SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
November 8, 2005

Via EDGAR

Mr. Brad Skinner
Accounting Branch Chief
Securities and Exchange Commission
Washington, D.C. 20549

Re:      Inforte Corp.
         Form 10-K for Fiscal Year Ended December 31, 2004
         Filed March 31, 2005
         Form 8-K Filed April 22, 2005
         Form 8-K Filed July 28, 2005
         File No. 000-29239

Dear Mr. Skinner:

Thank you for your letter to Inforte Corp. ("Inforte") dated October 25, 2005.
On behalf of Inforte, we submit the following responses to the comments set
forth in your letter:

Form 10-K for the Fiscal Year Ended December 31, 2004

Item 6. Selected Financial Data, page 13

1. WE HAVE READ YOUR RESPONSE TO PRIOR COMMENT 1 AND WE DO NOT BELIEVE THAT YOU
HAVE ADEQUATELY SUPPORTED EXCLUDING ANY DISCLOSURE RELATED TO THE REIMBURSABLE
EXPENSES. ITEM 303 OF REGULATION S-K REQUIRES THAT YOU DESCRIBE SIGNIFICANT
COMPONENTS OF REVENUES OR EXPENSES THAT SHOULD BE DESCRIBED IN ORDER TO
UNDERSTAND YOUR RESULTS OF OPERATIONS. WE BELIEVE THAT THESE REIMBURSABLE
EXPENSES ARE MATERIAL TO AN UNDERSTANDING OF YOUR REVENUES, EXPENSES AND, IN
PARTICULAR, YOUR MARGINS. ACCORDINGLY, WE BELIEVE THAT THE NATURE OF THE
REIMBURSEMENTS REVENUE IS NOT SUCH THAT IT MAY BE EXCLUDED FROM YOUR SELECTED
FINANCIAL DATA UNDER ITEM 301 OF REGULATION S-K. IN ADDITION, "NET REVENUE" AND
"OPERATING EXPENSES BEFORE REIMBURSEMENTS" APPEAR TO BE NON-GAAP FINANCIAL
MEASURES AS DEFINED WITHIN ITEM 10 OF REGULATION S-K.

In all our future filings with the SEC we will incorporate a new income
statement format that will show reimbursements and will also calculate gross
profit. Appendix A, attached to this letter, presents an example of the Form
10-K section "Item 6 Selected Financial Data" using the new income statement
format that we plan to adopt. This format will be adopted in all relevant
sections of the Forms 10-K and 10-Q as well as in all press releases where
results of operations are presented and discussed. Although we do not consider
reimbursements to be "significant" or "material" we also recognize the fact that
the rules according to Generally Accepted Accounting Principles (GAAP) require
reimbursements to be reported as a component of revenue. Going forward, it will
also be our intention to discuss reimbursements in the Management Discussion and
Analysis section. As part of this disclosure we intend to continue to explain
why we consider zero-margin pass-through reimbursable expenses to not be a
meaningful measure of economic activity for the period reported.

<PAGE>

Liquidity and Capital Resources
-------------------------------

2. WE HAVE READ YOUR RESPONSE TO PRIOR COMMENTS 3 AND 10 AND DO NOT BELIEVE THAT
YOU HAVE ADEQUATELY SUPPORTED YOUR USE OF "CASH AND MARKETABLE SECURITIES PER
COMMON SHARE."

Our mentioning of this non-GAAP measure was only prompted by frequent discussion
of that metric on conference calls with analysts and investors. Moreover, we
explained how it was derived and we did not use it to justify or demonstrate
trends in our financial results or financial condition. In the future we plan to
refrain from disclosing this metric in filings with the sec or in any press
releases discussing results from operations and financial condition.

Consolidated Financial Statements
---------------------------------

Consolidated Statements of Operations, page 28
----------------------------------------------

3. PLEASE DIRECT US TO THE GUIDANCE THAT EXPLICITLY REQUIRES THAT YOUR INCOME
STATEMENT INCLUDE "SEVERAL EXTRA LINES." IN ADDITION, REFER US TO THE LITERATURE
THAT RELIEVES YOU OF YOUR OBLIGATION TO COMPLY WITH ITEM 302(A)(1) OF REGULATION
S-K UNDER THE CIRCUMSTANCES THAT YOU DESCRIBE IN YOUR RESPONSE TO PRIOR COMMENT
5.

As stated in our previous response, we have already added extra lines to the
income statement not as a result of a specific guidance, but to enhance the
reader's understanding of the performance for the relevant period. The extra
lines allow the reader to modify the data to exclude expense reimbursements from
their calculations. Our choice of presenting the income statement in this way is
in accordance with the common practices in our industry and, in our opinion, is
more meaningful given the characterization of reimbursable expenses. However, we
recognize that Item 302(a)(1) of Regulation S-K requires that statements of
operations include a line item called "gross profit." As stated in Item 1 above,
we plan to adopt a new format for presenting our future Consolidated Statement
of Operations data, an example of which is attached to this letter as Appendix
A.

