Motricity Takes Most Of The Hits With The InfoSpace Merger; Shelves IPO Plans

Motricity paid $135 million in October to acquire the InfoSpace mobile division, and now InfoSpace is taking over. As we reported yesterday, Motricity said it will be laying off 250 of its 600 employees and will move its headquarters to Bellevue to be with InfoSpace (NSDQ: INSP). The company will also integrate parts of Motricity’s Fuel technology into the InfoSpace mCore platform. The one main thing remaining from Motricity will be its CEO Ryan Wuerch. .

Here’s some more details about the integration based on conversations with employees at the company who preferred not to be named:

Executive changes: Motricity’s Wuerch will move to the Seattle-area to work alongside Steve Elfman, the former EVP of InfoSpace mobile, who is now serving as the president and COO. A few of Wuerch’s direct reports were offered the option to move, but haven’t yet decided on whether they’ll go. Those not offered relocation packages will be laid off. Almost all of Elfman’s direct reports in the new organization are people who reported to him before the merger.

Layoffs: Of the 250 layoffs, only a few were laid off in Bellevue, meaning that of the 350 employees in Durham, about 100 will remain. It will take nine months for the layoffs to be completed, with the first wave occurring May 3.

Headquarters move: The headquarters move also has to do with customers. One of Motricity’s big customers — T-Mobile USA — is also based in Bellevue. Likewise, Microsoft (NSDQ: MSFT), which is just a few miles away, recently purchased the search company FAST, a partner of InfoSpace.

IPO plans: The company shelved IPO plans because revenues were not high enough and the company wasn’t profitable. Together, the two companies will have about $100 million in annual revenues and will be closer to profitability when the layoffs are completed in nine months. At that time, the company will re-evaluate its opportunities, whether that means going public, or being sold.