We have been hearing rumors over the last two months, first on InfoSpace buying Motricity, and then the other way around: Motricity buying INSP’s mobile’s division. Now Triangle Business Journal reports that the second deal is about the happen, that is Motricity will be buying InfoSpace’s mobile business, in a bid to strengthen its chances of filing for its long elusive IPO later this year. Also, The Durham, NC-based company is finishing up the process of raising as much as $175 million from the private markets for the acquisition. I expect InfoSpace (NSDQ: INSP) to keep its mobile search division and sell the mobile infrastructure division only.

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For INSP, for which its mobile business has been a money loser, generated about $70 million in revenue in H107. That number is expected to fall drastically in the second half after the revenues generated from Cingular’s ringtone business goes out of the company’s profit-and-loss statement, the story says.

InfoSpace’s focus after this deal would then be online and mobile search and directory business, which includes such properties as Switchboard.com and DogPile.com, and its mobile search operations.

Needham Co analyst commented on the reported deal this morning (PDF link): “For Infospace, the sale would streamline the business, improve profitability, and bring in cash that could be used to strengthen the company’s Online division and/or to buyback stock. Valuing Infospace’s Mobile unit is difficult as recent M&A transactions are not comparable. If valued at $100MM, or roughly 1.3x revenue, the remaining Online business’ implied valuation is currently 4x EBITDA.”