclose to end users:

(i) that they are installing an application,

(ii) the name of the Application, identifying you as the entity responsible for it, and

(iii) the principal and significant features and functionality of the Application; and

(b) then, obtain the end user’s affirmative consent to install the Application.

Notwithstanding the foregoing, the disclosure and consent requirements of this Section 4.1 will not apply to those of your Applications that are installed on computers prior to sale.

4.2. Disclosure and Consent for Collection and Transmission of Personally Identifiable Information. You may not access Google services from any Application that (1) collects or transmits to any entity other than the end user personally identifiable information, or (2) collects or transmits information related to a user’s computer or Internet usage or activity in a manner that could collect or transmit such user’s personally identifiable information (such as through keystroke logging), unless prior to the first occurrence of any such collection or transmission you:

(a) first, fully, accurately, clearly and conspicuously disclose:

(i) the type of information collected (described with specificity in the case of personally identifiable information),

(ii) the method of collection (e.g., by registration, etc.), and

(iii) the location of (i.e., a link to) the privacy policy that governs the collection, use and disclosure of the information; and

(b) then, obtain the end user’s affirmative consent to such collection and/or transmission.

4.3. Disclosure and Consent for Setting Changes. You may not access Google services from any Application that makes a change to any operating system or Application data setting which will impact the user experience of other Applications (e.g., changing the browser default home page or changing the default application for a file type, such as the default email, browser or media player application), unless prior to making such change you:

(a) first, fully, accurately, clearly and conspicuously disclose the change in a manner that will explain the practical effect of such change; and

(b) then, obtain the end user’s affirmative consent to make such change.

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Notwithstanding the foregoing, (i) no disclosure and consent need be made for changes to operating system or Application data settings that have only a minor impact on user experience, such as adding a small number of bookmarks to the browser menu or adding an item to a start menu, and (ii) the disclosure and consent requirements of this Section 4.3 will not apply to those setting changes that may be made prior to sale to the end user.

4.4. Method of Disclosure and Consent. In order to satisfy the requirements above, the disclosure of the items specified above (a) must be provided in both (1) the End User License Agreement (EULA) or privacy policy (to the extent required by law or otherwise by industry custom) and (2) separately from the EULA and/or privacy policy (e.g., in installation screens or message boxes, as the case may be), and (b) must be designed so that it will be read by, adequately inform and evidence the consent of a typical Internet user. See Exhibit A for sample disclosure and consent implementations that would satisfy certain of the requirements above.

4.5. EULA and Privacy Policy. You may not access Google services from any Application unless it conforms, and is distributed pursuant to a EULA that conforms, with all applicable laws and regulations. In addition, you and your Application must comply with the agreements and representations you make with your end users in your EULA and privacy policy. Your privacy policy must be accessible from your Application in an easily found location. If your Application collects or transmits any other information related to the user’s use of his or her computer, but not required to be disclosed and consented to pursuant to Section 4.2, then the collection and use of such other information must be disclosed in your privacy policy.

5. Transparency. Neither you nor any of your third party distribution or bundling partners may mislead end users or create end user confusion with regard to the source or owner of an Application or any portion of its purpose, functionality or features. For example, all elements of your Application that are visible to the end user must clearly identify their source through its branding and attribution, and that identification, whatever form it takes, must correspond to the identification of your application in the menu that permits end users to remove programs. You must clearly label advertisements provided by your Application (if any) as such and clearly identify your Application as the source of those advertisements. In addition, if your Application modifies the operation or display of other applications or Web sites (other than Web sites that you own), then in each instance you must clearly and conspicuously attribute the source of that modification to your Application (as distinct from the application or Web site modified) in a manner that will inform a typical Internet user; provided that this requirement will not apply to modifications for which you obtain disclosure and consent pursuant to Section 4.3. See Exhibit A for examples of modifications that are clearly and conspicuously disclosed to end users.

6. Deactivation. You may not access Google services from any Application that impairs an end user’s ability to change any preferences or settings set by the Application in accordance with the way that such preferences or settings ordinarily may be changed by the applicable Application. Once disabled by an end user, your Application may not be re-enabled without an affirmative action by the end user to explicitly re-enable your application. Accordingly, no use, update, installation or re-enablement of a separate Application, and no code downloaded as a result of browsing a Web site, may operate to re-enable your Application. Your Application must permit end users to uninstall it (in the customary place the applicable operating system has designated for adding or removing programs, e.g., Add/Remove Programs control panel in Windows) in a straightforward manner, without undue effort or skill. In addition, your Application, when running, must provide (in an easily found location) clear and concise instructions on how it may be uninstalled. Once uninstalled, your Application must not leave behind any functionality or design elements, and all setting changes made by the application, but not explicitly agreed to by the end user, should be reversed to the extent practicable.

7. Bundling of Applications.

7.1. Bundling. Your Application may be distributed through bundling arrangements (referring to the distribution of your Application in a “bundle” that installs your Application with one or more other Applications). However, in such case, you may not access Google services from any such Application unless each of the following requirements is satisfied:

(a) the end user is made aware of all of the Applications included in the bundle prior to any installation;

(b) all such Applications included in the bundle or download comply with the provisions of Section 2 through 6 of these Application Guidelines;

(c) if Applications in a bundle in which you are participating are supported in part by revenue generated by advertising displayed in another independent Application included in that bundle and the continued use of the Application is conditioned on such other independent Application remaining installed and active on the end user’s computer, the end user must be made aware of that relationship; and

(d) either (1) the bundle must provide for a master uninstaller that will enable the end user to uninstall every Application in the bundle without undue effort or skill, or (2) if no master uninstaller is provided, the de-installation of any Application may not be dependent or conditioned upon the de-installation of any other Application included in the bundle.

7.2. PC OEM.

7.2.1. Exhibit B Computers. [*]

7.2.2. Non-Exhibit B Computers. [*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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7.3. No Google Branding. [*]

7.4. General. When entering into any bundling arrangements, it is your responsibility to ensure that your direct and indirect distribution or bundling partners (and any applications included in any bundle with your Application to the extent required herein) comply with the applicable requirements of these Guidelines.

8. Information and Assistance. Subject to any confidentiality obligations owed to third parties, you must provide Google with such information as Google may reasonably request about the distribution of those of your Applications that are used to access Google services. For example, we may ask you to share with us: (a) the means by and/or the locations from which your Applications are distributed; or (b) the identity of any applications included in any of your bundling relationships (and the entities responsible for such applications). In addition, you must provide such assistance as Google may reasonably request to investigate and stop potential violations of these Guidelines that may be connected to your Application, including by way of using such number of identifiers and other tracking parameters as Google may reasonably request. This would include providing Google with “golden masters” of any bundle or other distribution that includes your Application, or working with Google to stop any entities that may be financially benefiting from your Application from engaging in any of these proscribed practices. You understand, however, that Google has no obligation to provide support to end users of your Application. For the avoidance of doubt, these information and assistance rights do not extend to any of your Applications that are not used to access Google services.

9. Legal. You must maintain ownership and control of your Application at all times to the extent required to practically and legally enforce the requirements of these guidelines. If you are seeking to permit a third party Application to incorporate or access our services, then you must also obtain Google’s written approval of that third party Application (in addition to the approval required for your Application). If Google approves the third party Application, you are responsible for ensuring that such third party Application also complies with these Guidelines. You agree to be responsible and liable for your Application’s access of Google’s results. Special indemnity and other suspension and/or termination provisions may apply. These are addressed in your agreement with Google.

10. Updates.

10.1. General. As mentioned above, Google may update these Guidelines, including the Exhibits, from time to time; provided, however, that no updates will be effective until Google provides you with [*] written notice thereof. Once you receive that notice, you will be required to bring your Application into compliance within [*].

10.2. Extended Compliance Period. If, solely as a result of an updated requirement, one or more of your Applications no longer complies with these Guidelines, as updated, and you are incapable of bringing such Application into compliance prior to the scheduled effective date of such update (the “Update Effective Date”), you agree to provide Google with written notice thereof as soon as reasonably practicable, but in any event no later than the Update Effective Date, identifying the Application and the reasons why it may not be brought into compliance prior to the Update Effective Date, and providing such other detail as Google may reasonably request with respect thereto (consistent in any event with your confidentiality obligations). Thereafter, the parties will consult, and you agree to will work, diligently and in good faith to develop and execute a plan to bring such Application into compliance with these Guidelines, as updated, as soon as reasonably practicable, but in any event within [*] of the Update Notice Date (the “Maximum Compliance Period”). You agree that you will provide Google with such information as Google reasonably requests during this period to keep Google apprised of your progress in bringing your Application into compliance. Notwithstanding the foregoing (but subject to the next sentence), in no event may a new requirement provided for in the update to these Guidelines require you to take any action which would violate the terms of any agreement between you and any unaffiliated third party that is in effect on the date that Google delivers notice of the proposed update. In any event, if you are unable to bring any Application into compliance during the Maximum Compliance Period, Google may elect, by providing at least [*] prior written notice, to cease providing services to either the specific non-conforming Application or to those versions of the Application which are, or are distributed, in violation of the Guidelines, as updated; it being understood that, at such time, you will be entitled to procure services from an alternative source for those Applications (or versions thereof) to which Google elects to cease providing services as provided herein.

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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Google Confidential

Amended and Restated Google Inc. Services Agreement

Exhibit A to Guidelines

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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Google Confidential

Amended and Restated Google Inc. Services Agreement

Exhibit B to Guidelines

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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Google Confidential

Amended and Restated Google Inc. Services Agreement

Exhibit C

List of Restricted Entities

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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Amended and Restated Google Inc. Services Agreement

Schedule A

Terms for Syndicated Sites

The following terms and conditions shall apply to Customer’s provision of AFS Ads to any Syndicated Site:

1. Syndicated Site Agreement Terms

Customer shall ensure that all agreements between Customer and Syndicated Sites contain provisions that include, at a minimum, terms and conditions substantially similar but no less protective of Google than the following terms and conditions:

a) [*]

b) [*]

c) [*]

d) [*]

e) [*]

f) [*]

g) [*]

h) [*]

i) [*]

j) [*]

k) [*]

l) [*]

m) [*]

n) [*]

o) [*]

With respect to Syndicated Sites which were approved by Google before Dec 30, 2003 (effective date of Amendment One of the Original Agreement which is no longer in effect), Customer shall [*] include the provisions set forth in this Section 1; provided, however, that Customer agrees to [*] such Syndicated Sites’ access and use of the Services as set forth in this Agreement. In the event a Syndicated Site does not agree to the provisions set forth in Sub-sections (e), (k) or (o) of this Section 1, then Google may, in its sole discretion and with prior written authorization (which shall include e-mail authorization) [*].

2. Customer agrees to [*] for all Syndicated Sites’ access and use of the Services and AFS Ads. Customer agrees to enforce the terms of the agreements required by this Agreement and to notify Google [*] of any known breach of such terms. Customer will defend and indemnify Google against: [*].

