DailyTech - Google Looks to Shave Off Motorola's Set-Top Box Division, Pocket $1.5-$2.5B USD

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Hardware Google Looks to Shave Off Motorola's Set-Top Box Division, Pocket $1.5-$2.5B USD
Jason Mick (Blog) - December 7, 2012 9:59 AM

6 comment(s) - last by Arkive.. on Dec 10 at 1:05 PM

Sale would help focus Motorola Mobility on mobility

When Google Inc. (GOOG) bought Motorola Mobility, it was inevitable that big changes were in store. Bleeding cash, but with a lot of interesting assets -- a smartphone business, patents, and a set-top box business -- Google had chosen quite the fixer-upper.

The latter unit (set-top boxes) has been the focus of Google's latest restructuring efforts. Google will reportedly sell the unit, one of the largest producers of set-top boxes, in an auction to either a cable company like Arris Group Inc. (ARRS) or a private equity firm.

According to a report in The Wall Street Journal, a pair of sources say the auction could bring in between $1.5B and $2.5B USD for Google. Other potential bidders listed by the WSJ include France's Technicolor SA (EPA:TCH) and the UK's Pace PLC (LON:PIC).

The set-top box unit is currently engaged in a war with rival TiVo Inc. (TIVO) who produces the eponymous set-top digital video recorder (DVR). Both companies own key patents in the field and they are suing each other, each alleging infringement, in a conflict that mirrors the smartphone market's "patent war".

_{Motorola Mobility is a top set-top box maker. [Image Source: Kivan Technologies]}

The sale of the set-top box unit would allow Google to focus Motorola Mobility exclusively on smartphone objectives. Google has committed to laying off 4,000 Motorola staff globally, trimming the unit's workforce by 20 percent. If the set-top box unit sale is expected to represent a "refund" of between 12 and 20 percent of the unit's $12.5B USD purchase price, which Google paid last year.

Source: WSJ

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RE: Bad idea!

By Arkive on 12/10/2012 1:05:47 PM , Rating: 2

The problem is, when set top boxes do make their exit I think it will be sudden (or at least the writing on the wall will appear suddently). I suspect Google believes $1.5-2.5B now makes more sense than the profits they might make over the course of a few years (or less) and then being left with a company they can't sell (and the bad PR associated with layoffs).

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