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Summary:

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…

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 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 (NSDQ: INSP) mobile services business. Its next move could be to file for an initial public offering.

– Motricity

  1. The problem with the whole thing (Motricity-Infospace) is that pure platform is a DOG business, period. These companies (and specially their investors) should have realized that, sooner or later, carriers will move to paying a flat fee as opposed to a revenue share per transaction on these services.

    Why should carriers spend tens of millions of dollars in services that they can get somewhere else for a few hundred grand or $1 or $2M tops? Yes, carriers are not the most dynamic of organizations but they are not stupid. Someone somewhere has a P&L;and suddenly realizes they are paying too much. History has shown that if you can count on something from a carrier is their squeezing your margin and not looking back.

    Additionally, and whether people like it or not, 600 employees for that company is extreme bureaucracy. They have competitors that do not have more than 50 and offer comparable, if not better, solutions.

    I actually posted a comment here about A YEAR AGO about Motricity and their flawed model (and platform).

    http://www.moconews.net/entry/419-sell-stock-be-sold-motricity-may-pick

    And BTW, a Moconews collaborator later came out saying 'I love Motricity and all about them' in another thread :)

    Frankly, you didn't need to be a genius to see this one coming.

    MR

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  2. Take two companies that have similar revenues and similar operating losses and put them together and you don't get a bigger company that is profitable. These guys have to cut around $20 Million of annual expenses to get to break even, and that won't make a chink in the debt that Motricity brought to the table. The layoffs will help, but they will still have to execute.

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  3. Your dog's ugly Thursday, February 28, 2008

    Why have all the posts from insiders stopped? Threats? Litigation? Speaking of litigation, speaking of the dedication to Durham and North Carolina apparently espoused by The Fearless Leader, why is the Mo using a Tennessee law firm to help wriggle out of the obligations to Symphony? What's the real low down on all that, anyway? Probably, as in most things, both parties are equally guilty.

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  4. Gag Order,

    If you read the Editors Note, Moco shut the other thread down because it devolved into name calling.

    Besides, no one was saying anything new, just reiterating the same back and forth.

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  5. Monday's the day!!! Pink slips should flow as effortlessly as the river once did at the American Tobacco complex. From what I hear they are shutting down storefronts, games and looking for a buyer for D2C. What's next a fire sale on all the comfy couches in the office?

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  6. stop bitching and get back to Monday, March 3, 2008

    re: "Wuerchless"…. why keep dead weight…that's why they're probably getting rid of unprofitable storefronts and boneheads like you.

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  7. Tuesday morning at 9:00 am….the axe is falling….

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