3. In the event of any Syndicated Site’s breach of any of the terms and conditions set forth in Section 1 of this Schedule, even if Customer fails to include such terms and conditions in an applicable agreement, and including those Syndicated Sites approved by Google before the Agreement Effective Date, Customer shall [*], and Google will [*]. If the Syndicated Site breach involves a breach [*], then Google, in addition to any other rights set forth in this Agreement, shall have the right to terminate Customer’s right to provide AFS Ads and or WebSearch Services to such Syndicated Sites. Additionally, if Google has reason to suspect a breach of [*], in addition to any other right under this Agreement, Google shall have the right to immediately suspend a Syndicated Site’s access to the Services [*].

4. With respect to Syndicated Sites, Google [*] assign each such Syndicated Site separate Client Names, and Customer shall ensure that such assigned Client Names are implemented. Google shall not be required to deliver Services to or create Client Names for any Syndicated Site that is not subject to an agreement that contains the terms set forth in Section 1 of this Schedule A. Google shall not be obligated to allow a Syndicated Site access to the Services until Customer provides Google with the following information: [*]. Google may revise the required information listed in the preceding sentence at its discretion upon written notice to Customer.

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

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Google Confidential

Schedule B

Terms for Non-Hosted Syndicated Sites

The following terms and conditions shall apply to Customer’s provision of AFS Ads to [*] or any Non-Hosted Syndicated Site:

1. Agreement Terms for [*] or any Non-Hosted Syndicated Site

Customer shall ensure that any syndication agreement between Customer and [*] or any Non-Hosted Syndicated Site contains provisions that include, at a minimum, terms and conditions substantially similar but no less protective of Google than the following terms and conditions:

a) [*]

b) [*]

c) [*]

d) [*]

e) [*]

f) [*]

g) [*]

h) [*]

i) [*]

j) [*]

k) [*]

l) [*]

m) [*]

n) [*]

o) [*]

p) [*]

q) [*]

In the event [*] or any Non-Hosted Syndicated Site does not agree with the provisions set forth in subsection (p) of this Section 1, then Google may, in its sole discretion and with prior written authorization (which shall include email authorization), [*].

2. Customer agrees to [*] for [*] and any Non-Hosted Syndicated Site’s access to and use of the Services and AFS Ads. Customer agrees to enforce the terms of the agreements required by this Agreement and to notify Google [*] of any known breach of such terms. Customer will defend and indemnify Google against: [*]. Upon Google’s request, Customer shall provide Google with [*]. Google hereby acknowledges and agrees that [*] shall be considered Confidential Information of the Customer, whether or not marked as such, and shall be subject to all confidentiality restrictions set forth in this Agreement. For purposes of clarification, Google is prohibited from disclosing t[*]in part or in whole, by itself or in combination with any other terms or list of terms, to any third party.

3. Google, [*] assign to [*] or any Non-Hosted Syndicated Site a separate Client ID, and Customer shall ensure that such assigned Client ID is implemented by [*] or such Non-Hosted Syndicated Site. In no event shall Google be required to deliver Services to or create a Client ID unless an agreement that contains the terms set forth in Section 1 of this Exhibit A is entered into between Customer and [*] or such Non-Hosted Syndicated Site. Google shall not be obligated to grant [*] or any Non-Hosted Syndicated Site access to the Services until Customer provides Google with the following information: [*]. Google may revise the required information listed in the preceding sentence at its discretion upon written notice to Customer.

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

EX-10.38

EXHIBIT 10.38

CERTAIN INFORMATION FROM THIS DOCUMENT HAS BEEN REDACTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST BY INFOSPACE, INC. UNDER 17 C.F.R. §§ 200.80(B)(4), 200.83 AND 240.24B-2 AND SUBMITTED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

AMENDMENT NUMBER ONE

TO AMENDED AND RESTATED GOOGLE INC. SERVICES AGREEMENT

AND ORDER FORM

This Amendment Number One (“Amendment One”) is entered into as of November 6, 2006 (the “Amendment One Effective Date”) and amends the Amended and Restated Google Inc. Services Agreement (the “GSA”) and Order Form (the “Order Form”), both with an Effective Date of October 1, 2005, by and between InfoSpace Sales LLC, a Delaware limited liability company, with its principal place of business at 601 108^th Ave. NE, Suite 1200, Bellevue, Washington 98004 (“Customer”) and Google Inc., with its principal place of business at 1600 Amphitheatre Parkway, Mountain View, California 94043 (“Google”). The GSA and Order Form are collectively referred to herein as the “Agreement”.

WHEREAS, Customer and Google are parties to the Agreement, pursuant to which Google provides Customer with certain Services (as defined in the Agreement); and

WHEREAS, Customer and Google desire to amend the Agreement to extend the Initial Term and to clarify certain language regarding the parties’ mutual limitations on liability;

NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows.

1. Definitions. For purposes of this Amendment One, capitalized terms used but not defined herein shall have the same meanings set forth in the Agreement.

2. Amendments to the GSA.

2.1 Section 6(B)(i) (Limitation of Liability). Section 6(B)(i) of the GSA is hereby amended by adding the following language immediately after the words “THE NET AMOUNT GOOGLE HAS ACTUALLY RECEIVED AND RETAINED”: “UNDER THE AGREEMENT”.

2.2 Section 6(B)(ii) (Limitation of Liability). Section 6(B)(ii) of the GSA is hereby amended by adding the following language immediately after the words “THE NET AMOUNT CUSTOMER HAS RECEIVED FROM GOOGLE”: “UNDER THE AGREEMENT”.

2.3 Section 8.1 (Term). Section 8.1 of the GSA is hereby deleted in its entirety and replaced with the following language:

“Term. The term of this Agreement shall commence on October 1, 2005 and shall continue through [*], 2011 (the “Initial Term”), unless earlier terminated as provided herein. The Initial Term and any subsequent renewal terms shall be referred to herein as the “Term.””

2.4 Section 8.2.1(c) (Suspension and Termination). Section 8.2.1(c) of the GSA is hereby amended by adding “[*]” immediately prior to the words “[*].”

Google Confidential 1 InfoSpace Amendment One

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

EXECUTION VERSION

2.5 Section 10.2 (Assignment). Section 10.2 of the GSA is hereby deleted in its entirety and replaced with the following language:

“10.2 Assignment; Change of Control

10.2.1 Overview. [*] may assign its rights or delegate its obligations under this Agreement without [*] prior written consent, except to the Surviving Entity in a Change of Control Transaction (as those terms are defined below), subject to the requirements of Sections 10.2.3 and 10.2.4 below. All Change of Control Transactions involving Google, Customer and/or InfoSpace shall be subject to this Section 10.2 regardless of whether such Change of Control Transaction requires an assignment of this Agreement or not. For purposes of this Section 10.2, “Google”, “Customer”, “lnfoSpace”, and “part(ies)” shall include their respective successors-in-interest, if any.

10.2.2 Definitions.

(a) “Change of Control Transaction.” A “Change of Control Transaction” shall be defined as (i) a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of a party; or (ii) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of beneficial ownership (within the meaning of Rule 13(d)(3) promulgated under such Act) of more than [*] of either (A) the then outstanding shares of common stock of such party or (B) the combined voting power of the then outstanding voting securities of such party entitled to vote generally in the election of directors; or (iii) any transaction in which a third party or parties acquires direct or indirect power to control the management, policies and/or assets of a party to this Agreement.

(b) “Change of Control Transaction Without Assignment.” A “Change of Control Transaction Without Assignment” is a Change of Control Transaction in which the Surviving Entity does not need an assignment of this Agreement to succeed to Customer’s rights under this Agreement (except as otherwise required in this Section 10.2).

(c) “Combining Entity.” A “Combining Entity” is a third party involved in a Change of Control Transaction with a party to this Agreement and/or InfoSpace.

(d) “Grandfathered Sites.” The “Grandfathered Sites” are the Customer’s Site and those Syndicated Sites and Non-Hosted Syndicated Sites that were receiving the Services immediately prior to a Change of Control Transaction involving Customer.

(e) “Non-Restricted Entity.” A “Non-Restricted Entity” is any entity that is not listed in Exhibit C hereto, as such Exhibit C may be updated by Google from time to time in accordance with Subsection (f) below.

(f) “Restricted Entity.” A “Restricted Entity” is any entity listed in Exhibit C hereto, as such Exhibit C may be updated by Google from time to time but no more frequently than once per quarter, provided that Google shall not update Exhibit C to include any entity with which

Google Confidential 2 InfoSpace Amendment One

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

EXECUTION VERSION

Customer has previously publicly announced its intention to enter into a Change of Control Transaction.

(g) “Surviving Entity.” A “Surviving Entity” is the entity that remains after a Change of Control Transaction between a Combining Entity and either InfoSpace or one of the parties to this Agreement. By way of example and not limitation, the Surviving Entity may be the surviving company in a reorganization, merger or consolidation, or the acquiring company in an asset purchase, stock purchase or other ownership transaction described in Section 10.2.2(a) above.

10.2.3 Change of Control Transactions Involving Non-Restricted Entities.

(a) In the event that Customer or lnfoSpace enters into a Change of Control Transaction involving Non-Restricted Entities, the following shall apply:

(i) Customer may assign this Agreement to the Surviving Entity without Google’s prior written consent if the Surviving Entity expressly agrees in writing to be bound by all of the terms of this Agreement and adheres to all of the conditions in Section 10.2.3(b) below.

(ii) In a Change of Control Transaction Without Assignment, the Surviving Entity may continue to use the Services provided by Google to Customer pursuant to this Agreement if it adheres to all of the conditions in Section 10.2.3(b) below.

(b) Section 10.2.3(a) shall apply only if the Surviving Entity:

(i) has the resources (including without limitation the financial resources) to comply with all of the terms of this Agreement; and

(ii) shall operate and maintain each Site (including any successor site thereto) in a manner and form that is substantially the same as the existing Site and that is targeted to substantially the same user base for similar types of products and services as the existing Site; and

(iii) shall not syndicate the Services to any Syndicated Site or Non-Hosted Syndicated Site or otherwise avail itself of any of the Third Party Distribution rights set forth in this Agreement without Google’s prior written consent at Google’s sole discretion, except that during the Term Google agrees to continue providing Services pursuant to this Agreement solely to the Grandfathered Sites.

10.2.4 Change of Control Transactions Involving Restricted Entities.

(a) In the event that Customer or InfoSpace enters into a Change of Control Transaction involving a Restricted Entity (other than [*] (or any of their respective affiliates, subsidiaries, successors and/or assigns)), the following shall apply:

(i) Customer may not assign this Agreement to the Surviving Entity without Google’s prior written consent at Google’s sole discretion.

(ii) In a Change of Control Transaction Without Assignment, the Surviving Entity may in no way avail itself of any of

Google Confidential 3 InfoSpace Amendment One

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

EXECUTION VERSION

the Services or benefits provided to Customer by Google pursuant to this Agreement (including without limitation any Syndicated Site/Non-Hosted Syndicated Site provisions or Third Party Distribution rights hereunder) without Google’s prior written consent at Google’s sole discretion, except that Google agrees to continue providing Services pursuant to this Agreement solely to the Grandfathered Sites, but only if the Surviving Entity:

(A) has the resources (including without limitation the financial resources) to comply with all of the terms of this Agreement; and

(B) operates and maintains each Site (including any successor site thereto) in a manner and form that is substantially the same as the existing Site and that is targeted to substantially the same user base for similar types of products and services as the existing Site; and

(C) shall not syndicate the Services to any sites other than the Grandfathered Sites, and shall not otherwise avail itself of any of the Third Party Distribution rights set forth in this Agreement, without Google’s prior written consent at Google’s sole discretion.

