Update: Motricity Restructures: Closes Asia Ops, Will Focus On Mobile Ads


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More woe for beleagured mobile services company Motricity: the company today announced that it is restructuring operations, pulling back from investments in Asia and focusing on growth in North America in areas like mobile advertising and enterprise services.

The news comes after a series of other developments that point to the challenging market conditions for Motricity, which it is weathering amid a lot of shareholder allegations around insider trading and other fiduciary violations. Some of these shareholders are now taking legal actions against the company.

Four months ago, the company’s founder and CEO, Ryan Wuerch, left the company and got replaced by president and COO Jim Smith as interim CEO. In September 2011, Motricity secured a $20 million loan from High River LP, a firm controlled by Carl Icahn, and at the time said that it was exploring strategic alternatives for the business, including a possible sale.

In its statement today, Motricity said that it planned to put more investment into developing its mobile advertising and enterprise businesses as it turned away from other parts of the business that were “no longer strategic or profitable.” It did not provide any detail of how big its Asian operations actually are. Its last quarterly earnings statement, Q3 2011 from November 2011, did not mention the region at all, and international carrier revenues were worth $3.6 million, compared to $19.6 million from North American carriers — although these could also include operations outside of Asia, such as the UK. Q3 2011 revenues, Motricity noted, fell below the company’s own guidance amid lower-than-expected international sales.

Motricity has a large base of customers, ranging from mobile operators such as AT&T (NYSE: T), Verizon and Vodafone (NYSE: VOD), as well as top brands like Kraft, American Express and Coca Cola, and offers a host of mobile data solutions, ranging from messaging services through to mobile marketing and advertising.

Advertising in Q3 accounted for about $7 million in revenues, it said.

We have reached out to Motricity to ask how today’s news impacts employee headcount, and whether the company had any more news regarding the hiring of a permanent replacement for Wuerch. We will update this post as we learn more.

Update: A spokesperson for Motricity, via email, told paidContent that the company has made “substantial reductions to headcount” already. But as some of those people affected are still at the company, they are still included in the current headcount, which is between 320 and 350 full-time employees. “We expect that, as a result of the recently announced reductions and our continued review of our costs structure, that number may be lower by the end of Q1.”

As for a permanent CEO, the board has called in executive recruitment firm Korn/Ferry, and it is expected that a decision will be made in the next several months.

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