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.


Gene Allen

How do i get refunded the 3.99 that was not authorized to be charged to my cell phone for the last ^ months please advise.


This is an interesting story:

Motricity answering critics about the management there. Heh, I love how they skirted around the issues on this one. As for the first question asked, Did Ryan receive an interest free loan from Motricity for his home? Nope, but it was very low interest, and by all accounts should be considered interest free.

Did Ryan utilize Motricity Staff for running personal errands? They said only when he is working 18 hour days on "on occassion". HA!! Ryan hadn't worked an 18 hour day in his life, and on top of that, he not only used people for running errands, such as getting his clothes and other things, he also used the IT staff to take care of his personal computers, install electronics in his house and take care of his friends computers like Nathan and the like. This happened constantly and employees who didn't agree to perform such work were threatened with firing. That's the truth, period.

The person answering the question about Ryan professing his faith in meetings obviously wasn't there at the time that it DID happen. It wasn't for long, but it happened.

Ryan and Nathan would never go anywhere without a limo. They couldn't take a taxi like the rest of us and if we had spent a cent more than what policy allowed, they would have our butts for it. They came in and changed the place from a fun place to work to a hell hole and it didn't take them long.

Anyone who didn't agree with them was threatened with being fired and they completely abused their power in terms of getting personal gain from employees. It's sad, and I can't believe the answers I saw on WRAL today. WOW.

Carl begs to differ

From today's, Icahn "admits it [investing in Motricity] probably WASN'T a good decision". Let's hope all of you rabid rah-rah folks will use this as an excuse to grow up and get over Motricity. We've got a lot of engineering and management talent around here. Let's grow in our sophistication and start inventing products and services that make money.

Here’s Primack’s note from a PEHub post:

“I did ask Icahn why he did a pure venture capital deal last year for Motricity, which is now laying off 250 workers and moving its headquarters out of North Carolina. He answered that his son came to him with the deal one night, and he basically said “Why not?” He now admits it probably wasn’t a good decision, but still expressed faith in the company’s technology.”


I would bet Icahn facilitates a private sale of Motricity by the end of the year rather than try and take anything public in the current lousy market. There is much potential value in Motricity's GoldPocket division as its former competitors, M-Qube and Q-Pass were acquired in private transactions for $250 million and $275 million respectively. The latest move to cut the headcount at Motricity paves the way to growth and profitability and there's no doubt on my mind that Icahn will make a profit on his investment in this company.

to tech "guru"

You who call yourself a tech guru, save your hype for the troops and the investors. More and more people AREN'T using their phones as personal computers. It's not growing. And to the extent they will in the future, they'll use iPhone-type devices that link directly to the web, rather than going through some clunky Rube Goldberg phone-quirk-specific system from the 90's. No middleman. Motricity's the middleman. And NOBODY has been 3 years behind China since something like 1500 when they were the only ones with paper and gunpowder. It is THEY who are about 40 years behind US. The reason they use phones for entertainment is because that's all they've got. As they become a first-world nation with first-world tastes, they're going to start watching TVs and movies and listening to CD players. Saying the developed world is going to start downloading as many ringtones as they is like saying the developed world is start going to ride as many bikes to work as they do. Ain't gonna happen. Yes, Icahn is a great value investor. So note the irony. To date, investors in Motricity have been venture guys, the ultimate growth investors. So his involvement is a statement in itself. And he doesn't have $100 million +, more like $50 million, and it's more like debt. And he doesn't care if he's acquired or goes public, he just wants to get paid. In fact, that's cheaper and easier if he gets acquired (fewer banker fees, less money left on the table, quicker). Has Icahn EVER taken a company public? More likely, he'll instruct Motorola to buy Motricity, thereby reaching into the pockets of Motorola shareholders to pay him back his $50 million. I don't know what current investors will get out of that, but you can bet they're in line BEHIND Mr. Icahn. Regarding your statement about switching CEOs, is there any public news on that yet? To the poster who thinks that the "Enronic" statement is "stupid", its similar at least in that Enron always booked future projected earnings as current earnings, since they didn't have much, and all Motricity ever talks about is future earnings (gonna be MILLIONS) without ever showing any current earnings. And, oh yeah, they're similar in that almost nothing they ever say turns out to ever have been true. And their new stuff doesn't work as well as they say it does…

Terminator:Taylor Brockman Chr

There goes Taylor's plans to use Fuel to build SkyNet. Maybe Otto never really left the company- mayb he just went back in time to stop SkyNet.

tech guru

Look around everybody. More and more people are using their cell phones as personal computers. Downloading ringers, games, movies and so forth. The only thing Motricity is guilty of is coming to the table a little earlier. It has been proven that USA is always 3 years behind China in technology and in China mobile downloads in the on deck and off deck is huge. As for Carl Icahn, he is one of the greatest value investors and with 100+ million in this company, you can bet he will not let anything happen to this company. He does not want to be acquired he wants to go public. Laying off people, switching ceo’s and coo’s shows that his company is trimming fat, and getting ready for a public offering.

Everyone is interested

To 'No one is interested' – This posting started off like any other. But unlike almost all other posts, it struck a nerve that resulted in a reaction I have not seen on this site in the several years I have been reading it.