(b) In the event that Customer or InfoSpace enters into a Change of Control Transaction involving [*] (or any of their respective affiliates, subsidiaries, successors and/or assigns), Customer may not assign this Agreement and Google shall have the right to terminate this Agreement as set forth in Section 8.2.1(c), regardless of the structure of such Change of Control Transaction.”

2.6 Exhibit C (List of Restricted Entities). Exhibit C is hereby deleted in its entirety and replaced with Attachment 1 hereto.

3. Amendments to the Order Form.

3.1 Order Form Cover Page. The Order Form Cover Page is hereby amended by deleting the dates in the box titled “Initial Services Term” and replacing them with the following dates: “October 1, 2005 – [*], 2011.”

4. No Other Amendments. Except as otherwise set forth herein, all terms and conditions of the Agreement shall remain unchanged and in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment One by their duly authorized representatives as of the Amendment One Effective Date.

InfoSpace Sales LLC		Google Inc.
By:	/s/ Brian T. McManus	By:	/s/ Joan Braddi
Name:	Brian T. McManus	Name:	Joan Braddi

Google Confidential 4 InfoSpace Amendment One

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

EXECUTION VERSION

Title: Executive Vice President Title: VP, Search Services

Google Confidential 5 InfoSpace Amendment One

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

EXECUTION VERSION

ATTACHMENT 1

Exhibit C

List of Restricted Entities

[*]

The above list also includes all affiliates and subsidiaries of the above entities, and all

successors-in-interest to all such entities.

Google Confidential 6 InfoSpace Amendment One

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

EX-10.39

EXHIBIT 10.39

CERTAIN INFORMATION FROM THIS DOCUMENT HAS BEEN REDACTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST BY INFOSPACE, INC. UNDER 17 C.F.R. §§ 200.80(B)(4), 200.83 AND 240.24B-2 AND SUBMITTED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

AMENDMENT NUMBER TWO

TO AMENDED AND RESTATED GOOGLE INC. SERVICES AGREEMENT

AND ORDER FORM

This Amendment Number Two (“Amendment Two”) is made effective as of February 1, 2008 (the “Amendment Two Effective Date”) and amends the Amended and Restated Google Inc. Services Agreement (the “GSA”) and Order Form (the “Order Form”), both with an Effective Date of October 1, 2005, and as amended on November 6, 2006 (“Amendment One”), by and between InfoSpace Sales LLC, a Delaware limited liability company, with its principal place of business at 601 108^th Ave. NE, Suite 1200, Bellevue, Washington 98004 (“Customer”) and Google Inc., with its principal place of business at 1600 Amphitheatre Parkway, Mountain View, California 94043 (“Google”). The GSA, Order Form and Amendment One are collectively referred to herein as the “Agreement”.

WHEREAS, Customer and Google are parties to the Agreement, pursuant to which Google provides Customer with certain Services (as defined in the Agreement); and

WHEREAS, Customer and Google desire to add certain URLs owned and controlled [*] as Non-Hosted Syndicated Sites;

NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows.

1. Definitions. For purposes of this Amendment Two, capitalized terms used but not defined herein shall have the same meanings set forth in the Agreement.

2. Amendments to the GSA. Pursuant to Section 1.5 of the GSA, Google hereby approves each URL set forth on Exhibit A attached hereto (each a “[*] URL”) as a “Non Hosted Syndicated Site” and further approves the distribution of AFS Services to such [*] URL(s). As of the Amendment Two Effective Date, each [*] URL shall be a Non Hosted Syndicated Site and shall be subject to all terms and conditions set forth in the Agreement. Notwithstanding the foregoing approval, Customer acknowledges and agrees that prior to distributing any Service(s) to a [*] URL, Customer shall enter into a written agreement with [*] (or its Affiliate that owns the relevant [*] URL) which agreement shall contain, at a minimum, all terms and conditions set forth in Schedule B to the Agreement.

3. Metrics. Notwithstanding anything to the contrary set forth in Section 7.2 (Metrics Provided by Google), Customer acknowledges and agrees that it will in no event provide to [*] or to any Affiliate of [*] the [*] metrics of any Google Service(s) on any [*] URL, except as specifically permitted below. Customer may only disclose to [*] (or any Affiliate thereof) Google [*] metrics on any given [*] URL if such performance metrics are aggregated with the [*] metrics of all non-Google providers of advertising services on such [*] URL. Customer shall in no event disclose [*] metrics (including without limitation [*]) generated via Google’s Services on any [*] URL in a non-aggregated form. For the avoidance of doubt, Customer acknowledges and agrees that it will not implement the Google Services on any [*] URL on a [*] basis (i.e. [*]). Customer must obtain Google’s prior written consent if it wishes to implement the Google Services on a [*] URL without implementing [*]. “Affiliate” means any entity that controls, is controlled by or is

Google Confidential 1 InfoSpace Amendment Two

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

under common control with another entity, where control means the beneficial ownership of more than [*] ([*]) of either (i) the then outstanding shares of common stock of such entity; or (ii) the combined voting power of the then outstanding voting securities of such entity entitled to vote generally in the election of directors.

4. [*] Toolbar. As of the Amendment Two Effective Date, Google approves the Client Application known as the “[*] Toolbar” (but only those URLs set forth in Exhibit A attached hereto) as a WebSearch Client Application and AFS Client Application, subject to such [*] Toolbar complying with all terms and conditions of the Agreement applicable to Client Applications, including without limitation Google’s Client Application Guidelines. The implementation of Google Services on the [*] Toolbar shall be in material conformity with the screen shot attached hereto as Exhibit B and Customer shall notify Google if and to the extent any material changes are made to such implementation.

5. No Other Amendments. Except as otherwise set forth herein, all terms and conditions of the Agreement shall remain unchanged and in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment Two by their duly authorized representatives as of the Amendment Two Effective Date.

InfoSpace Sales LLC		Google Inc.
By:	/s/ J.F. Voelker	By:	/s/ Joan Braddi

Name:  J.F. Voelker Name:  Joan Braddi

Title:  CEO Title:  VP, Search Services

Google Confidential 2 InfoSpace Amendment Two

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Exhibit A

[SPAF]

[*]

Google Confidential 3 InfoSpace Amendment Two

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Exhibit B

Screenshot of [*] Toolbar

[to be provided]

Google Confidential 4 InfoSpace Amendment Two

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

EX-10.40

EXHIBIT 10.40

CERTAIN INFORMATION FROM THIS DOCUMENT HAS BEEN REDACTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST BY INFOSPACE, INC. UNDER 17 C.F.R. §§ 200.80(B)(4), 200.83 AND 240.24B-2 AND SUBMITTED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Google Confidential FINAL

AMENDMENT FOUR TO THE

GOOGLE SERVICES AGREEMENT ORDER FORM

This is Amendment Four to the Google Services Agreement Order Form (“Amendment Four”) and is entered into as of December 1, 2008 (the “Amendment Four Effective Date”) by and between InfoSpace Sales LLC, a limited liability company formed under the laws of Delaware, with its principal place of business at 601 108^th Avenue NE, Suite 1200, Bellevue, WA 98004 (“Customer”), and Google Inc., a Delaware corporation, with its principal place of business at 1600 Amphitheatre Parkway, Mountain View, California 94043 (“Google”).

Background

WHEREAS, Customer and Google entered into an Amended and Restated Google Services Agreement (as amended from time to time, the “GSA”) and a Google Services Agreement Order Form (as amended from time to time, the “Order Form”), with Effective Dates of October 1, 2005 (collectively, the “Original Agreement”), pursuant to which Google provides certain Services to Customer; and

WHEREAS, through this Amendment Four, the parties wish to amend the Order Form.

NOW THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Customer and Google hereby agree that the Order Form shall be amended as of the Amendment One Effective Date as follows:

Terms

1. Modification of Section 14.2.3. of the Order Form. The parties agree to append the following to the first paragraph of Section 14.2.3 of the Order Form:

“Further, with respect to [*], once [*].”

2. Miscellaneous. Except as modified by this Amendment Four, the Original Agreement shall remain in full force and effect. This Amendment One may be executed in counterparts, including facsimile counterparts.

IN WITNESS WHEREOF, the parties have executed this Amendment One by their duly authorized representatives as of the Amendment One Effective Date.

GOOGLE INC.		INFOSPACE SALES LLC
By:	/s/ Sanjay Kapoor	By:	/s/ David Binder
Print Name: Sanjay Kapoor		Print Name: David Binder
Title: Sr. Director, Strategic Partnerships		Title: CFO
Date: 12/16/08		Date: 12/16/08

1

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

EX-10.41

EXHIBIT 10.41

CERTAIN INFORMATION FROM THIS DOCUMENT HAS BEEN REDACTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST BY INFOSPACE, INC. UNDER 17 C.F.R. §§ 200.80(B)(4), 200.83 AND 240.24B-2 AND SUBMITTED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

PUBLISHER:	InfoSpace Sales LLC & InfoSpace Europe Limited	PUBLISHER TAX ID: [*]
Start Date:	All Territories Initial Term: November 26, 2007 Renewal Term: July 1, 2008	End Date:	U.S. Territory Initial Term: June 30, 2008 Renewal Term: [*], 2011 For All Other Territories October 31, 2008

This Agreement shall terminate and supersede: (1) the Yahoo! Search Marketing-Yahoo! Publisher Network Service Order # 205162 between Overture, on the one hand, and InfoSpace Sales LLC and InfoSpace, Inc, on the other hand, dated March 1, 2006, as amended; (2) the Yahoo! Search Marketing-Yahoo! Publisher Network Service Order between OSSIL, on the one hand and InfoSpace Europe Limited and InfoSpace, Inc. on the other hand, dated March 1, 2006, as amended; and (3) the Provider (Search Services) Agreement between InfoSpace Sales LLC and Overture, dated April 18, 2002, as amended.

For clarity, this Agreement shall automatically renew upon the expiration of the Initial Term.

Notwithstanding anything to the contrary, this Agreement shall terminate as to [*] on [*].

Sites: The websites owned and operated by Publisher as listed in Exhibit 1 to this SO, plus additional websites owned and operated by Publisher as approved by Overture pursuant to this Agreement.

Syndicated Sites: The websites owned and operated by Publisher’s Affiliates, as listed in Exhibit 1 to the Syndication Attachment, plus additional sites as approved by Overture pursuant to this Agreement.

Applications: The Applications owned and operated by Publisher’s Affiliates, as listed in Exhibit 1 to the Software Attachment (“Affiliate Applications”), plus the Publisher’s toolbar application and as private labeled by Publisher (“Publisher Applications”), and such additional applications as approved by Overture pursuant to this Agreement.

