Motricity acquires InfoSpace’s mobile division for $135M: Deal signals InfoSpace’s exit from wireless biz

Shares of InfoSpace Inc. shot skyward after the company said it will sell its mobile services division to Motricity for $135 million in cash.
Motricity will acquire InfoSpace’s managed services infrastructure for mobile carriers, including technology and services such as mobile search, storefronts, portals and messaging services. The long-rumored deal comes on the heels of InfoSpace’s spin-off of its online directory business, and effectively signals the Seattle-area company’s exit from mobile.
The acquisition, which is expected to close in the next 90 days, expands Motricity’s customer base to include 11 of the 13 largest carriers in North America, including the four tier-one U.S. operators.
“We’re combining two of the best companies in the industry to create the premier provider of mobile platform infrastructure,” said Motricity CEO Ryan Wuerch. “Between us, we have unparalleled experience in mobile platform development, systems integration, innovation and building world-class technology with a proven ability to scale-powering the mobile marketplace including the largest operators and media companies in North American and Europe.”
Carl Icahn, who participated in a Series H round of financing for Motricity in February, provided a “significant” sum to help secure the deal.
Once a powerhouse in the mobile content space, InfoSpace closed its mobile publishing business last year after its direct-to-consumer approach failed to find an audience. The firm recently reported a $28.1 million net loss in the second quarter and projected a loss of $55 million to $57 million for the year.
Shares of InfoSpace surged following the announcement, gaining almost 15% before settling at $19.35, up 7% from Monday’s opening price of $18.13.