Consolidation in the mobile content space remains white-hot, with Motricity Inc. the most recent player to tap the booming off-deck market with the acquisition of GoldPocket Wireless Inc.
Terms of the deal were not disclosed.
Motricity has gained substantial traction with its Fuel software, which powers on-deck mobile storefronts for wireless operators and media companies. GoldPocket powers off-deck content activity and has carried out high-profile, text message-based marketing campaigns with partners such as CNN, CBS and NBC.
The companies have worked together on messaging campaigns supporting television broadcasts including NBC’s “The Apprentice,” CBS’ “Big Brother” and the Olympics.
The move is a crucial step for Motricity, which has an impressive customer list—Cingular Wireless L.L.C., Palm Inc. and Europe’s O2 plc all use the Fuel platform—but had yet to establish much traction away from carrier decks. Off-deck activity has boomed in the last 18 months, analysts say, and the trend is expected to continue as media companies and major brands look to approach users directly through their handsets.
Just as importantly, however, Motricity garnered overnight relationships with a slew of TV networks and other high-profile content providers.
“We did a lot of due diligence around who has the leading technology and platforms for mobile marketing and campaign management,” said Motricity Chief Executive Officer Ryan Wuerch, “and all of our due diligence—in every single test—GoldPocket ranked No. 1 in every category.”
That claim apparently didn’t prevent Motricity from courting at least one other major player, however. The company reportedly was negotiating a deal earlier this year to land m-Qube, which eventually was acquired by VeriSign Inc. for $250 million. That acquisition came amid a flurry of activity that saw Amdocs Ltd. snap up Qpass for $275 million and a smaller player, Wireless Services Corp., pick up content aggregator Mobile Media North America.
Regardless, GoldPocket, which will take the parent company’s name, appears to be a good fit for the Durham, N.C.-based firm. In addition to its content partners, the company’s expertise in text polling and other interactive campaigns provide a solid base for more sophisticated mobile marketing efforts.
But the companies may face headaches in integrating their technologies and businesses, one competitor warned.
“GoldPocket is a smart acquisition for Motricity,” said John Puterbaugh, CEO of Nellymoser Inc., which also powers mobile storefronts for well-known brands. “But the challenge going forward is integrating each of the technologies into one solid offering. Media companies are looking for one cohesive technology that gives them a direct relationship with mobile consumers.”
Motricity doesn’t discuss revenues or profitability, but earlier this year the company closed a $40 million funding round led by Advanced Equities Inc., which followed a $30 million round last summer. The company hopes to increase its momentum as operators whittle their content aggregator relationships down from dozens to just a handful. And it hopes to couple its reach with GoldPocket’s marketing expertise to target specific users with customized offerings.
“Motricity has over 120 million subscribers going through our data centers, and that puts us in a very unique position,” said Wuerch. “Ultimately, we’re going to know what that 14- to 34-year-old user is buying on a Friday or Saturday night.”