Links and    [*]                                                                                               [*]                             [*]

Results:

Only with respect to [*] and Affiliates and Syndicated Sites, as approved by Overture in writing:

[*]

[*]

[*]

[*]

Implementation:

•        As shown in Attachment A and as described in this SO and Attachments

•        Max Queries per Second: Matched Ads – [*]

Branding: Publisher and Publisher’s Affiliates will display the Marks substantially as shown in the mockups attached to Attachment A for the Sites and Syndicated Sites and the mockups attached to the Software Attachment for Applications, and as otherwise approved by Overture as part of any additional Site, Syndicated Site or Application pursuant to the terms and conditions of this Agreement, and in accordance with the Trademark License Attachment.

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

1

I.      Compensation for markets located within the United States of America and Canada:

(A)   Overture will pay Publisher the percentage of [*] set forth in the tables below with respect to [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

•        For reference, as of the Initial Term Start Date, Publisher currently receives [*].

•        [*]

(B)   Overture will pay Publisher the percentage of [*] set forth in the tables below with respect to [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

        [*]                                                                                       [*]

• For reference, as of the Initial Term Start Date, Publisher currently receives [*]

(C) Overture will pay Publisher [*].

II.     Compensation for markets located within Territories outside of the United States of America and Canada:

Overture will pay Publisher [*]

Overture will pay Publisher [*]

Overture and Publisher acknowledge that prior to the first anniversary of the Initial Term Start Date, Overture and Publisher will hold good faith discussions regarding amending the compensation structure for markets located within Territories outside of [*]

III.   Multimedia Fees

Publisher will pay Overture [*]

Send notices to: INFOSPACE SALES LLC		YAHOO! SEARCH MARKETING
[*]		[*]
[*]	Attn: General Counsel	[*]	Attn: General Counsel
INFOSPACE EUROPE LIMITED		OVERTURE SEARCH SERVICES (IRELAND) LIMITED

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

2

[*]		[*]
[*]	Attn: General Counsel	[*]	Attn: Legal

Publisher and Overture agree to this Service Order and all Attachments. Signed:

INFOSPACE SALES LLC		OVERTURE SERVICES, INC., doing business as YAHOO! SEARCH MARKETING (“OSI”)
By:	/s/ J.F. Voelker	By:	/s/ Dean Stackel
Name:	J.F. Voelker	Name:	Dean Stackel
Title:	CEO	Title:	VP, BD
INFOSPACE, INC. (as guarantor under Section 22 of Attachment B)		OVERTURE SEARCH SERVICES (IRELAND) LIMITED (“OSSIL”)
By:	/s/ J.F. Voelker	By:
Name:	J.F. Voelker	Name:
Title:	CEO	Title:
INFOSPACE EUROPE LIMITED
By:	/s/ J.F. Voelker
Name:	J.F. Voelker
Title:	CEO

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

3

EXHIBIT 1 TO SO

PUBLISHER OWNED AND OPERATED SITES

A. For markets located within the United States of America and Canada

[*]

B. For markets located within Territories outside of the United States of America and Canada

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Exh. 1 to SO - Page 1

ATTACHMENT A - IMPLEMENTATION REQUIREMENTS

The following requirements apply to all Links and Results shown in the SO. Any provisions concerning Links and Results not explicitly listed in the SO do not apply to Publisher. OSI is solely responsible for the Overture rights, obligations and duties described under this Agreement for the markets included as part of the Territory within the Americas and OSSIL is solely responsible for the Overture rights, obligations and duties described under this Agreement for all the markets included as part of the Territory outside the Americas. The use of the term “Overture” throughout this Agreement shall refer to OSI in relation to the markets included as part of the Territory with the Americas and shall refer to OSSIL in relation to all markets included as part of the Territory outside the Americas. The use of the term Publisher throughout this Agreement shall refer to InfoSpace Sales LLC in relation to the markets included as part of the Territory with the Americas and shall refer to InfoSpace Europe Limited in relation to all markets included as part of the Territory outside the Americas.

A. Requirements for all Links, Queries and Results

1. Publisher will implement all Links and Results generally as shown in the mockups or as otherwise approved by Overture pursuant to the terms and conditions of this Agreement.

2. Publisher will display the labels and headings shown in the mockups (or any labels, headings or notices required by law), with a nearby prominent link to a webpage that explains that certain Results are sponsored advertising.

3. After a User submits a Query, Publisher will not intersperse or display any interstitial content to the User prior to displaying the initial results page to the User, which page may include Results as provided for hereunder. Publisher will not cache Results [*] to process, organize and present results in response to the Query with respect to which such Results were delivered. To the extent Paid Search Results are displayed by Publisher, Publisher will display such Paid Search Results [*]. [*]

4. The Results provided by Overture will not exceed [*] for the full title and description, unless otherwise agreed to by the parties. Publisher will not [*] the full titles, descriptions and URLs provided by Overture. Other than as expressly allowed under the terms of this Agreement or as otherwise approved by Overture in connection with the display of Results through a particular Publisher’s Offering, Publisher will not [*] the Results as provided by Overture to Publisher. Publisher will display Results in the language provided by Overture.

5. Publisher will include certain Links within each Publisher’s Offering as set forth in the mockups or otherwise agreed to by the parties pursuant to the Agreement. Publisher will not [*]. Publisher will use commercially reasonable efforts to enable all of its Users to access and use the Links and Results and to deliver all Queries from the Links (including Queries for Multimedia Results where Publisher has implemented such Links for Multimedia Results on Publisher’s Offerings and in response to which Overture will use commercially reasonable efforts to deliver the relevant and applicable Multimedia Results or a response that no Multimedia Results are available) within the Publisher’s Offerings to Overture [*]; provided that, in response to a Query for [*]. [*]

B. Additional Requirements for Matched Ads and/or Hyperlinks

1. The parties will agree in writing on the pages within the Publisher’s Offerings that will display Matched Ads and/or Hyperlinks (“Ad Pages”), using, as the parties may agree, either (a) a list of mutually agreed keywords or (b) editorially or dynamically mapped keywords provided by Overture or generated using Overture’s technology. All Affiliates must be approved in writing by Overture prior to implementing the keyword functionality described above. Publisher will implement and display Matched Ads and/or Hyperlinks, to the extent provided by Overture, as agreed to by the parties as part of Overture’s approval of such Publisher’s Offering, to all Users who navigate to the Ad Pages. Overture reserves the right to require Publisher to stop using any keyword or Matched Ads and/or Hyperlinks on or in connection with

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment A – Page 1

any Publisher’s Offering with respect to the use of Matched Ads and/or Hyperlinks [*] upon notice to Publisher. Following such notice, Publisher will promptly comply with such request.

2. Publisher will not exceed Max Queries. If Publisher exceeds Max Queries, Overture may suspend services until the number of Queries drops below Max Queries. Publisher will use commercially reasonable efforts to display Matched Ads and/or Hyperlinks at the same time as it displays the other content on the Ad Page.

3. Once a user arrives at an Ad Page, Publisher will not send Overture additional Queries for Matched Ads until the User navigates to a new Ad Page or refreshes the Ad Page.

4. In order for Overture to provide dynamic mapping of Matched Ads, Publisher acknowledges that Overture will [*], solely to the extent needed for Overture’s matching technology to function.

5. With Overture’s prior written approval in each instance, [*] may display Matched Ads in [*] generated via Applications, subject to the following terms and conditions and such other terms and conditions as Overture may require at the time of approval:

a. [*] may display Matched Ads provided by Overture in [*] that conform to mock-ups approved by Overture in writing.

b. [*] may not display any Matched Ads (or other Results) in [*].

c. On each [*] containing Matched Ads, [*].

d. [*]

Within a reasonable period of time from the Start Date, the parties will mutually agree on a limitation for the number of [*] per user per month containing Matched Ads.

Notwithstanding anything else to the contrary in this Agreement, the provisions of this Section 5 above shall terminate and expire and be null and void as of the earlier of [*] or upon Overture’s prior written notice, unless otherwise agreed in writing between the parties.

C. Additional Requirements for Paid Search and/or Web Search during the Initial Term

Unless otherwise agreed by Overture as part of its approval of a Site or Syndicated Site, the following additional requirements for Paid Search and/or Web Search will apply during the Initial Term:

1. Publisher will [*], in each such case if and when such Paid Search Results are made available by Overture in accordance with the terms and conditions of this Agreement.

2. [*] Notwithstanding anything to the contrary, for so long as Publisher has the right to control the display of paid search results on [*], Publisher will [*].

3. [*]

4. [*]

5. Publisher acknowledges and agrees that [*] are not intended to and will not be used to circumvent the intent of the parties to display Paid Search Results [*].

6. The parties will meet during the Initial Term to discuss in good faith other optimization initiatives.

7. During the Initial Term, Overture shall provide Publisher with and Publisher shall test [*] and, if found by Publisher to be substantially similar or an improvement to [*], implement [*] on [*] during the Initial Term. In return for implementing [*], Publisher shall [*].

D. Additional Requirements for Paid Search and/or Web Search during the Renewal Term

Unless otherwise agreed by Overture as part of its approval of a Site or Syndicated Site, the following additional requirements for Paid Search and/or Web Search will apply during the Renewal Term:

1. Publisher will [*], in each such case if and when such Paid Search Results are made available by Overture in accordance with the terms and conditions of this Agreement.

2. [*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment A – Page 2

3. [*]

4. [*]

5. Publisher acknowledges and agrees that [*] are not intended to and will not be used to circumvent the intent of the parties to display Paid Search Results [*].

6. The parties will meet at least once per quarter during the Renewal Term to discuss in good faith other optimization initiatives.

7. [*]

E. [*]

1. [*]

2. [*]

3. [*]

4. [*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment A – Page 3

MOCKUPS

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment B – Page 1

EXHIBIT 1

[*] ATTACHMENT (“[*]”)

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment B – Page 2

ATTACHMENT B – TERMS AND CONDITIONS

The parties agree to the following:

The agreement of the parties consists of the Service Order and all Attachments (“Agreement”).

1. License. During the Term and subject to Publisher’s compliance with this Agreement, Overture grants to Publisher a limited, non-exclusive, non-assignable (except as provided in Section 25), non-transferable, non-sublicensable (except as explicitly provided for under this Agreement to Affiliates approved in accordance with the Syndication Attachment), royalty-free worldwide right and license to [*] the Links on and in the Publisher’s Offerings, send queries from Publisher’s Offerings to Overture and to [*] the Results provided by Overture on and through Publisher’s Offerings, solely for purposes contemplated in this Agreement. The above license includes the limited right to use and reproduce the software code and/or URLs that allow Publisher to create Links, send Queries from Publisher’s Offerings to Overture and receive, transmit and display Results.

2. Services. Overture will [*] respond to Queries by delivering Results or a response that no Results are being delivered. [*] Publisher further acknowledges and agrees that, except as provided in this Agreement, Publisher will not be entitled to, nor seek, [*]. By way of example, and without limitation, under the New Platform, Advertisers will have the ability to [*]. Overture reserves the right (a) [*], (b) [*]. Overture shall not [*].

