Revenue for the fourth quarter and full year up 34% and 7% from 2010

Distribution revenue for the fourth quarter and full year up 69% and 24% from 2010

Distribution revenue from new partners launched in 2011 of $11.8 million up $8.6 million or 270 percent from comparable new partner revenue in 2010

Adjusted EBITDA for the fourth quarter and full year up 23% and 13% from 2010

Revenues for the fourth quarter of 2011 were $66.6 million, compared to revenues of $49.7 million for the fourth quarter of 2010. Revenues for full year 2011 were $228.8 million, compared to revenues of $214.3 in 2010.

Adjusted EBITDA (defined below) for the fourth quarter of 2011 was $10.2 million, compared to $8.3 million for the fourth quarter of 2010. Adjusted EBITDA for full year 2011 was $36.6 million, compared to $32.5 million for full year 2010.

Non-GAAP net income (defined below) for the fourth quarter of 2011 was $5.3 million or $0.13 per diluted share, compared to $19.2 million, or $0.52 per diluted share, for the fourth quarter of 2010. Non-GAAP net income for full year 2011 was $18.5 million, or $0.48 per diluted share, compared to $17.8 million, or $0.48 per diluted share, for full year 2010. (Note, the fourth quarter and full year 2010 results include a net gain of $19.0 million, or $0.51 per diluted share, from a litigation settlement.)

Net income for the fourth quarter of 2011 was $23.6 million, or $0.59 per diluted share, compared to net income of $9.1 million, or $0.25 per diluted share, for the fourth quarter of 2010. Net income for full year 2011 was $22.3 million, or $0.58 per diluted share, compared to net income of $4.7 million or $0.13 per diluted share, for full year 2010. (Note, 2011 figures include a tax benefit of $19.6 million, due to the release of the valuation allowance on deferred tax assets. The 2010 figures, as noted above, include a net gain from a litigation settlement of $19.0 million. Also, net income for the fourth quarter 2010 and full years 2011 and 2010 includes losses on discontinued operations.)

Cash, cash equivalents, and marketable securities as of December 31, 2011 totaled $293.6 million. As of the end of the quarter, the Company had no debt obligations. On January 31, 2012 the Company completed the acquisition of TaxACT. Upon completion of the transaction, the Company had more than $100 million cash and short-term investments and $100 million of debt.

Revenues:

Cost of sales:

Gross profit

Expenses and other income:

Engineering and technology ⁽²⁾

Sales and marketing ⁽²⁾

General and administrative ^{(2) (3)}

Depreciation

Other loss (income) net ⁽⁴⁾

Total expenses and other loss (income)

Income from continuing operations before income taxes

Income tax benefit (expense)

Income from continuing operations

Discontinued operations:⁽¹⁾

Loss from discontinued operations, net of taxes ⁽²⁾

Loss on sale of discontinued operations, net of taxes

Net income

Earnings per share - Basic

Income from continuing operations

Loss from discontinued operations

Loss on sale of discontinued operations

Net income per share - Basic

Earnings per share - Diluted

Income from continuing operations

Loss from discontinued operations

Loss on sale of discontinued operations

Net income per share - Diluted

Weighted average shares outstanding used in computing basic income per share

Weighted average shares outstanding used in computing diluted income per share

In the year ended December 31, 2011, the Company completed the sale of its Mercantila e-commerce business. The operating results of that business have been presented as discontinued operations for all periods presented. In the year ended December 31, 2011, the Company recorded a $1.3 million income tax benefit related to discontinued operations. In the three months and year ended December 31, 2010 the Company recorded income tax benefits related to discontinued operations of $1.1million and $1.3 million, respectively. In the year ended December 31, 2011, the Company recorded a loss, net of an income tax benefit of $5.1 million, on the sale of the Mercantila business. Revenue, operating expenses and income taxes, loss from discontinued operations and the loss on sale of these discontinued operations are presented below (in thousands):

E-Commerce

Revenue

Operating expenses and income taxes

Loss from discontinued operations, net of taxes

Loss on sale of discontinued operations, net of taxes

In the three months and year ended December 31, 2010, stock-based compensation expense associated with the acceleration of vesting of equity awards for a departed executive amounted to $3.4 million, which was allocated to general and administrative expense. Stock-based compensation expense for the year ended December 31, 2011 and 2010 is allocated among the following captions (in thousands):

Cost of sales

Engineering and technology

Sales and marketing

General and administrative

Discontinued operations

Total stock-based compensation expense

In the three months and year ended December 31, 2010, the Company recorded charges of $1.7 million and $4.1 million, respectively, relating to executive cash severance.

In the three months and year ended December 31, 2011, the Company recorded charges of $1.0 million and $3.0 million, respectively, as a result of the increase in the estimated fair value of a contingent liability related to operation of the assets acquired on April 1, 2010 from Make The Web Better. In the three months and year ended December 31, 2010 the Company recorded charges of $1.5 million and $5.0 million, respectively, as a result of the increase in the estimated fair value of a contingent liability related to operation of the assets acquired on April 1, 2010 from Make The Web Better. In the year ended December 31, 2011, the Company recorded a $1.5 million gain on the resolution of a contingency. In the three months and year ended December 31, 2010, the Company recorded a $19.0 million net gain on a litigation settlement.

