On the Hot Seat with Motricity CEO Ryan Wuerch

Just two days after announcing its $135 million acquisition of InfoSpace Inc.'s mobile business unit, Motricity CEO Ryan Wuerch talked with FierceMobileContent editor-in-chief Sue Marek about the deal, his vision for the mobile entertainment industry and how this powerhouse company is going to keep its competitive edge.

FierceMobileContent: Why did you decide to acquire InfoSpace's mobile business?

Wuerch: InfoSpace Mobile Services, I believe, has created some of the leading technology for the deliver of mobile content and data in the industry. This transaction, for me, has been two years in the making. Approximately two years ago I believed that the strongest other company in the industry doing much of what we do was InfoSpace Mobile Services. Looking at the breadth and depth of their management team as well as the products that they have been developing, combined with our management team and executives and our employees and the technology and products we develop, there is not another combination that creates more end-to-end solutions for our customers.

This transaction, when it closes, gives us 11 of the top 13 carriers. We will be powering five of the top six carriers' portals. For four of the top six carriers we power the storefront, and for four of the top six carriers we also power the search. That breadth and that coverage enable us to do the most important thing, and that is to deliver a great rich experience to the end user.

It's all about understanding the end user better than anyone else. We are not a brand. We are the brand behind the brand. The better we can understand that end user's behavior, the better we can deliver to them on that small screen, exactly what they want. With the terabytes of data that is flowing through our data centers, 10-plus billion user impressions, hundreds of millions of search inquiries--there is no other company in aggregate that has that information from a mobile data perspective. Now we have to harness that on behalf of our customers--such as AT&T, Verizon, T-Mobile, etc., and the media companies and deliver a rich vibrant experience.

FierceMobileContent: It sounds as if you have a lot of customer information at your disposal. Do you see that as something that you are going to be able to market or use in some way?

Wuerch: Yes we do. But we will use that data on behalf of our customers. Let's use advertising as an example. We handle ringtones, games and graphics for AT&T. We have 15,000 developers and over 5 million digital media products integrated into our platform. We believe it's through segmentation and demographic analysis that we as a company understand that user, and understand what they are looking for and deliver it for them. Advertisers are looking for the same thing. I believe our customers, AT&T, Verizon and others will be able to monetize advertising better than anyone else. It's very different from the web experience today. AT&T and others have an opportunity because they have spent a lot of money to not only acquire the customers but more importantly develop loyalty with those customers. We view advertising as being no different than a content type--whether it is a ringtone or a video clip. We are offering it to that end user but in a way that is targeted and all about them.

FierceMobileContent: Before this acquisition, I always viewed InfoSpace as your biggest competitor. Who is your biggest competitor now?

Wuerch: We are focused every day on convergence. Where we are today is going to be very different from where we are tomorrow. Convergence is a big subject inside of our company. What is happening with broadband? What is happening with the TV? What is happening with the cell phone? As we see all of these converging we are spending our time and attention there. In the past we looked at competition in almost a myopic way. But that is changing. When we are talking about where the market is going--with advertising and search and different types of media that will be harnessed--you have to think about companies from a competitive standpoint like Ericsson, IBM and Hewlett-Packard. I'd be naive to not mention Google. Those are all companies that I believe we will see in a competitive environment in the future.

That's one reason for this transaction. Scale matters. We have created scale. Once this acquisition closes, I believe we will have the strongest employee base, management team and understanding of mobile data and mobile content in the business.

FierceMobileContent: You said that this acquisition helps you create an end-to-end solution. That is something I've heard talked about by the big infrastructure companies such as Ericsson. Do you think this quest for an end-to-end solution is driving consolidation in the industry?

Wuerch: This industry is very complex and a very expensive industry to be in. This is very different from the web environment, which is very static. The industry we are in today has billions of users and thousands of handsets. Multiply that times the millions of pieces of digital media. And every day there is new content added and new technologies created. All this adds complexity.

Consolidation has occurred because it takes a lot of capital to make even a single point solution. That's why you see companies like Motricity, Ericsson and others acquiring key companies. The better we can be at taking technologies and creating a single point of reliability and cover a vast amount of area for our customers, the faster they can run. It is our job to help them run as fast as they can.

FierceMobileContent: Do you think there is a slowdown in the mobile content industry right now? I'm hearing that the early adopters have adopted and the industry is having difficulty moving beyond that.

Wuerch: I hear some of the same things but we have a different perspective. We are seeing a macro view of all content types of the entire industry. Our monthly gross revenues is increasing month over month. You may have a content type that is flat-lining or decreasing because you are seeing people moving to different content types. But we are seeing growth in the industry. That's an important distinction. We see it actually increasing.

We are still only seeing up to 25 percent adoption of content and data. Most people don't know how to text or download content. We are still dealing with a lot of people who aren't consuming data today. We still have a broad opportunity.

I believe the iPhone was a defining moment in the industry because it showed us what was possible. It created a new level of awareness and forced handset makers to up their game. I believe that the very best is still in front of us.