Interview: Ryan Wuerch, CEO, Motricity: IPO Still An Opportunity; ‘M&A Will Be A Part Of Our Core’


image Motricity, the mobile infrastructure company that acquired InfoSpace (NSDQ: INSP) Mobile for $135 million in October, has been relatively quiet following a burst of publicity over its controversial headquarters move, opting to focus on the structural changes, wooing new customers and working on contract renewals. Longer term, though, CEO Ryan Wuerch plans to acquire more companies, raise even more capital and expand outside of its carrier customer base to work directly with media companies and handset manufactures. With such lofty goals, the company has a ton to execute on. For background, Motricity bought InfoSpace Mobile to beef up its carrier storefront and portal services, which manage and organize the millions of pieces of mobile content that end-users consume on a daily basis. To do so, the company raised nearly $200 million, which doubled the amount it had raised to date, and added high-profile Carl Icahn to the board among others. Following the transaction, Wuerch tipped the company on its head, by moving the headquarters from Durham, N.C. to Bellevue, Wash., laying off hundreds of its East Coast employees and choosing InfoSpace’s technology as the platform it will use going forward. After the jump, some lengthy excerpts from a 90-minute interview with Wuerch and Brendan Benzing, Motricity’s SVP of product strategy and marketing.

Disclosure: Motricity was a sponsor of our recent Seattle event




I meant that Motricity's chief product was marketing and selling the image of Motricity. Image over substance. They got investors and awards because they sounded good rather than being good.

The award winning Fuel platform was a smoking pile. Half of its magic wasn't from the code doing anything spectacular, it was from forking the codebase to suit every little whim a customer wanted. But that markets well. Fuel can do everything because the project managers couldn't say no to anything. It's so hot when you don't say no. People throw money at that. OK, I'll not be ALL negative on Fuel. They were smart enough to write it in Java rather than .NET, so the operations weren't bogged down by incessant reboots.

To answer your question, JH, they could do that tickytack stuff. The GoldPocket acquisition got them the modern equivalent of the 1-900 lines and the contracts they had with networks, the 'text here to vote for whatever' junk. TXT suffers the same problem as WAP: you don't control your own destiny as a company because the carriers own that transmission medium.

MasterCard/Visa get by by taking a 2% taste of nearly every transaction in the modern economy. Small percentage, huge pie. Apple takes 70% of a small pie: iPhone app installers. Idiots who need ringtones is probably a slightly bigger pie than iPhone app users, but, if you can't negotiate yourself out of single digit percentages, and you can't cut the carriers out because you need them (well, their FCC licensing really) to be at all meaningful, how are you anything but a tiny little Icahn-fed fishie waiting to be eaten?


When you say "marketing,marketing,marketing" are you referring to the possibility of Mo using its gateway and access to millions of cellphone users as a marketing tool-as in mini cellphone surveys, promotions, and stuff like that? I could see that as a potentially huge revenue generator for them which they could share with the phone carriers. What do you think?
Also, do you think the "WAP stranglehold" as you put it can be busted? TIA


"It seemed as if all of Mo’s D2C properties were these legacy properties."

Correct. Nobody knew what to do with them. ebooks and palm apps don't sell enough to make the Big Buxx that a 450-person-company needs.

I mean, when you run a site like ereader on 6 servers, c'mon. How much can it be worth? It may be all profit, but it's not a big revstream.

"What was the deal, after all, with this highly vaunted and award winning “Fuel” platform? […] If it just wasn’t that good, why did it win so many awards?"

What was the deal with Motricity? If it wasn't that good, why did people keep sinking good money into it?

Marketing. Marketing. Marketing.


Yes, the award winning Fuel platform is being completely phased out in favor of the completely inferior, yet much less expensive Infospace platform. As for the AT&T;contract, I suspect it will be a while before AT&T;makes an official announcement. Motricity will certainly not be announcing anything. Infer from that what you will.

