Business executive, entrepreneur
|Born||6 September 1959|
|Alma mater||IIT Roorkee
|Occupation||Co-founder and chairman of Moon Express|
|Known for||Founder and former CEO of Infospace|
Naveen K. Jain (born September 6, 1959) is a business executive, entrepreneur and the founder and former CEO of InfoSpace. His work at InfoSpace was one of the contributors to the dot-com bubble. InfoSpace briefly became one of the largest internet companies in the American Northwest, before the crash of the dot-com bubble and a series of accounting lawsuits. After moving to Intelius, Jain co-founded Moon Express, where he is currently chairman.
Jain was born in India and grew up in a poor family. He earned an engineering degree from Indian Institute of Technology Roorkee and an MBA from XLRI Jamshedpur before moving to the United States. Initially working for several tech companies, eventually joining Microsoft in 1989. He founded InfoSpace in 1996.
Naveen Jain was born in 1959 to a Jain family. His family was poor, largely because his father, a civil engineer, refused the common practice in Indian construction projects of accepting bribes. He grew up in New Delhi and in villages in Uttar Pradesh, India.
Jain moved to Roorkee, where in 1979 he earned an engineering degree from Indian Institute of Technology Roorkee. He moved to the United States of America that same year. He looked up to businesspeople who made their own fortune, especially Bill Gates. Jain also had an early interest in space.
Jain's first job out of college in 1983 was at Burroughs (now known as Unisys) in New Jersey as part of a business-exchange program. He moved to Silicon Valley for its warmer climate and worked for "a bunch of startups" before joining Microsoft in 1989. Jain worked on OS/2, then MS-DOS, Windows NT, and Windows 95. He was awarded three patents related to Windows 95 and became best known for his work as a program manager.
Jain joined the management team for Microsoft Network, prior to its launch. According to Red Herring, he became restless after eight years at the company and said he didn't feel a single person could make a difference at a large company like Microsoft. Naveen Jain was working on the launch of Microsoft Networks (MSN), when Netscape Communications raised $2.2 billion in an initial public offering in 1996. NetScape's IPO was considered the start of the dot-com bubble, because it showed that internet companies can have large IPOs without making a profit first. Naveen quit Microsoft to start InfoSpace that year, with the aim of having his own initial public offering as quickly as possible.
Jain started InfoSpace with six employees, mostly from Microsoft, and began developing e-mail and telephone directories. InfoSpace provided content and services, such as phone directories, maps, games and information on the stock market, to websites and mobile device manufacturers. He grew the company at a low cost without funding and using co-branding strategies. Rather than try to get traffic to an InfoSpace website, sites like Lycos, Excite and Playboy embedded Infospace's features and content into their site and added an InfoSpace icon to it. InfoSpace then earned money by taking a small percentage of licensing, subscription or advertising fees.
By April 2000, InfoSpace was working with 1,500 websites, 60 content providers and 20 telecommunications companies. InfoSpace was praised by Wall Street analysts and at its peak was estimated to be worth $31 billion. It became the largest internet business in the American northwest. According to the Seattle Times, InfoSpace created "legions of young, overnight millionaires". Jain and his work at InfoSpace contributed to the inflated expectations in internet companies during the height of the dot-com bubble.
Jain's net worth grew to $8 billion. He began purchasing expensive homes and yachts. Jain owned 47 percent of InfoSpace's stock. Many lawsuits from partners and employees alleged he used promises of stock options to attract talent and business partners, but then fired employees or broke off relations without providing the promised shares. An investigation by the board found evidence that Jain may have failed to fulfill his contractual promises for stock options to seven former employees and eight business partners. Many of these cases involved employees or consultants that said they were offered deals where they could buy shares for 1 to 10 cents each, but shortly afterwards Jain tried to change the deal or fired them over a dispute without the promised stock-based compensation. Jain alleged the deals were set up such that their shares wouldn't vest until they've been an employee for a year.
Crash and fallout
As the dot-com bubble ended in March 2000, InfoSpace's stock fell from $138 to only $1.56 by July 2001. Even as the stock price declined, Jain said InfoSpace would one day have a greater market-share than Microsoft, Intel and Cisco combined. Three months later he sold $80 million of his own shares at an even lower price. Jain led a merger with Go2Net that was purchased with the shares. Shortly afterwards the founder of Go2Net quit and the company was reduced in size.
As revenues decreased, Jain indicated to investor analysts that revenues were expected to go up, even though all indicators showed a continued decline. In early 2001, InfoSpace said its revenues would go up to $360 million, then laid off 250 staff shortly afterwards. Jain and many other executives sold their shares in the company, just as the stock increased in response to investor analysts repeating Jain's positive outlook on revenues. The company then used misleading accounting practices to make it appear as though it was still growing. For example, it invested money in a company run by Jain's brother, with an agreement that his brother would also spend money on InfoSpace, a practice that was referred to as "buying revenues".
A shareholder filed a lawsuit against InfoSpace and many of its executives, including Jain, in 2001. The shareholder alleged Jain misled shareholders about the company's financials, then profited by selling his own shares at their peak. This led to a series of additional lawsuits and the board dismissed Jain from his CEO position in 2002 in response. In 2003 Jain was ordered to pay $247 million for violations in "short-swing trading rules", whereby he bought and sold stocks within six months as an employee with insider knowledge. In appeals court the Securities and Exchange Commission submitted a brief taking Jain's side, which led to a settlement for $105 million.
Jain said his stock purchasing was a mistake due to bad advice from his legal and financial advisors. Following the settlement, Jain sued his stock management company and lawyers for alleged negligence in their handling of the case, but lower courts and the Supreme Court dismissed his case.
In March 2003, InfoSpace sued Jain and others for allegedly misappropriating trade secrets from InfoSpace to start Intelius and for violating their non-compete agreement. A court found no evidence that Intelius and Infospace competed with one another and the case was dismissed. In December 2004, an $83 million settlement was reached between InfoSpace and Jain, which would result in dismissal of all the cases, including the one from the shareholder, with prejudice.
In 2003, Jain co-founded Intelius across the street from Infospace. The company sold background information on individuals. It grew to $18.1 million in revenues by 2004 and $88.5 million in 2007 with $22.5 million in profits. It filed an initial public offering in 2008. According to TechCrunch, the site was the subject of many consumer complaints, where consumers are led to believe they are answering a short survey for $10 cash back, but are actually signed up for a $20-per-month subscription. He re-formed the company under the name Inome in 2012. The company was sold in 2015 and Jain was replaced as CEO.
Jain co-founded Moon Express in August 2010. The company is attempting to build machine-operated spacecraft that can mine materials like gold, cobalt, platinum, and Helium-3 (nuclear energy fuel). It won a contract from NASA and is participating in the Google Lunar X-Prize. In 2011, Jain was awarded with the "light of India Business Leadership Award" for "visionary entrepreneurship".
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