Whatever is going on there at Motricity, I find it a fascinating, insightful, Enronic, soap opera that gives a glimpse behind what I thought was a cool little company. I wonder how many other companies out there have similar cultures or if this is an extreme exception.

Funny how in one breath you say no one is interested and in another you say you come to these forums to read the comments. Guess that makes you an oxymoron.

If you are so smart

Ok genius, then set the record straight if we are so wrong.

No one is interested....

in another useless article… we just come to these forums to read stupid comments from so-called experts, like the person above who has no clue to what he/she is yapping about.

I think I hear the fat lady wa

To "Milking this story"….no one is forcing you to read Tricia's articles. Apparently you are still interested in what she has to say or you wouldn't be reading this forum.

The Motricity/InfoSpace deal was really just a clever way to take InfoSpace private….and then fund it with cash from Motricity (what little is left).

No offense to the Motricity people (I know a lot of you guys) but Motricity was dead without the InfoSpace deal. The investors did not see a way to make Motricity profitable and their last ditch effort was to merge with InfoSpace. Profitability is still a long shot, but at least it is a shot.

stay strong, Tricia

Stay strong, Tricia. You're doing a great job. Keep it up. Keep reporting the truth. Most of us appreciate it, although few of us are used to it, and a dedicated few will do whatever they can to prevent it.

Milking this story...

Wow Tricia — you're really milking this Motricity layoff. Got anymore useless articles to post with the same crap?

Not with a 10ft pole

"InfoSpace is taking over"?

More like Motricity-West is is taking over. Infospace as it exists today has nothing to do with mCore or the mobile technologies. It's all Motricity's now. And based on what I've read about Wuerch's talents and his preach and charm… thank God.

what you get for $180M

It looks like Carl paid the ~$180 for the INSP mobile unit's technology, the customer contracts from both (11 of the 13 major carriers, as is so often repeated), and I suppose the ability to aggregate a lot of consumer data passing through the infrastructure. I guess they're hoping against hope that none of the carrier customers will walk away. They might keep them by giving away the service essentially in order to keep the access to the flow of consumer behavior data, which they can sell to advertisers and back to carriers. I don't think he needed a middleman, since he could have put together the same investor group to just buy INSP's mobile unit directly and put Elfman in charge, thereby avoiding taking on Motricity's ongoing losses.


So if Motricity (Durham) and it's Fuel platform is being mothballed, didn't Carl Icahn essentially just pay ~$180M to buy INSP mobile unit. It doesn't appear that Motricity is part of this equation at all other than acting a the middleman in the deal.


Moving to Wash might end up to be a good move in retrospect…anyone's planning to move with the company?

definition of "great job&

"Ryan, you did a great job raising money and doing acquisitions". Great job? Really? For whom? The people acquired, sure. What I've been doing is transferring my investors' moneys to people with other companies. Those are the only folks getting rich off me. I'm like Robin Hood. I paid $140 million for a company losing $10 million per year. Taking from the rich and giving to the poor. They should have paid ME $200 million to take on that problem. And my money raising, especially the latest round, will prove my undoing and the undoing of investors who trusted me. Mr. Icahn has us all by the scrota.

I agree with "confusing&q

When he says "Wuerch’s days are numbered."

THE best thing that could happen for the company and the investors is for Wuerch to be let go ( or for him to leave voluntarily), put someone else in charge that the employees will have some belief in. Seriously, anyone think that anyone in Bellvue is excited about working with him? Yeah, let's cure the cause of the cancer by moving it from one section of the body to another…. Ryan, you did a great job raising money and doing acquisitions, it is now time for you to move on.


How long is Wuerch going to last in Seatttle? Sorry, the southern charm bit isn't going to fly on the west coast, nor the inspirational speeches with the preacher's charisma? Are Nathan and Larry coming along too? They are all gonna need a new wardrobe….

Hopefully Lord Elf will turn this around, either sell the company or do the IPO? What's an option worth these days?


"Wuerch will move to the Seattle-area to work alongside Steve Elfman". When did CEOs work "alongside" COOs? I think this statement, and the fact that few of Wuerch's Durham reports are moving, shows the truth behind all the lies and smoke. Wuerch's days are numbered.

"The company shelved IPO plans". Really? When were the plans the shelf? I think "not profitable" is a severe understatement. More like "hemorraging cash". Infospace's 10-Qs filed with the SEC showed them losing an average of 12% of revenue over the past 10 quarters, and an average of 14% for the past 2. At an annual revenue of $50m, that's a rate of losing $7m per year. Without revenue growth or improving profitability. And Motricity PAID Infospace some ungodly sum for the ability to lose that much, so who knows how much they've been losing if that looks good to them. Laying off these 250 people, at $100 thousand each, should save them $25 million ($23 if they buy Mr. Wuerch a new house), and if they can show those savings before losing customers or hiring more in Washington to replace them, I guess they'll be able to pull of a sale or IPO. The question is whether they can keep customers around and revenues up with fewer people and only the mCore platform.

100 Motricity Employees on the

Take one down, pass the resume around, 99 Motricity employees on the wall.

The "Last 100" are being offered insultingly small retention bonuses and no guarantees on employment dates to stick around and work 24×7 to keep things running for Lord Elfman while taking over the functions of coworkers who are either laid off or move on to better jobs. Just how many of those people do they think will be around after 9 months? Or even 3?

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