Benzing in the wings

Like somebody else posted it seems to me like they did this dual interview because somebody with sufficient control doesn't trust Wuerch in public without an adult to chaperone him, in this case Benzing, and the sufficient controller is probably Icahn. Is it really possible that Wuerch will walk away from this with money? Let's assume $100 million net revenue and $1 million cash flow. That's generous if you look at the cash sink Infospace mobile was before Motricity bought it. Let's not even think about a loss of the AT&T;contract. So with such thin margins in this market, there's no way they could fetch a decent return for Icahn, much less the other VCs, much less employee shareholders, be they preferred or not. I HAVE to imagine the early VCs and the Icahn-round VCs got in line first. Probably more likely Wuerch will be summarily fired if the AT&T;contract IS lost, and then Motricity will be one of "the living dead" for 5 more years, then will either just fade away or be absorbed into one of the carriers in exchange for assuming the debt.


I agree with semicon on a couple points:
1. The iPhone is still just a sliver of the market although that sliver is going to garner Apple a sh*tload of revenue. They have clearly redefined the market in terms of the device and applications – but there is clearly room for others. ExMoWageSlave has succinctly spelled out the challenges for the likes of Motricity.

2. Icahn will sell Motricity at the first opportunity. To paraphrase Wuerch "that is in his DNA", and I am pretty sure his DNA trumps Motricity's DNA. Icahn clearly sees this investment as his son's blunder and with bigger fish to fry he'll be happy to rid himself of Motricity sooner rather than later.

3. Wuerch's days may be numbered but it really won't matter that much. If the likely scenario occurs and Motricity is sold off, guess who is first to the cash trough? You guessed it, Mr. Wuerch and the other preferred shareholders. His ponzi scheme will come to a fruitful conclusion.

As for his quote "And every employee we had has options that are exercised, and is a shareholder. So for me, even if I’m making the right decisions for the shareholders – that means even the employees" Well, no Mr. Wuerch, it doesn't mean "the employees" at all and you know that. Anyone who has seen the funding documents knows that the employees are last in line should a sale occur – the VCs and preferred shareholders get paid first. With $400M+ invested it would take a monumental liquid event before the common shareholders saw any return from this over-leveraged scheme.

As for an IPO, Goldman and Morgan both walked away. Seems the shiny exterior of the company is pretty ugly when you dig into the numbers.

Finally – his quote "…Almost everyone who was reporting to me has gone on to better jobs, higher positions and for better pay…"

Only the mind of a self-absorbed, egomaniacal, ass-clown would suggest that the closure of the Durham office and the 350 person layoff was a positive thing for the employees and take credit for it.

But I thought...

I thought Wuerch's PowerByHand collection of web properties were all D2C companies hawking stuff for palm pilots and early cell phones. It seemed as if all of Mo's D2C properties were these legacy properties. Did he drop them from his radar after the takeover of PenPoint (or merger, whatever) even though they had allowed him to push that through in an attempt to become the Google of phones (laughable)? Or were they not, in fact, D2C's?

What was the deal, after all, with this highly vaunted and award winning "Fuel" platform? Was it completely dropped for the Bellevue technology? If so, was it just never that good or was it unable to evolve with the rest of the space's technology? If it just wasn't that good, why did it win so many awards?


Yeah but let's remember a key point here; what was the 1 division that could never get any attention in Wuerch Land? DTC!!!
Since it had no slick, sleezy sales guys on it nor any puff-tastic talking points associated with it, Ryan never paid it any mind and let good people come and go from its wake. There were efforts but to no avail….


"Why can’t Motricity create an “app store” for non-I-phones?"

In one sense they do; in another sense, it's impossible.

So, the iPhone App Store is Apple servers pushing content (and they charge you for the transaction) through AT&T;to one of 2 devices: iPhone 3g and iTunes. They keep 30% of the money and pay AT&T;a few pennies for shoving the content over the air.

Motricity's storefront is, their servers pushing content (and they outsource the transaction) through AT&T;to one of THOUSANDS of platforms. AT&T;gets the money, and pushes a few pennies to Motricity for the effort.

Apple negotiates better, for one. For another, they have the ultimate workaround: the Internet. If you buy from the app store, you can sync through iTunes and don't HAVE to have AT&T;. But if you want a ringtone for a non-iPhone, you have to get a WAP push from AT&T;. That's not the real Internet, it's WAP. The carrier has Mo by the short-n-curlies at that point.