ASSETS

Current assets:

Cash and cash equivalents

Short-term investments, available-for-sale

Accounts receivable, net

Other receivables, net

Prepaid expenses and other current assets, net

Assets of discontinued operations

Total current assets

Property and equipment, net

Goodwill

Deferred tax asset, net

Other intangible assets, net

Other long-term assets, net

Total assets

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

Accrued expenses and other current liabilities

Liabilities from discontinued operations

Total current liabilities

Other long-term liabilities

Total liabilities

Stockholders’ equity:

Common stock

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive income (loss)

Total stockholders’ equity

Total liabilities and stockholders’ equity

Summary of cash, cash equivalents, and short-term investments:

Cash and cash equivalents

Short-term investments, available-for-sale

Cash, cash equivalents, and short-term investments

Operating activities:

Net income

Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:

Loss on sale of discontinued operations

Loss from discontinued operations

Stock-based compensation

Warrant-related stock-based compensation

Depreciation and amortization of intangible assets

Earn-out contingent liability adjustments

Common stock retired relating to litigation settlement

Gain on resolution of contingent liability

Foreign currency translation gains, net

Deferred income taxes

Excess tax benefits from stock-based award activity

Unrealized amortization of premium or accretion of discount on investments, net

Loss on disposal of assets

Other

Cash provided (used) by changes in operating assets and liabilities:

Accounts receivable

Other receivables

Prepaid expenses and other current assets

Other long-term assets

Accounts payable

Accrued expenses and other current and long-term liabilities

Net cash provided by operating activities of continuing operations

Investing activities:

Purchases of property and equipment

Other long-term assets

Business acquisition, net of cash acquired

Proceeds from the sale of assets

Proceeds from sales of investments

Proceeds from maturities of investments

Purchases of investments

Net cash provided (used) by investing activities of continuing operations

Financing activities:

Proceeds from stock option exercises and issuance of stock through employee stock purchase plan

Proceeds from the sale of common stock

Tax payments from shares withheld upon vesting of restricted stock units

Earn-out payments for business acquisition

Repayment of capital lease obligation

Excess tax benefits from stock-based award activity

Net cash provided by financing activities of continuing operations

Discontinued operations:

Net cash used by operating activities attributable to discontinued operations

Net cash used by investing activities attributable to discontinued operations

Net cash used by discontinued operations

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents:

Beginning of period

End of period

Net income ⁽²⁾

Discontinued operations

Depreciation and amortization of intangible assets

Stock-based compensation

Other loss (income), net ⁽³⁾

Income tax expense (benefit)

Adjusted EBITDA ⁽⁴⁾

Net income ⁽²⁾

Discontinued operations

Income from continuing operations ⁽²⁾

Non-cash income tax expense (benefit) from continuing operations⁽¹⁾

Non-GAAP net income ⁽⁴⁾

Income from continuing operations - diluted

Non-cash income taxes per share - diluted ⁽⁴⁾

Non-GAAP net income per share - diluted ⁽⁴⁾

Net income

Depreciation and amortization of intangible assets

Stock-based compensation

Other loss, net ⁽⁵⁾

Income tax expense

Adjusted EBITDA

InfoSpace’s Adjusted EBITDA is calculated by adjusting net income determined in accordance with generally accepted accounting principles (“GAAP”) to exclude the effects of discontinued operations (including loss from discontinued operations, net of taxes, and loss on sale of discontinued operations, net of taxes), income taxes, depreciation, amortization of intangible assets, stock-based compensation expense, and other loss,(income), net (which includes such items as litigation settlements, adjustments to the fair values of contingent liabilities related to business combinations, gains on resolutions of contingencies, interest income, foreign currency gains or losses, and gains or losses from the disposal of assets), as detailed above. InfoSpace’s management believes that Adjusted EBITDA provides meaningful supplemental information regarding the Company’s performance by excluding certain expenses and gains that management believes are not indicative of its core business operating results. InfoSpace uses this non-GAAP financial measure for internal management purposes, when publicly providing guidance on possible future results, and as a means to evaluate period-to-period comparisons. InfoSpace believes that Adjusted EBITDA is a common measure used by investors and analysts to evaluate its performance, that it provides a more complete understanding of the results of operations and trends affecting the Company’s business when viewed together with GAAP results, and that management and investors benefit from referring to this non-GAAP financial measure.

As presented in the Preliminary Condensed Consolidated Statements of Operations (unaudited).

Other loss (income), net, primarily consists of a litigation settlement, adjustments to the fair values of contingent liabilities related to business combinations, gains on resolutions of contingencies, interest income, interest expense, foreign currency gains or losses, and gains or losses from the disposal of assets.

Amounts previously disclosed have been revised to reflect the effect of classifying the Company’s Mercantila e-commerce business as discontinued operations.

Other loss, net, primarily consists of interest expense, interest income, foreign currency gains or losses, and gains or losses from the disposal of assets.