Mobile-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.