So, build whatever you want, your biz model is totally dependent on the kindnesses of the oligopoly of carriers until you can bust the WAP stranglehold.

Ryan "Flanders" Weurch may think the iPhone is a 10-million-user niche player, but that's missing the larger impact of it opening the market wide. D2C was the high profit percentage center in Mo from 2006-2007. Ignore that at your own peril.


What are you smoking buddy? The Iphone is good but it won't dominate the market like you think it will. In fact, RIMM is putting out their "iphone killer" within a few months. There's room in the market for motricity but I doubt they will be the one's doing the acquiring since I believe Icahn will have this company sold off at the first opportunity. I can think of many companies who could effectively capitalize on motricity's position in the mobile space. Weurch's days are numbered.


Funny statement, "M&A;will be part of our core". Sounds like a sentence from a random sentence generator seeded with faux management speak. Sounds like they want to keep buying new businesses, telling a new story, and leaving disappointed investors and employees (I guess "employee/investors") behind in all the new companies. Good strategy for a management career until someone catches on. A company's "core" is what it's supposed to be good at DOING, generating value for other people, not buying other random companies good at doing things themselves. Makes you wonder where they expect the money for this new "core" activity to come from.

Why Benzing?

Why was Benzing, and SVP, involved in this interview, which reads as if it were set up to cover topics of CEO-level strategy and "vision"? Is Benzing being positioned to take over one day? Has Icahn tasked him with holding management's hand? I wonder if Icahn, with his recent blog protests against golden handshakes and parachutes, will ever agree to pay a bunch of money to make certain problems just go away, or if he'll cut them off at the knees. Could be the money's just too small for him to worry about, so he'll go ahead and cut checks, OR the money's too small for him to worry about, so he'll make examples. What's Brett's involvement in this thing these days?

can you say "delusional&q

Has anyone noticed that Mr. Wuerch's house in Raleigh is still for sale? Has anyone noticed that he's asking $2.5 million in a neighborhood where $1 million is near the top end? Has anyone noticed that Zillow's comps have it at around $1.2 million (Zillow is often inaccurate and imprecise but it's seldom off by a factor of 2)? Does anyone really think he can get this asking price? Are delusional claims and requests (remember when they'd "selected" Goldman AND Morgan to do the IPO a couple years ago?) part of his business and life strategies? Are Motricity's many disappointed shareholders holding the bag on this McMansion with the "low-interest mortgage" they gave him? I wonder what sort of splendiforous digs they've bought for him in Washington. That quarter billion dollars he raised has to be spent on SOMETHING after all.


"…but said that Motricity has long-term contracts with its customers, and in particular, provides a lot of services to AT&T;…"

That's certainly not a very strong statement. If, in fact, this speculation is true, then it's game over.

long tail

The half-life of this whole scam and it's ringleader are a testament to human foolishness. I suspect the mentioning of an IPO is just to keep board members happy at least one more day to eke a living out of the scam one more day.

Even if this were a serious attempt at starting a company, there doesn't seem to be enough recognition of the threat of the iPhone. Management seems to imply that it'll cede to Apple the top end of the market while Motricity takes the mass market. But as Apple moves the iPhone price point down and improves its capabilities, IT will take the mass market. After all, its taken, or DEFINED, the mass market with iTunes, and has steadily moved deeper into that market with new iPods. Do these jokers think they can really compete with Apple in marketing?

I wonder if Icahn gives them permission to use his name in vain so often. I wouldn't think he would want to be so closely associated with this mess. What does this line from the interview mean?: "…and he’s not just extracting shareholder value by doing this." Isn't that what he's SUPPOSED to be doing? Isn't that what they're ALL supposed to be doing? Isn't that what all those highly valued ex-employees with exercised options want everybody to be doing? Isn't it bad press for Icahn to say he's not? Almost libel?