Note 2. Significant Accounting Policies
---------------------------------------

Revenue Recognition, page 32
----------------------------

4. PLEASE CONFIRM TO US THAT YOU WILL INCLUDE THE ADDITIONAL DISCLOSURE PROVIDED
IN YOUR RESPONSE TO PRIOR COMMENT 6 IN YOUR FUTURE FILINGS.

We will provide the additional disclosure provided in our response to prior
comment 6 in our future filings. The following text is an example of the
addition to our intended discussion of Critical Accounting Policies:

"We recognize revenues related to reimbursable expenses as the reimbursable
expenses are billed. We only recognize reimbursable expenses when all of the
following three criteria are met: persuasive evidence exists that we have an

<PAGE>

agreement that includes the reimbursement of such expenses, the reimbursable
expenses have been incurred, and collectibility is reasonably assured."

Form 8-K Filed April 22, 2005
-----------------------------

5. WE HAVE READ YOUR RESPONSE TO PRIOR COMMENT 8 AND DO NOT AGREE THAT YOU
ACHIEVED THE APPROPRIATE DISCLOSURE THROUGH THE PRESENTATION OF THE ACCOMPANYING
FINANCIAL TABLES. PLEASE SUPPLEMENT YOUR RESPONSE BY PROVIDING US WITH PROPOSED
REVISIONS USING THE SECOND PARAGRAPH OF YOUR FIRST QUARTER 2005 EARNINGS RELEASE
AS AN EXAMPLE.

In situations where we include supplementary non-GAAP information, such as the
effect of infrequent or unusual transactions on revenue or earnings, we will use
a presentation similar to the following paragraph (as requested we have used the
second paragraph of our first quarter 2005 earnings release as the example):

"First quarter revenue was $9.5 million, revenue before reimbursements (net
revenue) was $8.7 million, and diluted earnings per share (EPS) were negative
$0.07. Supplemental non-GAAP diluted earnings per share (EPS) were $0.00. The
non-GAAP supplemental information excludes the costs of the capital
restructuring during the first quarter, which included an exchange of
outstanding options for cash and restricted stock and the granting of additional
common stock. This information is provided to enhance the understanding of the
Company's financial performance and is reconciled to the Company's GAAP
information in the accompanying tables at the end of this press release."

6. PLEASE ADDRESS THE FOLLOWING RELATED TO YOUR RESPONSE TO PRIOR COMMENT 9 AND
YOUR NON-GAAP DISCLOSURES:

   O     YOUR "RECONCILIATION" APPEARS TO INCLUDE A NUMBER OF NON-GAAP MEASURES
         SUCH AS NON-GAAP INCOME BEFORE TAX, NON-GAAP INCOME TAX EXPENSE AND
         NON-GAAP NET INCOME FOR WHICH YOU HAVE NOT INCLUDED SPECIFIC,
         MEANINGFUL DISCLOSURES AS REQUIRED BY ITEM 10(E)(1)(I)(B), (C) AND (D)
         OF REGULATION S-K; AND

   O     PERCENTAGES CALCULATED USING A NUMERATOR THAT HAS BEEN ADJUSTED OR A
         DENOMINATOR THAT REPRESENTS "NET REVENUE" ALSO APPEAR TO BE SEPARATE
         NON-GAAP MEASURES THAT REQUIRE THE SPECIFIC DISCLOSURES DESCRIBED
         ABOVE.

We believe that the footnote provided below the Non-GAAP Supplemental
Information meets the requirements of Item 10(e)(1)(i)(C) and (D) by itemizing
the specifics of the one-time charge and also by highlighting management's view
that the information is provided to "enhance the user's overall understanding of
the company's current and future financial performance by excluding certain
items that management believes are not indicative of its core operating results
and by providing results that provide a more consistent basis for comparison
between quarters."

We intend to use the following statement in our future presentation of non-GAAP
measures:

<PAGE>

"Inforte presents the non-GAAP financial measures to complement results provided
in accordance with GAAP, as management believes these measures help illustrate
underlying trends in our business and facilitate comparisons between quarters
and years. Inforte's management uses these measures to establish budgets and
operational goals that are communicated internally and externally, to manage our
business and evaluate its performance and to assess compensation for executives"

We also believe that the method of presenting the Non-GAAP Supplemental
information is in a format that, in accordance with Item 10(e)(1)(i)(B) provides
for a direct comparison of the non-GAAP to GAAP measures. The non-GAAP income
before income taxes, non-GAAP income tax expense and non-GAAP net income are all
under the heading "Supplemental Non-GAAP Information (UNAUDITED)" and as such,
we believe they are clearly identified as non-GAAP measures. Please note that
the only difference between the non-GAAP number for income before income tax
expense and the GAAP income before income tax expense number is the item
described in the footnote immediately below the reconciliation tables. In the
future, if we decide to present non-GAAP measures, we intend to clearly indicate
that fact, item by item, so that it would be even clearer to the reader that the
numbers presented are adjusted, non-GAAP figures. Specifically, we will add
"non-GAAP" against the description of each adjusted number and then provide a
short reconciliation between the GAAP and the non-GAAP figures.