3. Publisher’s Offerings. This Agreement applies to the Publisher’s Offerings as defined in Section 31 below.

4. Future Offerings. Publisher will [*] notify Overture of any additional websites or software applications owned by Publisher for use or distribution to end-users that include (or that Publisher anticipates will include) search functionality or paid listings. The parties may amend the SO to include such additional offerings. [*]

5. Compensation.

(a) [*]

(b) [*]

6. Payment. For each month during the Term, Overture or Overture Related Parties will pay Publisher in accordance with the SO within [*] days after the end of the calendar month in which the relevant Results appeared on Publisher’s Offerings (“Payment Period”). All payments (a) with respect to the U.S. and Canada will be made in US dollars, (b) with respect to the United Kingdom will be made in British pounds, and (c) with respect to all other countries in the Territory will be made in Euros. If Overture or an Overture Related Party’s Advertisers pay Overture or such Overture Related Party in any other currency, Overture will calculate payment using the average exchange rate as published by a nationally recognized source (e.g., Oanda). If the Territory includes countries other than the United States, Publisher acknowledges that payment will only be made after Publisher fulfills Overture’s invoicing requirements. Overture may offset payments by any amounts Publisher owes to Overture, including previous overpayments and any Multimedia Fees earned by Overture during the Payment Period. In the event that Overture refunds amounts to Advertisers in excess of its payment to Publisher and there are no future payments to Publisher to offset against, Publisher will pay Overture for such amounts within [*] days of Overture’s request. Overture may make payments only when Publisher’s balance exceeds US $250.00 (or until termination or expiration of this Agreement). Except as specifically set forth in this Section, Overture will retain all revenues derived from or in connection with its services.

7. Reports. Overture will provide Publisher with a monthly report describing in reasonable detail how the payments provided for hereunder were determined and will provide Publisher with access to preliminary daily online data on the performance of the Results on Publisher’s Offerings. Such online data will include estimates of each of the following metrics: [*]. All reports provided to Publisher hereunder, whether in

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment B – Page 3

written or electronic form, are the Confidential Information of Overture; provided that any information and metrics that are specific to Publisher and/or Publisher’s Affiliates business and use of the services and Results hereunder as part of any Publisher’s Offering are confidential and proprietary information as between Publisher and Overture and will be governed by the confidentiality provisions of this Agreement; provided further that notwithstanding anything else contained herein, Overture may disclose such Confidential Information to Overture Related Parties, subject to their obligation to keep such information confidential.

8. Audits. [*] each year during the Term and for [*] after the Term, at the expense of the auditing party, Publisher and Overture may review the other party’s records to confirm compliance with the terms of this Agreement. Notwithstanding the prior sentence, if the auditing party has a reasonable belief that the other party is not complying with the terms of this Agreement, then the auditing party shall be entitled to conduct a second audit during such one-year period [*]. All audits under this section must be during normal business hours, must not unduly interfere with the party being audited and must be performed through a reputable, independent certified public accounting firm reasonably acceptable to the other party (the “audited party”). Prior to an audit, the party requesting the audit will require the auditor to sign a confidentiality agreement reasonably similar to the form of the audited party’s standard confidentiality agreement. All information received by either party in connection with an audit under this section shall be subject to the confidentiality obligations of this Agreement. Such audit shall occur during business hours upon at least [*] notice and shall be conducted in accordance with generally accepted auditing standards, if applicable, and the reviewer may disclose only whether or not the audited party is in compliance, and the degree and amount of any non-compliance, and may not disclose other information (including to the auditing party) without written consent of the audited party. [*]

9. Ownership. As between Overture and Publisher, all right, title and interest in Links, Results, and the Yahoo! trademarks are exclusively owned by Overture, its licensors and/or its Advertisers, and all right, title and interest in Publisher’s Offerings, the Publisher Content and the Publisher trademarks, including Publisher’s Search Boxes, are exclusively owned by Publisher and/or its licensors.

10. No Implied Licenses. Each party reserves any rights not expressly granted and disclaims all implied licenses, including implied licenses to trademarks and patents.

11. Responsibility for Publisher’s Offerings. Publisher and its Affiliates are solely responsible for the ownership, development, maintenance and operation of Publisher’s Offerings and the Publisher Content. [*]. Other than the [*] and express limitations and restrictions set forth in this Agreement, Overture has [*]. Notwithstanding the foregoing, Publisher will provide at least [*] prior notification to Overture of [*].

12. Traffic Quality. For each Query and each click on a Paid Result, Publisher will provide: [*]. To the extent Overture requests in writing that Publisher provide any additional data for use by Overture in connection with Overture’s ad serving and quality systems, Publisher will [*] provide such additional data, provided the provision of such data to Overture does not [*]. Publisher will provide this information along with the Internet Protocol address of its own or the Affiliate’s server, as the case may be, at the time a Query is sent to Overture. For clarity, Publisher will not share any [*] with Overture as part of sending Queries to Overture hereunder (incidental transmission of [*] is excluded). Additionally, Publisher will utilize the URLs and other source feed indicators designated from time to time by Overture. The parties will [*] automated or fraudulent traffic. Overture will have no obligation to make payments [*].

13. Confidentiality. A party receiving Confidential Information agrees (a) not to disclose any Confidential Information to any third parties, (b) not to use any Confidential Information for any purposes except to carry out its rights and responsibilities under this Agreement and (c) to keep the Confidential Information confidential using the same degree of care the receiving party uses to protect its own confidential information, as long as it uses at least reasonable care. If either party receives a subpoena or other validly issued judicial process requesting, or is required by a government agency (such as the SEC) to disclose, Confidential Information of the other

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment B – Page 4

party, then the receiving party shall promptly notify disclosing party (in every event prior to disclosure of confidential Information) and shall reasonably cooperate to seek confidential treatment, including the incorporation of reasonably requested proposed redactions, and to obtain an appropriate protective order to preserve the confidentiality of the Confidential Information. All obligations under this Section survive until the latter of 3 years after termination of the Agreement or until such information is in the public domain. The parties intend the foregoing to provide the maximum protection for each party’s respective trade secrets. Overture acknowledges and agrees that, subject to the exclusions set forth in the definition of Confidential Information in Section 31 below, any information Publisher provides to Overture hereunder for the purpose of obtaining or maintaining Overture’s approval of an Affiliate or Syndication Site or Application, including without limitation the identity of any potential third-party affiliate or information regarding such third-party, its websites and applications, is Publisher’s Confidential Information subject to the confidentiality and non-disclosure provisions of this Agreement and is provided to Overture in strict confidence for the sole and limited purpose of obtaining and maintaining Overture’s approval hereunder, and may not be used by Overture for any other purpose, including any sales or marketing efforts.

14. Overture Representations and Warranties. Overture represents and warrants to Publisher that: [*]. If any of the representations and warranties contained in subsection (e) above prove to be untrue, then (i) such event shall not be deemed a default by Overture under this Agreement, and (ii) except with respect to matters related to the Confidential Information of Publisher or any of its Related Parties or as otherwise expressly set forth in this Agreement, Publisher’s sole and exclusive remedy for any breach of the representations and warranties herein shall be [*]. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, AS BETWEEN THE PARTIES AND EXCEPT FOR [*], OVERTURE IS NOT RESPONSIBLE OR LIABLE FOR ANY RESULTS OR OTHER CONTENT PROVIDED BY THIRD PARTIES (INCLUDING ADVERTISERS), OR FOR ANY SYNDICATED SITES THAT CAN BE LINKED TO FROM THE RESULTS OR OTHER CONTENT.

15. Publisher Representations and Warranties. Publisher represents and warrants to Overture that: [*]. If any of the representations and warranties contained in subsection (e) above prove to be untrue, then (i) such event shall not be deemed a default by Publisher under this Agreement and (ii) except with respect to matters related to the Confidential Information of Overture or any of its Related Parties, or as otherwise expressly set forth in this Agreement, Overture’s sole and exclusive remedy for any breach of the representations and warranties herein shall be [*].

16. Overture Indemnification. With respect to claims or actions against one or both parties by third parties, insofar as such claim, demand or action is [*]. Publisher must approve any settlement of any such claim to the extent that such settlement admits liability on Publisher’s or Parent’s behalf, or imposes any restrictions on Publisher or Parent. Overture may, at its option, elect to have Publisher defend and/or settle the claim on its own behalf, using counsel reasonable acceptable to Overture; in that case Overture shall, in addition to its obligations under (ii) above, reimburse Publisher or Parent for its actual and reasonable attorney’s fees and other costs of defending and/or settling the claim (so long as those fees and costs were approved by Overture in advance). [*].

17. Publisher Indemnification. With respect to claims or actions against one or both parties by third parties, insofar as such claim, demand or action is [*]. Overture must approve any settlement of any such claim to the extent that such settlement admits liability on Overture’s or Yahoo!’s behalf, or imposes any restrictions on Overture or Yahoo!. Publisher may, at its option, elect to have Overture or Yahoo! defend and /or settle the claim on its own behalf, using counsel reasonable acceptable to Publisher; in that case Publisher shall, in addition to its obligations under (ii) above, reimburse Overture or Yahoo! for its actual and reasonable attorney’s fees and other costs of defending and/or settling the claim (so long as those fees and costs were approved by Publisher in advance). [*].

18. DISCLAIMER OF WARRANTIES.

(a) WARRANTY DISCLAIMER BY PUBLISHER. OTHER THAN THE WARRANTIES SET FORTH IN THIS AGREEMENT,

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment B – Page 5

PUBLISHER MAKES NO OTHER WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, REGARDING THE PUBLISHER’S OFFERINGS OR THE METASEARCH SERVICES OF PUBLISHER, AND PUBLISHER SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF NONINFRINGEMENT, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. PUBLISHER DOES NOT WARRANT THAT THE OPERATION OF THE PUBLISHER METASEARCH SERVICES WILL BE UNINTERRUPTED OR ERROR-FREE. FURTHERMORE, EXCEPT AS PROVIDED IN THIS AGREEMENT, PUBLISHER DOES NOT MAKE ANY REPRESENTATIONS REGARDING THE USE OR THE RESULTS OF THE USE OF THE PUBLISHER METASEARCH SERVICES IN TERMS OF THEIR CORRECTNESS, ACCURACY, RELIABILITY OR OTHERWISE.

(b) WARRANTY DISCLAIMER BY OVERTURE. OTHER THAN THE WARRANTIES SET FORTH IN THIS AGREEMENT, OVERTURE MAKES NO OTHER WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, REGARDING THE OVERTURE SERVICES AND THE RESULTS, OR FOR ANY SITES THAT CAN BE LINKED TO OR FROM THE RESULTS AND OVERTURE SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF NONINFRINGEMENT, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. OVERTURE DOES NOT WARRANT THAT THE OPERATION OF THE SERVICES WILL BE UNINTERRUPTED OR ERROR-FREE. FURTHERMORE, OVERTURE DOES NOT MAKE ANY REPRESENTATIONS REGARDING THE USE OF THE SERVICES IN TERMS OF THEIR CORRECTNESS, ACCURACY, RELIABILITY OR OTHERWISE.

