Updated: Local Matters and mobilePeople Cancel Merger, Citing Markets; mobilePeople Takes $8 Million

This is a new one… Local Matters and mobilePeople, two mobile firms that said they would merge back in April, have canceled their deal, and they’re blaming market turmoil. Denver-based Local Matters, a provider of mobile search was technically going to acquire Denmark-based mobilePeople, a developer of mobile search and advertising, for an undisclosed combination of cash and stock. Since 2006, the two had already had a business relationship, and now the plan is to retain that partnership. It’s not clear how exactly the market turmoil toppled the deal — and this could be the start of “market turmoil” being the new homework-eating dog.

Meanwhile, things aren’t so bad that you can’t get funding: With the deal falling through, mobilePeople says it’s raised $8 million from Via Ventures to continue as a standalone operation. Release.

Update: See the comments for a note from Local Matters CEO Perry Evans. He notes that the merger was contingent on their being able to do an IPO — in this market, that’s obviously unrealistic, as the press release states.

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