What about this line?: “It typically takes cash to acquire, whatever form that is. You can pay for things in stock or cash.” Immediately un-saying what he just said. I don't think he knows what any these words mean. Cash has one form: cash. That's why they call it "cash". It's not the same as stock. Accepting stock implies faith in the future of the issuer. Accepting only cash for an acquisition implies no faith in the future of the acquiror. I think he's just confused because none of his acquirees accept Motricity stock, since they know it's worthless.

Tricia Duryee

Hi Everyone, I did call the company to see if they indeed lost AT&T;as a customer as one of the comments suggests. A spokeswoman didn't comment directly on the manner, but said that Motricity has long-term contracts with its customers, and in particular, provides a lot of services to AT&T;. If anyone knows anything else, feel free to drop me a line at Tricia AT


Come on! If you've ever heard the man talk then you already know the answer to that…his "televangelist style" will make you believe the earth is flat and you will "become the Google of mobile." (How many of us heard THAT speech?)

He has gotten away with it for this long for 1 key reason…the board let him.
He fired anyone else who dared ask questions…someone earlier mentioned dead bodies…how about count how many folks he fired for asking smart questions.
Until someone calls him on the carpet about past actions, he will continue.
Count on it.


Can someone confirm that ATT is gone? If so how do you sugar coat that? I just do not understand how one man and his band of merry men can pillage and plunder for so long and never suffer any consequences.


So did they lose the AT&T;contract before or after this interview? If it was before, Wuerch has lost any silver of credibility he had left and Icahn should give this fool the boot which would be ultimate karma!

FarmHand Luke

Wow – AT&T;finally flew the coup? I guess the jewel has fallen from the emperor's crown…now he really has no clothes!


They lost the AT&T;contract??? Isn't that the bulk of their revenue???

MO losses

Hey JH….you and Ryan forgot to mention that they have not yet announced that they lost the AT&T;contract. How's that whiner?


Why can't Motricity create an "app store" for non-I-phones? They are surely in a position to do just that. They should leverage their unique position in the mobile space. If an IPO is not in the works, Motricity could easily be acquired by companies like QCOM or MOT(which Icahn is also a large shareholder of btw) or even a YHOO. If they are announcing "new wins" soon, things can't be too bad for their business, huh whiners?


Ahh…yet another smorgasboard of smathering symantics from a guy who can deliver the snake oil better than P.T. Barnum.

Wonder if he still gets the lunches under the domed lid each day?

I guess he figures the faster and more he talks the less anyone will notice the stench of dead bodies and pure horse manure he has left in his wake.
(Kind of like the car salesman who turns the radio up louder during your test drive hoping you won't notice that he farted….)

Second Class

Hmph. Can't imagine why Durham employees feel disenfranchised. But Wuerch is right, there are announcements coming…and they're not good. At least he's Bellevue's problem now!

Semper Septembus

@ Augustus

That is because, in reality, Benzing is a legitimate executive whose background has some relevancy to the space (AOL, Bell Atlantic). Weurch? Well his prior background is in multilevel marketing businesses (ponzie schemes?) where he honed his "storytelling" skills (which are unparalleled btw).

Don't get me wrong, his act has raised $400M+ and he himself acknowleges that "Motricity was very strong on the marketing and the sales and forward leaning version (vision?) and being very loud about it". One could read that as a company that could sell a good story but not deliver on it.

Historically you will also see that his executive teams almost always have a short tenure. I don't expect Benzing to be any different. Time will tell.

As for an IPO, not now or soon.

Semper Augustus

Benzing seems to really understand the marketplace and where this company fits in. Wuerch talks A LOT but never says anything of importance, typical "Corporate Weenie". He's outclassed by Benzing and all the other "Real Executives" that have the misfortune of reporting to him.

Motricity's outlook still looks bleak as their business model will be hard to sustain in a weakening economy. Even if they make all the right moves, an IPO is unlikely to succeed.

MOT Board

It actually is Carl on the Board. After he publically admitted to an investment conference that his investment in Motricity "was not the right decision" and that his son "talked me into it" (, he removed Brett from the Board and put himself and Hunter Gary on the Board.

Mark May

I think it's Carl Ichan's son Brett, not Carl himself, that is on Motricity's board

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