Blog Post

Updated: Motricity Also Received Investment From Velocity; Miller Joins Board

Velocity Interactive Group, the investment group led by Jon Miller (ex-AOL (NYSE: TWX) CEO) and Ross Levinsohn (ex-Fox Interactive Head) has become an investor in Motricity…this was part of the big December round of $185 million. The investment was discreetly mentioned in a press release today that was focused on Miller joining Motricity’s board. No other details were released, so there’s no word on how much Velocity invested. A Motricity spokesman didn’t immediately return phone calls requesting comment.

In the Velocity release, Miller is credited with turning around AOL by restructuring its core business lines and helping the company deliver record annual profit growth of 21 percent. Motricity itself is in the middle of a restructuring. Following the purchase of InfoSpace, it announced last week, that it would meld the two company’s products together, leaning heavily on the InfoSpace mCore platform, lay off 250 people at its headquarters at Durham, N.C. and relocate to Bellevue to be with InfoSpace (NSDQ: INSP). The investment also follows comments by Icahn this week that questioned whether he should have made the investment, although he reaffirmed his faith in the technology.

Motricity’s CEO Ryan Wuerch, said in the release:

13 Responses to “Updated: Motricity Also Received Investment From Velocity; Miller Joins Board”

  1. Despotic feudalism on top of l

    Great post! Real interesting. The other really interesting thing about the domain registration is that the SENIOR vice-president of corporate development (acquisitions?) and HR (strange combination) is listed as the ADMINISTRATIVE contact for the site! Sort of a senior role to be told "Hey, go and register a website for my wife. And have the company pay for it." I guess she, and all other interested parties, are too stupid and/or too poor. And does she, or do the Wuerch's together, garner any income or revenue off these sites? Maybe they were going to try to monetize the 10-year old Miss America crown for investors? Maybe motivational speaking or PR consulting fees are the only business segment they ever hope to have with any hope of garnering more revenue than it costs to run…

    Actually, this is sort of interesting, maybe risky for Ms. Wuerch. Do the owners of Motricity have rights to her name now, through this website thing? If so, then after Wuerch is unceremoniously, maybe ceremoniously, bounced out, they may have lost one method of making ends meet…

    This whole thing reminds me of a bunch of kids playing "company".

  2. LieDetector

    This interview is of course filled with outright lies and half-truths. It's a small thing but why is Shawntel's personal website owned, hosted, and paid for by Motricity?

    What relevance does her site have to the business and can't the Wuerch's pony up the spare change to maintain the site? Just another example of them pilfering from the company til?

  3. cross reference

    See the story about Icahn's latest letter to Motorola shareholders to wage his proxy battle to replace the board, especially his indictment of current management and board (treating their collective sinecure as a fraternity/country club) but also his sensitivity to losing money on his investments. Note the eery similarities with the accusations leveled at Motricity management on this board and others. Gives a good indication of what's going on behind the scenes in Motricity, except there, Icahn is such a large shareholder he doesn't NEED to write plaintive letters. He can kick rear personally and directly. We'll see major changes at Motricity soon. Bellevue appears to be steadily and progressively deciding that it doesn't need anything from Durham, so far filtering out technology and employees. Why would it decide it needed any of the senior leadership that developed the technology it doesn't need and hired the employees it doesn't need?

  4. bemused

    Such a big deal is made over this Wuerch character's religiosity, not the least of which is done apparently by him, but I'm bemused that someone so professedly Christian would be spending so much money (of whomever's) on himself rather than on the poor (i.e., "…the least of those his brothers…", to paraphrase another religious figure). Maybe he thinks nice hair and public professions of faith are sufficient example to others, to those of us in the great unwashed. It's that sort of inconsistent philosophy and actions inconsistent with statements which should make potential customers shudder and lose sleep. (If he can't connect the simple dots that have already been connected for us by those getting direct information from The Boss, how can he be expected to connect the undefined, shifting dots of new technologies and business models? With helmet hair and big houses? I guess that's OK if it's proven to work in the past…)

    Also, why would I, as a potential customer who needs to make sure I deliver content to my customers, care about the "big face" the company can put on by renting private jets for golfing boondoggles and eating off of bone china in their offices. Just make sure your service is going to work. That's a big enough face for us.

  5. iPhone Rocks

    I agree. Especially since Apple just opened up development and more than 100K developers have already downloaded? Why do consumers need a middle man? They need a good solid website that makes it easy to click/download/install directly to the device. I would think a secondary direct-to-consumer approach, retooled to be mobile device friendly, would be money in their back pocket, at least. All those iPhone developers are certainly going to be looking for a place to sell their apps…pocketgear anyone? It's up for sell. :)

  6. I want an iPhone

    Where does Motricity expect demand for their infrastructure to come from when iPhones and their imitators will be able to go straight to the internet, straight to mobile content providers, so teeny-boppers can just click the radio button for a ringtone rather than texting some obscure code to some obscure number?

  7. Midwest Investor

    As a business owner and Motricity investor (for over 2 years), the fact that Ryan would use Motricity staff for his own personal benefit begins to bother me at the point that he began to take outside investor’s money. At that point it becomes his primary duty to increase shareholder value. Having IT staff fix his home PC does not accomplish that goal. Neither does only riding in limousines.

    Tomorrow morning I will be joining a Motricity investor conference call with Ryan and Jud, the CFO, and currently have a long list of questions and concerns I plan to bring up on the call. It seems that you are saying that increasing shareholder value has not been the top priority. If my assessment is correct, I would really like to hear some more info from you guys who seem to be in the know.

    Feel free to email me at [email protected]

  8. quality of revenue?

    How much of that $100 million revenue is honest-to-goodness revenue, from which you can grow profit through cost-cutting, and how much is simple pass-through revenue, where some percentage goes right off the top to third parties, such as content providers? And how much is book-keeping revenue, where they're just holding the money for someone else?

  9. Attn: Motricity refugees, I have helped 10+ QA+engineers get interviews at other RTP area companies. Please do not get soured on the area or startups due to this one bad experience.

    Email me your resume for help finding great opportunities – [email protected]

    RTP VC

  10. Follow The Money

    “What’s fascinating about Motricity is that $1 billion of carrier-related revenue currently goes through it, which generates over $100 million [in revenue] for them."

    What's fascinating is the burn rate they (attempted to) sustain to get that.
    What's also fascinating is how they tout that 10% revenue stream without factoring in that they're ditching high margin non-carrier BU's in favor of being the carriers' red-headed stepchild. People would love to know how well they renegotiated the ATT contract last time. One would liken it to ankle-grabbing.

  11. MissAmerica

    Totally agree with you. I was before downtown durham but there'd be a hissy fit if employees used the real plates which were supposed to be there for employees to use.

    Ryan professed his faith repeatedly in meetings, and christian culture was a given at Motricity once the powerbyhand peeps came on board.

    I also saw some blatant discrimination with hiring (not hire gays/lesbians/transexuals because they didn't "fit" in with motricity culture) and blatant disregard for serious infractions by employees that should have resulted in them getting fired but instead they stayed on.

  12. I would be questioning my investment…

    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. I don’t know who this PR person is, but they obviously have no clue, or are actively trying to hide the truth.