San Diego Union Tribune: Motricity acquires M7 Networks in Stock Deal

August 3, 2005

Combined companies a wireless heavyweight
By Kathryn Balint, UNION-TRIBUNE STAFF WRITER

M7 Networks, a San Diego startup that creates "game lobbies" to let cell phone customers compare video-game scores and review games, has been acquired by Motricity of Durham, N.C.

The transaction was completed Friday and is expected to be announced today. Investors in M7 Networks received stock in Motricity in exchange for their stakes in M7, said Carl Eibl, chairman of M7. The value of the transaction is not being disclosed, he said.

Motricity, a privately held company much larger than M7 Networks, sells technology used by wireless providers to deliver information and content, such as ring tones, to subscribers.

M7 manages content much the same as Motricity only for cell-phone video games.

Combined, Eibl said, the two companies "manage just about every piece of content or information for wireless carriers that you can imagine."

Eibl is a managing director of Enterprise Partners, a San Diego venture capital firm that joined with Qualcomm and Sienna Ventures to invest about $15 million in M7.

The company was started five years ago. Its first product was a "high-score service" that allowed players of video games on cell phones to compare their scores with one another. The service is available on Verizon Wireless.

The company later created virtual game lobbies, where players can keep "buddy lists" and send text messages to their competitors, for Sprint and Cingular Wireless.

M7's chief executive, William Erickson, will not remain with the new company, Eibl said. One reason, he said, is that Erickson lives in Connecticut.

"It was all done very amicably," Eibl said. "It just didn't make sense to have a guy in Connecticut trying to run the San Diego operation of a company based in North Carolina."

David Buckley, M7's chief technology officer, has been tapped to manage the San Diego facility, Eibl said.

He said Motricity plans to keep a presence in San Diego, retaining the rest of the 15 employees. Eibl said the company has plans to increase its operations here.

Motricity, armed with $80 million in venture capital funding, received $30 million of it last month. The company said at the time that it planned to use the money for acquisitions and expansion overseas.

Before its acquisition of M7, Motricity employed 200.

Kathryn Balint: (619) 293-2848; kathryn.balint@uniontrib.com