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Motricity Restructures: Closes Asia Operations, Will Focus On
Mobile Ads
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More woe for beleagured mobile services company Motricity: the
company today announced that it is restructuring operations,
pulling back from investments in Asia and focusing on growth in
North America in areas like mobile advertising and enterprise
services.
The news comes after a series of other developments that point to
the challenging market conditions for Motricity, which it is
weathering amid a lot of shareholder allegations around insider
trading and other fiduciary violations. Some of these shareholders
are now taking legal actions against the company.
SEE ALSO: Mobile Lowdown 9-26-11: Apple iPad Orders; Apple Event;
Samsung; Verizon
Four months ago, the company’s founder and CEO, Ryan Wuerch, left
the company and got replaced by president and COO Jim Smith as
interim CEO. In September 2011, Motricity secured a $20 million
loan from High River LP, a firm controlled by Carl Icahn, and at
the time said that it was exploring strategic alternatives for the
business, including a possible sale.
In its statement today, Motricity said that it planned to put more
investement into developing its mobile advertising and enterprise
businesses as it turned away from other parts of the business that
were “no longer strategic or profitable.” It did not provide any
detail of how big its Asian operations actually are. Its last
quarterly earnings statement, Q3 2011 from November 2011, did not
mention the region at all, and international carrier revenues were
worth $3.6 million, compared to $19.6 million from North American
carriers—although these could also include operations outside of
Asia, such as the UK. Q3 2011 revenues, Motricity noted, fell below
the company’s own guidance amid lower-than-expected international
sales.
Motricity has a large base of customers, ranging from mobile
operators such as AT&T (NYSE: T), Verizon and Vodafone (NYSE:
VOD), as well as top brands like Kraft, American Express and Coca
Cola, and offers a host of mobile data solutions, ranging from
messaging services through to mobile marketing and advertising.
Advertising in Q3 accounted for about $7 million in revenues, it
said.
We have reached out to Motricity to ask how today’s news impacts
employee headcount, and whether the company had any more news
regarding the hiring of a permanent replacement for Wuerch. We will
update this post as we learn more.
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By Ingrid Lunden
twitter @ingridlunden Jan 19, 2012 10:02 AM ET
Motricity Photo: Motricity
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Posted In: Advertising, Legal, Marketing, Mobile, Countries, Asia,
motricity