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Summary:

Well, the deal has gone through after rumors for the last two months — InfoSpace (NSDQ: INSP) has sold its mobile services business to Motr…

Well, the deal has gone through after rumors for the last two months — InfoSpace (NSDQ: INSP) has sold its mobile services business to Motricity for $135 million in cash, meaning that the company will now be solely focused on online search. The mobile division has been seeing steadily falling revenue for a while now, although the mobile services part that Motricity has bought grew from $9.1 million in Q206 to $13.4 million a year later, which may give you some idea on how the deal was valued.

INSP also recently sold its online directory business for $225 million in cash. Once the transaction closes InfoSpace expects to have $550 million in cash, and will return part of it back to investors as a special cash distribution.

On its side, Motricity raised the funds from VC investment to buy the InfoSpace business, and there’s some gossip that this may give the company enough revenues to get a decent IPO going. Motricity said the deal expands its customer base to include 11 of the 13 mobile-phone carriers in North America, including AT&T (NYSE: T) and Verizon (NYSE: VZ) Wireless.

Upon closing, Ryan Wuerch will remain as CEO of Motricity and Steve Elfman, current EVP of InfoSpace’s mobile services business unit, will become President, COO of Motricity. The deal was funded primarily by financier Carl Icahn, who first invested in Motricity earlier this year, and Chicago VC firm Advanced Equities, which has led previous rounds of financing for the company.

More info in the releases here and here.

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By James Quintana Pearce

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  1. Wow, amidst all the investment opportunities for Motricity and its board, they chose the hemmhoraging (or hemmorhoidal) assets of Infospace — yes, that dog. Now they are stirring up IPO rumours — this is one Amp'd house of cards with Humpty Dumpty sitting on top…everyone in this cloistered and incestuous industry knows that ATT is cutting margins for content distributors and aggregators and off-deck is still pitifully small — time to get out of mobile content!

  2. make that one cash rich dog, i.e.,..infospace now has in excess of $550 million in cash. ;)..bow-wow!

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