Rumours of a Google spinoff of Moto's TV biz rise again

Michelle Clancy | 08-08-2012

Rumours of a Motorola Home spinoff have dogged the $12.5 billion Google-Motorola Mobility acquisition since it was announced a year ago, but a new report indicates that the Intternet search giant will soon indeed put the TV division up on the block.

Unnamed sources have told Light Reading Cable that while no formal plans have been determined, Google has retained Barclays Capital to manage the auction and sale should it occur, which could happen as early as this fall.

Google is looking to gain $2 billion out of the sale, the sources said, which could help Google recoup the shortfall between the cost of the Moto acquisition and the value of the patents for which it was acquired. Those patents represent $5.5 billion in intellectual property and are central to future development of the the Android mobile operating system.

The Moto Home division builds set-top boxes, cable modems, gateways, video compression software and more for pay-TV operators. Despite the ongoing investment in the connected home on the part of service providers, Google has little experience with the role of infrastructure vendor, and, arguably, Moto is plateauing in its bread-and-butter market: North American cable STBs. It maintains an overall No. 2 position in overall STB revenue, according to Infonetics Research.

There has been speculation that Google could leverage Motorola's incumbent position in U.S. homes to bolster Google TV, which can be integrated into connected televisions and STBs. However, it is unlikely that Motorola's operator customers would be supportive of such a strategy.