October 15th, 2007 by Arjan Olsder Posted in Companies & M&A | No Comments »
Infospace mobile is known for it’s rise in the market and at the same time for it’s fall. In just over a year, a once huge mobile publisher more or less broke apart. Now, Motricity acquired the remainder.
Infospace started off by acquiring several mobile content developers. The acquisitions started with Moviso, a ringtone specialist. Soon after, Infospace started their rise in the mobile gaming market by acquiring Iomo, Arlas Studios and finally Elkware. At the end of 2007, the Elkware studios where suddenly closed. Before 3GSM, Twistbox bought the properties of the Astlas division (mobilegamesblog.com was the first to report this) and now, Motricity bought what is left of Infospace mobile though it already seemed that Iomo was trying to get it’s old brand back in the market (i.e. Sponsoring Monty’s mailinglist under the Iomo brand instead of Infospace Inc).
“This transaction is another opportunity to unlock value for our shareholders,” said Jim Voelker, Chairman and CEO of InfoSpace. “Like the previously announced sale of our online directory business for $225 million in cash, this transaction is extremely tax efficient, allowing us to capitalize on our net operating losses to significantly maximize the cash proceeds from the sale. With these transactions, InfoSpace will be solely focused on online search. We will maintain a strong financial position and a solid distribution network with over 100 private label partners as well as our award winning branded websites such as Dogpile.com. Based on results for the first half of the year, our search business represents over 60% of InfoSpace’s revenue. Our search business is highly scalable and continues to generate strong cash flow.”
Motricity paid for the acquisition in cash, in total about $ 135 million. After the acquisition, Infospace will solely focus on their search engine business. For Motricity the deal brings a great amount of knowledge and distribution power which will even make them the primary content publisher in North America. Ryan Wuerch will remain CEO of Motricity after the deal, but Steve Elfman, coming from Infospace Mobile, will join Motricity as the new COO.
With the sale of the mobile division, the company expects to return a "significant" amount of net proceeds to shareholders as a special cash distribution. The deal is expected to close within the next 90 days. Motricity is still a privately owned company.
