Rumors Of Major Cutbacks Swirl Around Motricity—What's The Deal?

Emotions are running high after rumors surfaced that Durham, N.C.-based Motricity might be cutting up to a third of its 650-person workforce and may relocate its headquarters to the Seattle-area following its $135 million purchase of Bellevue-based InfoSpace's (NSDQ: INSP) mobile division. Given the flurry of comments we received on our original post detailing the shake-out, we thought now would be a good time to provide some context and background on the two companies since company officials have yet to fill in the details.

Motricity Fast Facts:

-- Ryan Wuerch, the company's current chairman and CEO, founded Nashville, Tenn,-based PowerByHand in 2001, which later became Motricity following a number of mergers and acquisitions.

-- Has raised more than $380 million in venture capital, including funds from investor activist Carl Icahn. That included a $180 million round in December to fund the $135 million all-cash acquisition of InfoSpace mobile services business. It's next move could be to file for an initial public offering.

-- Motricity's main platform, called Fuel 5 Suite, helps operators and content providers deal with mobile content storefronts, where ringtone, games and graphics downloads, subscriptions, community applications and data services are sold to consumers.

-- Employees: about 350 mostly based in Durham, N.C.

InfoSpace Fast Facts:

-- Steve Elfman, former EVP of InfoSpace's mobile services business unit, is now the president and COO of Motricity, and is based out of Bellevue.

-- InfoSpace main platform, called mCore, mostly provides portal services to help mobile operators deliver search, messaging, storefront and the managed Web services.

-- The sale of its mobile business was initiated after one of its big carrier partners (largely assumed to be AT&T) decided to create direct partnerships with music labels rather than use InfoSpace as a ringtone aggregator. InfoSpace total mobile revenues in 2006 were $185 million, but without ringtone sales, InfoSpace core mobile services generated about $37 million.

-- Employees: About 250, mostly based in Bellevue.

Together:

-- Motricity and InfoSpace's customer base is fairly extensive. They serve 11 of the top 13 carriers in North America including AT&T (NYSE: T), Verizon Wireless (NYSE: VZ), Sprint (NYSE: S), T-Mobile, Bell Mobility, Tracfone and Alltel (NYSE: AT). The two power storefronts and communities for nine of the top 13 carriers in North America, and they power five of the top six carrier "start screens" which result in billions of page views a year.

-- One point of merger contention—there are no direct flights between Seattle and Raleigh, N.C. 

Related

• Motricity May Slash As Many As 200 Employees; May Move To Bellevue: Report