ADOTAS — New name, stronger game. New Motion, Inc. announced today that its plan to integrate and reorganize the company’s newly combined enterprise has been approved by its board. New Motion officially merged with Traffix on Feb. 4; going forward, it will be known as Atrinsic, Inc.
Atrinsic hopes to maximize both companies’ strength and grow its presence in the online marketing and mobile entertainment worlds.
“Today’s introduction of the Atrinsic brand symbolizes the emergence of Atrinsic as a leading digital advertising and mobile entertainment network,” said Burton Katz, CEO of Atrins in a release. “Atrinsic is the product of two great companies — New Motion — a mobile entertainment company — and Traffix — a performance-based online marketing company. The result is a mobile and Internet digital media powerhouse, with the depth and breadth to meet subscriber and customer expectations in this rapidly growing and evolving space.”
The company will organize into two divisions: Atrinsic Entertainment and Atrinsic Networks.
Atrinsic Networks’ hopes to drive one of the more significant merger synergies — margin expansion through vertical integration. A large proportion of the marketing that the Atrinsic Entertainment groups engage in now will be through Atrinsic Networks. This is expected to create significant cost savings through the elimination of third-party margins. In the last six months of 2007, New Motion spent 50% of its marketing budget, or approximately $10.2 million, on Traffix media. The margins that Traffix booked on such sales will now be eliminated, the benefits of which will now accrue directly to Atrinsic shareholders.
The synergy will also pump up the bottom line, the company says. Katz expects to see $145 million to $160 million in online media ad sales in 2008. In 2007, New Motion is expected to report net sales of $36.7 million and Traffix expects to report $89.1 million in net sales.