(c) ADDITIONAL WARRANTY DISCLAIMER. EXCEPT AS PROVIDED IN THIS AGREEMENT, NEITHER PUBLISHER NOR OVERTURE, NOR THEIR LICENSORS, MAKES ANY WARRANTY WHATSOEVER WITH REGARDS TO THE FEATURES, FUNCTIONS, PERFORMANCE QUALITY, OR OTHER CHARACTERISTICS OF THE SERVICES AND PRODUCTS EACH PARTY PROVIDES.

19. LIMITATION OF LIABILITY. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER PARTY WILL BE LIABLE FOR ANY LOST PROFITS, COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR FOR ANY OTHER INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, HOWEVER CAUSED, AND UNDER WHATEVER CAUSE OF ACTION OR THEORY OF LIABILITY BROUGHT (INCLUDING, WITHOUT LIMITATION, UNDER ANY CONTRACT, NEGLIGENCE OR OTHER TORT THEORY OF LIABILITY) EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER PARTY WILL BE LIABLE FOR DIRECT DAMAGES IN EXCESS OF THE GREATER OF [*].

INFOSPACE SHALL NOT BE LIABLE TO OVERTURE OR ANY OTHER PARTY FOR ANY DAMAGES ARISING FROM THIRD PARTY UNAUTHORIZED ACCESS OR USE OF THE INFOSPACE METASEARCH SERVICES, UNLESS SUCH UNAUTHORIZED USE ARISES FROM INFOSPACE’S NEGLIGENCE OR WILLFUL MISCONDUCT. OVERTURE SHALL NOT BE LIABLE TO INFOSPACE OR ANY OTHER PARTY FOR ANY DAMAGES ARISING FROM THIRD PARTY UNAUTHORIZED ACCESS OR USE OF THE OVERTURE SERVICES UNLESS SUCH UNAUTHORIZED USE ARISES FROM OVERTURE’S NEGLIGENCE OR WILLFUL MISCONDUCT.

NOTWITHSTANDING THE FOREGOING, THE ABOVE EXCLUSIONS AND LIMITATIONS OF LIABILITY WILL NOT APPLY TO [*].

20. Abuse of Services. Unless specifically allowed or otherwise approved by Overture in writing under this Agreement, [*]

(a) [*]

(b) [*]

(c) [*]

(d) [*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment B – Page 6

(e) [*]

(f) [*]

(g) [*]

21. Suspension and Termination.

Notwithstanding anything else in this Agreement to the contrary, but without limiting any of Overture’s rights under the Agreement, in the event of a breach or violation of one or more terms or conditions of this Agreement by an Affiliate or Syndication Site without Publisher’s knowledge or consent, Publisher shall [*].

(a) Material Breach: Except where this Agreement provides otherwise, either party may terminate this Agreement if the other party fails to cure any material breach of this Agreement within [*] of notice thereof, or if such breach is not amenable to cure [*]. When Overture is the non-breaching party, Overture may [*]. When Publisher is the non-breaching party, Publisher may [*]. In addition, either party may suspend performance and/or terminate this Agreement upon [*] prior written notice if the other party makes any assignment for the benefit of creditors or files or has filed against it any petition under bankruptcy law.

(b) Material Change: In the event of a material change as described in Section 11 above that Overture does not approve, Overture will [*]. If Publisher does not or is not able to [*], Overture may suspend or terminate the provision of Overture’s services and Results with respect to such offering [*].

(c) Complaints: If Overture receives [*] complaints about Publisher, an Affiliate or any Publisher’s Offering [*], then, without limitation of any other termination rights provided in this Agreement and subject to the notice, cure and suspension provisions set forth above in Subsection (a) above, Overture may [*]. However, Overture may [*].

(d) Abuse of Service Violations: If Publisher or any Affiliate [*], Overture may [*], subject to the provisions set forth in Section 20. If Publisher or Affiliate fails to [*] after Overture informs Publisher of the violation or if Publisher or Affiliate fails to [*], then Overture may [*].

(e) Trademark License Violation: If Publisher or any Affiliate engages in any action that Overture determines [*] disparages or devalues the Marks or Overture’s or its licensors’ reputation or goodwill in the Marks, Overture will [*] and may [*].

(f) Applications: Overture may terminate or suspend services with respect to an Application or all similar types of Applications immediately upon notice, in the event of any of the following:

i. [*]

ii. [*]

iii. [*]

iv. [*]

v. [*].

Notwithstanding the foregoing, if Overture determines, in its sole discretion, that [*]

(g) Syndicated Sites: If Publisher or an Affiliate fails to comply with any requirements under the Syndication Attachment, Overture may [*]. In addition, if such breach is not cured within [*] of notice of breach from Overture, Overture may [*].

In addition to the foregoing, Overture may terminate, [*]. In the event that Overture terminates such right and Publisher thereafter syndicates Links or Results to any additional third party, Overture may [*].

[*]

(h) [*]

(i) [*]

(j) [*]

(k) Cooperation. In any event giving rise to the suspension or termination rights of Overture above in this Section 21, Overture will provide

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment B – Page 7

reasonable cooperation to Publisher to assist Publisher with (i) identifying the cause, and (ii) identifying and implementing a remedy.

(l) Change of Control: Overture may terminate this Agreement [*] upon the existence of a Change of Control by Publisher or Parent; provided that Overture must exercise such right of termination within [*] of notice of such Change of Control or such right of termination shall expire. “Change of Control” means (i) a merger, consolidation or other reorganization to which Publisher or Parent is a party, if the individuals and entities who were stockholders (or partners or members or others that hold an ownership interest) of Publisher or Parent immediately prior to the effective date of the transaction have “beneficial ownership” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of less than [*] (or [*] if such transaction involves a Named Company) of the total combined voting power for election of directors (or their equivalent) of the surviving entity following the effective date of the transaction, (ii) acquisition by any entity or group of direct or indirect beneficial ownership in the aggregate of then issued and outstanding securities (or other ownership interests) of Publisher or Parent in a single transaction or a series of transactions representing in the aggregate [*] or more (or [*] or more if such transaction or series of transactions involves a Named Company) of the total combined voting power of Publisher or Parent, or (iii) a sale of all or substantially all of Publisher’s or Parent’s assets. “Named Company” means [*] or any of their subsidiaries or affiliates.

22. Parent Guaranty.

Parent hereby unconditionally guarantees to Overture, as and for its own debt, until final and indefeasible payment thereof has been made, the punctual and faithful performance, keeping, observance, and fulfillment by Publisher of all of the agreements, conditions, covenants, and obligations of Publisher contained in the Agreement. In the event that Publisher fails to perform, keep, observe, or fulfill any obligation in the manner provided in the Agreement (following any applicable cure periods), Parent immediately shall cure or remedy each of such obligations to be performed, kept, observed, or fulfilled.

Publisher consents and agrees that, without notice to or by Parent and without affecting or impairing the obligations of Publisher hereunder, Overture may, by action or inaction: (a) compromise, settle, extend the duration or the time for the relevant cure period of, or discharge the performance of, or may refuse to or otherwise not enforce the Agreement; or (b) amend or modify in any manner and at any time (or from time to time) any portion of the Agreement with Publisher directly with Parent. No action or proceeding by Parent under any document or instrument evidencing the guaranteed obligations shall serve to diminish the liability of Parent under this section except to the extent that Overture finally and unconditionally shall have realized payment by such action or proceeding.

Parent represents and warrants to Overture that Publisher has the requisite authority to provide the representations and warranties as set forth in Section 15 above. Parent hereby covenants that Parent will continue to keep Overture informed and will provide prior written notice of Publisher’s inability to perform under the Agreement and of all other circumstances which bear upon the risk of nonperformance of the guaranteed obligations.

23. Notice. Notice will become effective when delivered: (a) by courier to the address in the SO (established by written verification of personal, certified or registered delivery by courier or postal service); or (b) by fax to the fax number in the SO (established by a transmission report and followed by a copy sent by courier or certified or registered mail). The parties will notify each other of updated addresses and/or fax numbers.

24. PR. No party will issue a press release or other written public statement regarding this Agreement without the other party’s written approval, except that either party may communicate the general nature of this Agreement to current and potential customers (and, in the case of Overture, Advertisers) and Overture may list Publisher as a Yahoo! Publisher. No cure period shall apply to a breach of this Section.

25. Assignment. [*] may assign all or part of this Agreement to a Related Party of [*]. Other than as above, neither party may assign any rights or duties under this Agreement without the other party’s written consent, not to be

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment B – Page 8

unreasonably withheld. Any assignment without such party’s consent will be void.

26. Agreement. Executed counterparts will each be deemed originals. The parties can rely on fax copies of the signed Agreement as if they are originals. Only a written instrument executed by the party expressly waiving compliance may waive any terms of this Agreement. This is the entire agreement between the parties on this subject and it supersedes any other agreements on this subject. Amendments must be in writing and signed by an officer of each party. If any part of this Agreement is invalid, the remainder shall remain in force and the invalid portion will be replaced with a valid provision coming closest to the parties’ intent and having like economic effect. Each party will use commercially reasonable efforts to give the other party 20 days written notice of its intent to file this Agreement with the SEC or other regulatory agency and to consult with the other party for the purpose of incorporating reasonable proposed redactions.

27. Law and Venue. This Agreement will be governed by [*] law, without regard for its conflict of law principles.

28. Expiration/Termination. When this Agreement expires or is terminated: all rights and licenses will terminate immediately and Publisher will immediately cease using the Links, Results and Marks; Sections 6 (solely to the extent required to reconcile and pay any amounts owed to either party as of the termination or expiration date), 7, 8, 9, 10, 13-19, 22, 23, 26, 27, 28, 29, 30 and 31 of this Attachment B; and Sections 4 and 6 of the Trademark Attachment will survive; and Overture will promptly pay Publisher any undisputed amounts owed under this Agreement, and Publisher will promptly refund to Overture any unearned portion of any payments made.

29. Force Majeure. A party will not be liable for failing to perform because of strikes, riots, natural disasters, Internet outages, terrorism, acts of god or government action.

30. Independent Contractors. The parties are independent contractors, not agents, partners, employees or joint venturers.

31. Definitions.

Above the Fold or ATF: [*].

Ad Code: the JavaScript or other code that initiates a Query when a user goes to an Ad Page.

Advertiser: any entity providing advertising content to Overture paid marketplace databases for display as sponsored listings.

Agreement: see preamble in Attachment B.

Audio Search Results: [*].

Compliance: [*].

Confidential Information: any information disclosed by either party to the other party during the Term (and any renewals terms), either directly or indirectly, in writing, orally or by inspection of tangible objects, which is designated as “Confidential,” “Proprietary” or some similar designation. All of the terms of this Agreement shall be deemed “Confidential.” Information communicated orally will be considered Confidential Information if such information is designated as being Confidential Information at the time of disclosure and confirmed in writing as being Confidential Information within 20 business days after the initial disclosure, or such that under all of the circumstances surrounding disclosure a reasonable person would consider such information the confidential and/or proprietary information of the disclosing party, whether disclosed orally or in writing. Confidential Information includes non-public information Publisher provides to Overture hereunder for the purpose of obtaining Overture’s approval of an Affiliate, Syndicated Site or Application, including without limitation the identity of any potential third party affiliate or non-public information regarding such third party, website or Application. Confidential Information will not, however, include any information which (a) was publicly known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (b) becomes publicly known and made generally available after disclosure by the disclosing party to the receiving party through no action or inaction of the receiving party; (c) is already in the possession of the receiving party at the time of disclosure by the disclosing party; (d) is obtained by the receiving party from a third party without a breach of such third party’s obligations of confidentiality; or (e) is independently developed by the receiving party

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment B – Page 9

without use of or reference to the disclosing party’s Confidential Information.

