Once worth $31B, Infospace mobile service sold for $135M

October 16, 2007 | Matt Marshall | Comments | |

infospace.jpgMobile-content distribution company Motricity has agreed to buy mobile unit of publicly traded InfoSpace for a mere $135 million, an anticlimactic end to one the most bubbly stories ever. InfoSpace was once valued at $31 billion for its mobile web technology.

That was at top of the market during 2000, and InfoSpace has since struggled to reorient itself. InfoSpace said it is selling the money-losing mobile services unit so that it can focus further on its online search services.

Motricity, of Durham, N.C., is backed by more than $220 million in funding, including $50 million from activist investor Carl Icahn earlier this year. The company is in the process of raising another $185 million from Icahn and others, according to the Red Herring. Previous investors in the three-year-old company include Cyrus Capital Partners, Technology Crossover Ventures, New Enterprise Associates, Massey Burch Capital Corp., Noro-Moseley Partners, Intel Capital, Advanced Equities and the Wakefield Group. All of these are rumored to be partaking in the pending round.

Infospace’s unit gives Motricity customers among 11 of the 13 mobile-phone carriers in North America, including AT&T, T-Mobile and Verizon Wireless.

Motricity earlier acquired mobile marketing company GoldPocket Wireless. Motricity also cut 50 jobs last year.

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Matt Marshall is editor and CEO of VentureBeat. Follow him on Twitter at @mmarshall, and follow VentureBeat on Twitter at @venturebeat.

  • anon
    Motricity looks like a sham to me. It has raised an ungodly amount of money already despite being unable to generate organic growth. Icahn may be a super-star financier but is really that useful of an investor beyond providing cash at terms favorable to him?
  • InfoSpace the company was once worth $31b, NOT it's mobile unit. The company was divided into 3 distinct units for which the web group generated the majority of revenue. The mobile unit was an important division, but only one division and not the whole.