Motricity restructures to focus on mobile advertising, enterprise

Beleaguered mobile services firm Motricity will restructure its business, shifting away from its signature content and data solutions to focus on the mobile advertising and enterprise space.

Motricity will work with operators, brands and creative agencies to deliver merchandising, advertising and marketing services leveraging predictive analytics technologies. The firm will expand its sales unit and invest in product development, adding it is currently at work on the next version of its platform. 

While Motricity will continue to supply services to mobile carriers in the North American market, it will close its Asian operations. Earlier this month, an SEC filing revealed Motricity had terminated its relationship with Indonesian mobile operator XL Axiata, which accounted for about 11 percent of Motricity revenues during the first nine months of 2011.

With Motricity's stock price in freefall, founder and CEO Ryan Wuerch left the company in August 2011; Jim Smith, named Motricity president and COO in early 2009, currently serves as interim CEO. Immediately following Wuerch's exit, law firm Goldfarb Branham LLP announced a class action against Motricity concerning alleged violations of shareholder protection laws. Goldfarb Branham claims the firm inflated its stock through distorted and false statements and may have engaged in insider trading.

Another class action suit filed by Kahn Swick & Foti LLC accuses Motricity of violating the Securities Act of 1933 and the Securities Exchange Act of 1934. According to the suit, Motricity priced its June 2010 IPO at $10 per share, for net proceeds of $51.4 million, but misled investors by asserting the company would "continue to achieve success despite the increasing popularity of smartphones."

Last fall, Motricity entered into a $20 million term loan financing arrangement with High River Limited Partnership, a venture capital firm owned by activist investor Carl Icahn, who owns approximately 14.6 percent of Motricity's outstanding shares. At that time, the company said it was exploring strategic options including a spinoff, sale or other transactions involving its operator business and mobile marketing initiatives.

For more:
- read this release

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