Motricity restructures, returns to its carrier focus

Today the rumors are official. Motricity, which acquired Infospace Mobile for $135 million last October, is restructuring its business, laying off 250 people and moving its headquarters from Durham, N.C. to Seattle.

President and COO Steve Elfman talked to me yesterday about the restructuring, saying that the company is getting back to its roots and focusing more on embedding the firm's private-label technology platform with carriers. Specifically, it will focus on powering portals, storefronts, managed web and search for the carriers. In addition, Motricity will consolidate its product line by migrating customers on the Fuel platform to the mCore platform while integrating some aspects of Fuel into mCore.

When Motricity acquired Infospace last October, it also acquired relationships with several operators. The merged firm boasted customer deals with 11 of the top 13 operators. Those relationships will stay but will be more consultative than in the past. "What we are doing with carriers will become more consultative and drive usage," Elfman said. "We are going to spend time on innovation that we think has the opportunity to pay back."

Besides streamlining its work force and eliminating redundant positions that developed because of its acquisition of Infospace, Motricity is getting rid of a lot of businesses that it touted as recently as last October. When I spoke with CEO Ryan Wuerch [1] after the InfoSpace acquisition, he spoke about the need to develop end-to-end solutions for customers and the benefit of having "scale" to thrive in this business. Before it purchased Infospace Mobile, the company had acquired a few other key firms such as M7 Networks [2] and GoldPocket Wireless [3].

But that "scale" mentality seems to have vanished. In its place is a more realistic view of the mobile content marketplace and an acknowledgment that you can't be all things to all people. With that in mind, the company is getting out of the direct-to-consumer business by divesting Pocketgear.com [4] and rationalizing other areas such as its storefront business that worked on with such major brands as MTV and BET. "It's not hugely profitable," Elfman said. "We are interested in the media and entertainment vertical but we are getting out of storefronts."

While layoffs and restructurings are never easy, particularly for the impacted employees, I think it's time for mobile content firms to take a realistic look at the market and understand what's working and what isn't. It's time to stop investing in things that aren't working (direct to consumer) and focus on the basics. -Sue [5]