[*] see Section 5(a) of Attachment B.

[*] Threshold: the dollar amount and corresponding [*] generated by Publisher’s Sites and Syndicated Sites as indicated in the Compensation section of the SO.

Hyperlinks: words that are displayed in the form of hyperlinks, that generate a Query when clicked on or used by a user.

Hyperlink Results: [*].

Image Search Results: [*].

Initial Term: the period between the Initial Term Start Date and Initial Term End Date, as indicated on the cover page to the SO, unless terminated earlier as provided in this Agreement.

Links: any code or technology provided or licensed to Publisher by Overture to enable the transmission of a Query from a Search Box, [*], Hyperlink or [*] Link to Publisher and Ad Code, to the extent included in the SO.

Local Search Implementation: [*].

Marks: any Yahoo! trademark shown in the mockups.

Matched Ads: the content of Advertisers served from YSM’s paid marketplace databases in response to a Query generated from the Ad Code.

Multimedia Fees: see Section III, Compensation in the SO.

Multimedia Results: [*].

News Search Results: [*].

Overture Related Party: Yahoo! and Yahoo! or Overture subsidiaries and affiliates where such entities either control, are controlled by or are under common control with Yahoo! or Overture. In the event of an assignment of all or part of this Agreement to an Overture Related Party, the term “Overture” used in this Agreement shall be deemed to refer exclusively to the Overture Related Party, to the extent of the assignment (as to both the Overture Related Party’s responsibilities and rights).

Paid Results: [*].

Paid Search Results: [*].

Parent: InfoSpace, Inc.

Payment Period: see Section 6 of Attachment B.

Publisher Content: [*].

Publisher Related Party: InfoSpace Sales LLC, InfoSpace, Inc. or its subsidiaries and affiliates where such entities either control, are controlled by or are under common control with Publisher or its Parent. In the event of an assignment of all or part of this Agreement to a Publisher Related Party, the term “Publisher” used in this Agreement shall be deemed to refer exclusively to the Publisher Related Party, to the extent of the assignment (as to both the Publisher Related Party’s responsibilities and rights); provided that no assignment will limit the scope of Parent’s guaranty in Section 22 above.

Publisher’s Offerings: all Sites, Syndicated Sites, and Applications identified in the SO and any Attachment, or otherwise approved by Overture pursuant to the terms and conditions of this Agreement, including the top-level domains, successor sites and such webpages within those top-level domains for each offering as mutually agreed upon by the parties.

Query: [*].

[*].

Renewal Term: the period between the Renewal Term Start Date and Renewal Term End Date, as indicated on the cover page to the SO, plus any additional renewal periods, if any, unless terminated earlier as provided in this Agreement

Results: Paid Search Results, Web Search Results, Hyperlink Results, Audio Search Results, Image Search Results, News Search Results, Video Search Results and/or Matched Ads, to the extent included in this Agreement and as appropriate to the context.

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment B – Page 10

Search Box: a graphical area in which a user can enter a Query.

SO: the Service Order.

Term: collectively, the Initial Term and the Renewal Term, unless indicated otherwise.

Territory: [*] and any other market included as the result of an assignment to an Overture Related Party.

[*]

User: an end user of a Publisher’s Offering.

Video Search Results: the responses served from Yahoo Inc.’s Video search databases (including all databases related to Yahoo! Search Marketing’s and Yahoo! Inc.’s content acquisition programs) ranked by an algorithm designed to determine relevance.

Web Search Results: the responses served from Yahoo Inc.’s Web search databases (including all databases related to YSM’s and Yahoo Inc.’s content acquisition programs), ranked by an algorithm designed to determine relevance.

32. [*].

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment B – Page 11

ATTACHMENT C - TRADEMARK LICENSE ATTACHMENT

1. License to Marks. During the Term and subject to Publisher’s compliance with this Agreement, Overture grants to Publisher a limited, non-exclusive, non-assignable, non-transferable, non-sublicensable (unless explicitly provided for under this Agreement), royalty-free license to display any Marks shown in the mockups, solely for purposes contemplated in this Agreement.

2. Conditions of License. Publisher may display the Marks solely as described in this Agreement. Publisher may not alter any of the Marks.

3. No Assertions as to Marks. Publisher will not (a) assert any trademark or other intellectual property or proprietary right in the Marks or in any element, derivation, adaptation, variation or name thereof; (b) contest the validity of any of the Marks; (c) contest Overture’s or its licensors’ ownership of any of the Marks; or (d) in any jurisdiction, adopt, use, register, or apply for registration of, whether as a corporate name, trademark, service mark or other indication of origin, or as a domain name, any Marks, or any word, symbol or device, or any combination confusingly similar to, or which includes, any of the Marks.

4. Goodwill in Marks. As between Overture and Publisher, any goodwill resulting from Publisher’s use of any Marks will inure to the benefit of Overture and/or its licensors and will automatically vest in Overture and/or its licensors upon use by Publisher. Publisher will not engage in any action that may dilute, diminish, or otherwise damage Overture’s or its licensors’ rights and goodwill in the Marks.

5. Trademark Guidelines. To the extent consistent with the mockups, Publisher will abide by the attached trademark quality control guidelines. If Overture provides any updated guidelines during the Term, Publisher will comply with the updated guidelines to the extent consistent with the mockups within a reasonable period of time; [*]. Updates to the guidelines will generally address graphical and technical aspects of the Marks (such as color).

6. Ownership of Marks. As between Overture and Publisher, all right, title and interest in the Marks are exclusively owned by Overture, its licensors and/or its Advertisers. Overture grants no rights to the Marks except for the limited license granted above. Overture reserves any rights not expressly granted and disclaims all implied licenses.

7. Misc. If there is any conflict between this Trademark License Attachment and any other provision of the Agreement, the terms of this Trademark License Attachment will govern as to Publisher’s use of the Marks.

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment C – Page 1

OVERTURE MARK USAGE GUIDELINES

1. Publisher may use the Marks solely for the purpose authorized herein by Overture and only in compliance with the specifications, directions, information and standards supplied by Overture and modified by Overture from time to time in accordance with the Agreement.

2. Publisher agrees to comply with any reasonable requirements established by Overture concerning the style, design, display and use of the Marks; to correctly use the trademark symbol™ or registration symbol^® with every use of the trademarks, service marks and/or tradenames as part of Overture’s Marks as instructed by Overture; to use the registration symbol^® upon receiving notice from Overture of registration of any trademarks, service marks and/or tradenames that are part of the Marks.

3. Publisher may not alter the Marks in any manner, or use the Marks in any manner that may dilute, diminish, or otherwise materially damage Overture’s rights and goodwill in any Overture Mark.

4. Publisher may not use the Licensed Materials in any manner that implies sponsorship or endorsement by Overture of services and products other than those provided by Overture.

Attachment C – Page 2

ATTACHMENT D - SOFTWARE ATTACHMENT

1. Definitions.

a. “Application” means a software application of Publisher, any software application of an Affiliate (approved in accordance with the requirements contained in the Syndication Attachment).

b. “Bundled Application” means any software application other than an Application that is distributed as part of a bundled download or installation with any Application, where the term “bundled” means that the User may not separately download or install the Application without also downloading or installing the Bundled Application.

c. “Certification Program” means the [*], or such other program used to verify that software applications distributed by Yahoo! partners meet certain guidelines.

d. “Certification Provider” means [*] or such other provider of the Certification Program, whether Overture, Yahoo! or a designated third party.

e. “Certified/Certification” means the status of meeting the criteria of the Certification Program and of having an up-to-date certification from the Certification Provider.

2. Links and Results. Publisher may include the following Links and Results in or through Applications:

[*]

[*]

[*]

Each Certified Application will conform substantially to the mock-ups for such Application attached hereto or otherwise approved by Overture in writing.

3. Request for Certification. Within thirty (30) days of the date Overture launches its certification process and makes such Certification Provider available to Publisher (the “Certification Commencement Date”), Publisher or its Affiliate will submit any Application not already Certified to the Certification Provider for evaluation, including all versions of the Applications that the Certification Guidelines require to be submitted.

4. Interim Requirements. Prior to Certification, Publisher will, and will [*] ensure that Affiliates, comply with the guidelines found at [*] under “Program Requirements” with respect to any Application.

5. Failure/Lapse of Certification. At all times during the Term, Publisher will not, and will [*] ensure that Affiliates do not, include Links and/or Results in or through any Application for which Certification has lapsed or has been denied or revoked by the Certification Provider.

6. Representations and Warranties. Publisher represents and warrants that at all times during the Term [*].

7. Notification. Each party will promptly inform the other party of any third party claim or governmental action or investigation of which the party becomes aware that is related to an Application or the distribution of an Application.

8. Misc. In the event of a conflict between the terms of this Software Attachment and any other provision of the Agreement, the terms of this Software Attachment will govern as to Applications. In the event that any applicable law or regulation contains more stringent requirements than this Software Attachment, the more stringent requirements will apply.

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment D – Page 1

SOFTWARE MOCKUPS

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment D – Page 2

EXHIBIT 1 TO SOFTWARE ATTACHMENT

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment E – Page 1

ATTACHMENT E - SYNDICATION ATTACHMENT

1. Definitions.

(a) “Affiliate” means a third party for whom Publisher syndicates or desires to syndicate Links and Results and is approved by Overture under the terms and conditions of this Agreement.

(b) “Syndicated Site” means an Affiliate website or Application that Overture approves pursuant to Exhibit 1. Additional or successor sites owned or operated by Affiliates must each be individually approved for syndication pursuant to Exhibit 1.

2. Links and Results. If set forth in the SO (except with respect to [*], Publisher may syndicate the following Links and Results to Syndicated Sites:

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

3. Approval; Monitoring Process. Publisher must obtain Overture’s written approval of each Affiliate and each Syndicated Site pursuant to Exhibit 1. Publisher will not provide Links or Results to any Affiliate or any Syndicated Site that has not been approved by Overture in writing or for which Overture has terminated its approval. Publisher may request approval of new Affiliates and Syndicated Sites by following the procedures set forth in Exhibit 1 to this Syndication Attachment, which procedures may be subject to change upon mutual agreement of the parties. [*], Overture may accept or reject any proposed Affiliate and any proposed Syndicated Site [*]. Affiliates and Syndicated Sites approved as of the Start Date are listed in Exhibit 3 to this Syndication Attachment.

4. Required Terms. Publisher’s written agreement with each Affiliate will include the Affiliate’s explicit agreement that [*].