The percentages following both the GAAP Statement of Operations and the non-GAAP
supplemental information are indeed calculated by using a non-GAAP measure,
revenue before reimbursements or "net revenue" and are therefore non-GAAP
measures. In future filings with the SEC and also in all press releases
presenting results from operations we will not include any measures called
"margin" unless they are calculated using unadjusted measures as defined by
GAAP. We may however use certain measures in our presentations, which use net
revenue as the common denominator. We believe this will enhance our readers'
understanding of historical trends and provide them the ability to do financial
analysis based upon controllable and comparable revenue and expense numbers. We
will clearly indicate and describe the method used in the calculation of any
such measures.

If you have any questions or wish to discuss any of our response further, please
do not hesitate to contact the undersigned at (312) 233-9292.

Regards,

/s/ Nick Heyes

Nick Heyes
Chief Financial Officer

<PAGE>

APPENDIX A

ITEM 6.     SELECTED FINANCIAL DATA

         The following selected financial data should be read in conjunction
with our consolidated financial statements and related notes and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this Form 10-K. The consolidated statement of operations
data for the years ended 2002, 2003 and 2004 and the balance sheet data as of
December 31, 2003 and 2004 are derived from our audited consolidated financial
statements, which are included elsewhere in this Form 10-K. The consolidated
statement of operations data for the years ended 2000 and 2001 and the balance
sheet data as of December 31, 2000, 2001 and 2002 are derived from our audited
consolidated financial statements, which are not included in this Form 10-K.

<TABLE>
<CAPTION>
                                                                                Year ended December 31,
                                                                  2000        2001         2002         2003         2004
                                                                          (in thousands, except per share data)
<S>                                                           <C>        <C>          <C>          <C>          <C>
   Consolidated Statement of Operations Data
   Revenues:
       Revenue before reimbursements (net revenue)            $  63,839  $   47,736   $   40,355   $   32,655   $   43,944
       Reimbursements                                            10,064       6,260        5,697        4,742        6,106
   Total revenues                                                73,903      53,996       46,052       37,397       50,050
   Cost of services:
       Project personnel and related expenses                    28,182      26,334       19,934       17,263       25,735
       Reimbursements                                            10,064       6,260        5,697        4,742        6,107
   Total cost of services                                        38,246      32,594       25,631       22,005       31,841
   Gross profit                                                  35,657      21,402       20,421       15,392       18,209

   Other operating expenses:
       Sales and marketing                                        8,584       7,073        6,052        4,644        4,777
       Recruiting, retention and training                         6,360       2,869        1,222          743        1,341
       Management and administrative (1)                         12,831      13,207       12,884        9,437       14,111
       Non-cash, non-recurring stock compensation expense            --       1,374           --           --           --
            Total other operating expenses                       27,775      24,523       20,158       14,824       20,229
   Operating income (loss)                                        7,882      (3,121)         263          568       (2,020)
   Interest income, net and other                                 3,387       3,433        2,124        1,380        1,084
   Income (loss) before income taxes                             11,269         312        2,387        1,948         (936)
   Income tax expense (benefit)                                   4,395         503          672          201         (372)
   Net income (loss)                                          $   6,874  $     (191)  $    1,715   $    1,747   $     (564)
   Net income (loss) per share:
       Basic                                                  $    0.57  $    (0.02)  $     0.15   $     0.16   $    (0.05)
       Diluted                                                $    0.51  $    (0.02)  $     0.15   $     0.16   $    (0.05)
   Weighted average common shares outstanding:
       Basic                                                     12,051      12,472       11,315       10,898       11,045
       Diluted                                                   13,501      12,472       11,647       11,018       11,045
   Reconciliation of net income on a GAAP
       basis to Non-GAAP supplemental net income:
   Net income (loss)                                                           (192)
   Add:
       Non-cash, non-recurring stock compensation                             1,374
            expense(2)
   Non-GAAP supplemental net income                                      $    1,182
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                Year ended December 31,
                                                                  2000        2001        2002         2003         2004
                                                                         (in thousands, except per share data)
<S>                                                           <C>        <C>          <C>          <C>          <C>
Balance Sheet Data (at period end):
Cash and short-term and long-term marketable securities       $  82,997  $   75,117