US paper: Google to sell Motorola STB business
By Robert Briel
March 8, 2012 10.00 Europe/London
Google is looking to sell the set-top box business it will inherit from Motorola Mobility even before it closes on the $12.5 billion (€9.5 billion) acquisition, according to The New York Post.
The paper’s sources said other STB makers are also looking to exit the market, with Cisco ready to sell its Scientific-Atlanta business and Pace and Technicolor also considering selling out. Private equity firms are considered possible bidders.
Google has hired Qatalyst Partners and Barclays Capital to help sell the Motorola STB business, said The New York Post. Google is thought to be selling the business because cable operators have shunned buying boxes from Motorola ahead of Google’s takeover of the company.
Google declined to comment, but foloowing the newpaper report, Google announced that it is rebranding the Android Marketplace as “Google Play” and is giving content, including $0.99 movie rentals, a much more prominent place in its plans.
Stephen Froehlich, senior analyst with the Consumer Electronics Research Group, was quick to comment on the developments. “It is hard to believe that the timing of the New York Post leak is coincidental to the announcement of Google Play. Instead, I believe that Google is wisely working to preserve the trust of Motorola’s set-top box customers.
“Motorola Mobility designs and builds some of the most complex pay-TV networks on the planet. It is the trusted friend and supplier to Comcast, Cox, Charter, Verizon, AT&T, and others. However, as a subsidiary-to-be of Google, Motorola Mobility instantly became a frenemy. Absent rumors of the set-top box business sale, today’s rebranding of the “Android Marketplace” as “Google Play” would likely undermine that trust even further, which could impact Motorola Mobility’s profitable set-top box business.
Froehlich continues, “It has been the analysis of IMS Research since the acquisition was announced that the combination could impact the value of the set-top box business and that as a result a spin-off was expected, regardless of what Google decides to do with the Motorola handset business. By leaking the spin-off before the deal closes and before the Google Play announcement, Google is actually doing the best it can to preserve the value of the set-top box business and retain the trust of its customers.”