5. Publisher’s Additional Obligations.

(a) Unless Overture consents in writing, Publisher will not permit Affiliates to [*]. If Overture agrees to allow an Affiliate to [*], Publisher will require the Affiliate to meet all of Publisher’s obligations under this Agreement pertaining to [*] and such other guidelines as Overture may require.

(b) Publisher will ensure that neither Links nor Results are provided to any third party other than an Affiliate that owns a Syndicated Site or Application, and are not syndicated or distributed beyond the Syndicated Site or Application without Overture’s prior written approval in each instance. [*].

(c) Publisher will [*] ensure that the Affiliate complies with the provisions of its agreement with the Affiliate and with this Agreement. For clarity, the parties agree that [*].

(d) Publisher will maintain the technical ability to [*].

(e) Publisher will provide Overture with a list of Internet Protocol addresses of its own servers and Affiliates’ servers used to send Queries to Overture (“Recognized Servers”) and promptly notify Overture in writing of any changes or additions to such list. Overture will have no obligation to make payment to Publisher with respect to Queries from servers that are not Recognized Servers.

(f) [*]

(g) Upon Overture’s request, Publisher will provide a list of all Affiliates and Syndicated Sites. [*].

6. Exclusion of Revenue. Overture reserves the right to exclude from [*] and Overture’s calculation of any amounts owed to Publisher any [*] generated from [*].

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment E – Page 2

7. No Restrictions. Subject to and except for each party’s confidentiality obligations under Section 13 of Attachment B, nothing in this Agreement will prevent either party or its Related Parties from marketing or providing any product or service directly to any third party, including any prospective or approved Affiliate.

8. Misc. In the event of a conflict between the terms of this Syndication Attachment and any other provision of the Agreement, the terms of this Syndication Attachment will govern as to syndication of Links and Results.

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment E – Page 3

EXHIBIT 1 TO SYNDICATION ATTACHMENT

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Exh. 1 to Attachment E - Page 1

EXHIBIT 2 TO SYNDICATION ATTACHMENT

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Exh. 3 to Attachment E - Page 1

EXHIBIT 3 TO SYNDICATION ATTACHMENT

APPROVED SYNDICATED SITES

(as of October 17, 2007)

US [*]:

[*]

US [*]:

[*]

Non US and Non European [*]:

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Exh. 3 to Attachment E - Page 1

ATTACHMENT F - [*] ATTACHMENT

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment F - Page 1

EXECUTION COPY

YAHOO! SEARCH MARKETING - YAHOO! PUBLISHER NETWORK SERVICE ORDER #1-9935871

ATTACHMENT G - [*] ATTACHMENT

[*]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

Attachment G - Page 1

EX-10.42

EXHIBIT 10.42

CERTAIN INFORMATION FROM THIS DOCUMENT HAS BEEN REDACTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST BY INFOSPACE, INC. UNDER 17 C.F.R. §§ 200.80(B)(4), 200.83 AND 240.24B-2 AND SUBMITTED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

AMENDMENT #1 TO

YAHOO! PUBLISHER NETWORK SERVICE ORDER # 1-9935871

THIS AMENDMENT #1 (this “Amendment #1”) is entered into as of January 31, 2008 (the “Amendment #1 Effective Date”) by and among Overture Services, Inc., Overture Search Services (Ireland) Limited, InfoSpace Sales LLC, InfoSpace Europe Limited and InfoSpace, Inc. (as guarantor under Section 22 of Attachment B to the Agreement), and amends that certain Yahoo! Publisher Network Service Order #1-9935871 by and among the foregoing parties effective as of November 26, 2007 (the “Original Agreement”). Capitalized terms not defined herein have the meanings set forth in the Original Agreement, except as amended by this Amendment #1.

1. The Original Agreement is hereby amended such that the Agreement shall terminate as to [*] on [*].

2. Except as amended by this Amendment #1, the Original Agreement will remain in full force and effect in accordance with its terms. In the event of a conflict between the terms of this Amendment #1 and the Original Agreement, the terms of this Amendment #1 will govern.

This Amendment #1 has been executed by the duly authorized representatives of the parties as of the Amendment #1 Effective Date.

OVERTURE SERVICES, INC.,		INFOSPACE SALES LLC
By:	/s/ Matt Whiteley	By:	/s/ Michael Glover
Name:	Matt Whiteley	Name:	Michael Glover
Title:	Director, BD	Title:	VP, Business Dev
OVERTURE SEARCH SERVICES (IRELAND) LIMITED		INFOSPACE EUROPE LIMITED
By:	/s/ Matt Whiteley	By:	/s/ Michael Glover
Name:	Matt Whiteley	Name:	Michael Glover
Title:	Director, BD	Title:	VP, Business Dev
		INFOSPACE, INC. (as guarantor under Section 22 of Attachment B to the Agreement)
		By:	/s/ Michael Glover
		Name:	Michael Glover
		Title:	VP, Business Dev

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

CONFIDENTIAL

EX-10.43

EXHIBIT 10.43

CERTAIN INFORMATION FROM THIS DOCUMENT HAS BEEN REDACTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST BY INFOSPACE, INC. UNDER 17 C.F.R. §§ 200.80(B)(4), 200.83 AND 240.24B-2 AND SUBMITTED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

AMENDMENT #2 TO

YAHOO! PUBLISHER NETWORK SERVICE ORDER # 1-9935871

THIS AMENDMENT #2 (this “Amendment #2”) is entered into as of November 1, 2008 (the “Amendment #2 Effective Date”) by and among Yahoo! Inc. (as successor-in-interest to Overture Services, Inc.), Overture Search Services (Ireland) Limited (“OSSIL” and together with Yahoo! Inc., “Yahoo!”), InfoSpace Sales LLC, InfoSpace Europe Limited and InfoSpace, Inc. (as guarantor under Section 22 of Attachment B to the Agreement), and amends that certain Yahoo! Publisher Network Service Order #1-9935871 by and among the foregoing parties effective as of November 26, 2007, as amended (the “Original Agreement”). Capitalized terms not defined herein have the meanings set forth in the Original Agreement except as amended by this Amendment #2.

1. All references in the Original Agreement to the entity “Overture,” “OSI” and “Overture Related Party” are hereby deleted and replaced with “Yahoo!,” “Yahoo! Inc.” and “Yahoo! Related Party,” respectively.

2. All references in the Original Agreement to “Yahoo! Search Marketing” are hereby deleted.

3. [*]

4. The “Start Date” and “End Date” sections of the Service Order are hereby deleted in their entirety and replaced with the following (changes shown in italics):

Start Date:	End Date:
U.S. Territory	U.S. Territory
Initial Term: November 26, 2007 Renewal Term: July 1, 2008	Initial Term: June 30, 2008 Renewal Term: [*], 2011
For All Other Territories	For All Other Territories
Initial Term: November 26, 2007 Renewal Term: November 1, 2008	Initial Term: October 31, 2008 Renewal Term: [*], 2011

5. The “Links and Results” section of the Service Order is hereby amended to include the following:

“Notwithstanding anything to the contrary in this Agreement, the [*] implementation shall not apply with respect to European countries in the Territory.”

6. As of [*] and applicable to [*] generated following [*], Part II of the “Compensation” section of the Service Order is hereby deleted in its entirety and replaced with the following:

II. Compensation for [*] outside of the United States of America and Canada:

Overture will pay Publisher [*] set forth in the tables below with respect to [*]:

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

1 CONFIDENTIAL

[*]	[*]
[*]	[*]
[*]	[*]
[*]	[*]

III. Compensation for [*] outside of the United States of America, Canada and [*]:

Overture will pay Publisher [*] with respect to [*].

For purposes of clarification, Yahoo will pay Publisher [*] set forth in the tables in the Original Agreement prior to this Amendment #2 with regard to [*] generated on or before [*].

7. Section 21 of Attachment B is hereby amended to include the following at the end of such section:

“(m) In addition to the rights set forth elsewhere in this Agreement, Yahoo! may terminate this Agreement with respect the [*] market located within the Territory upon [*] notice for any reason or no reason, provided that Yahoo! may exercise such termination right upon [*] notice for reasons related to [*] with respect to the [*] market.”

8. Except as amended by this Amendment #2, the Original Agreement will remain in full force and effect in accordance with its terms. In the event of a conflict between the terms of this Amendment #2 and the Original Agreement, the terms of this Amendment #2 will govern.

[SIGNATURE PAGE FOLLOWS]

* Information redacted pursuant to a confidential treatment request by InfoSpace, Inc. under 17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2 and submitted separately with the Securities and Exchange Commission.

2 CONFIDENTIAL

This Amendment #2 has been executed by the duly authorized representatives of the parties as of the Amendment #2 Effective Date.

YAHOO! INC.		INFOSPACE SALES LLC
By:	/s/ Matthew Whiteley	By:	/s/ David Binder
Name:	Matthew Whiteley	Name:	David Binder
Title:	Sr Director, BD	Title:	CFO
OVERTURE SEARCH SERVICES (IRELAND) LIMITED		INFOSPACE EUROPE LIMITED
By:	/s/ Matthew Whiteley	By:	/s/ David Binder
Name:	Matthew Whiteley	Name:	David Binder
Title:	Sr Director, BD	Title:	CFO
		INFOSPACE, INC. (as guarantor under Section 22 of Attachment B to the Agreement)
		By:	/s/ David Binder
		Name:	David Binder
		Title:	CFO

3 CONFIDENTIAL

EX-21.1

Exhibit 21.1

Subsidiaries of the registrant

InfoSpace Sales LLC, a Delaware limited liability company

InfoSpace Europe Limited, a United Kingdom company

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-69165, 333-81593, 333-37252, 333-42340, 333-58420, 333-58422, 333-116641, and 333-139284 on Form S-8 of our reports dated March 2, 2009, relating to the financial statements of InfoSpace, Inc. and the effectiveness of InfoSpace, Inc.’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of InfoSpace, Inc. for the year ended December 31, 2008.

/s/ DELOITTE & TOUCHE LLP

Seattle, Washington

March 2, 2009

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Principal Executive Officer

I, William J. Lansing, certify that:

1. I have reviewed this annual report on Form 10-K of InfoSpace, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 2, 2009

/s/ William J. Lansing

William J. Lansing

Chief Executive Officer and President

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Principal Financial Officer

I, David B. Binder, certify that:

1. I have reviewed this annual report on Form 10-K of InfoSpace, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 2, 2009

/s/ David B. Binder

David B. Binder

Chief Financial Officer and Treasurer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, William J. Lansing, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K of InfoSpace, Inc. for the year ended December 31, 2008 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents in all material respects the financial condition and results of operations of InfoSpace, Inc.

Dated: March 2, 2009	By:	/s/ William J. Lansing
	Name:	William J. Lansing
	Title:	Chief Executive Officer and President
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David B. Binder, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K of InfoSpace, Inc. for the year ended December 31, 2008 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents in all material respects the financial condition and results of operations of InfoSpace, Inc.

Dated: March 2, 2009	By:	/s/ David B. Binder
	Name:	David B. Binder
	Title:	Chief Financial Officer and Treasurer
		(Principal Financial Officer)