December 20, 2012
Google Slims Down Its Motorola, Sells Cable Box Unit
Michael Harper for redOrbit.com — Your Universe Online
Motorola´s set-top box business, Motorola Home, will now be sold for $2.35 billion to Arris Group Incorporated, a small, British high-speed Internet equipment company. This cash-and-stock deal was announced late Wednesday evening, driving up Arris´ stock by 17%. As a part of this deal, Arris has agreed to pay Google $2.05 billion in cash and $300 million in brand new Arris shares. Once this deal goes through, Google will have roughly a 16% stake in Arris.
Arris said it plans to use their new acquisition to deliver “next-generation consumer video products and services” as well as new “industry-leading” products for broadband customers.
Arris will also get access to some of Motorola´s patents from the deal.
"This transformational combination of two complementary businesses will create a leading end-to-end provider of today's video, data, and voice products and tomorrow's next-generation IP-based broadband products," said Bob Stanzione, Chairman and CEO of Arris in a statement.
The Motorola acquisition “also adds expertise in video and a larger presence in the home to our core strengths in voice and data, ensuring we are even better positioned to capitalize on and manage the evolution toward multi-screen home entertainment,” continued Stanzione.
According to the statement, Motorola Home has been a profitable business, earning $3.4 billion in revenues for the last four quarters. This acquisition is expected to save Arris up to $125 million a year in operating costs.
It´s only been a little more than 7 months since Google purchased Motorola Mobility for $12.4 billion in order to shore up their legal defenses with Motorola´s 17,000 mobile patents. There had been rumors that Google would sell off this set-top box business even before the acquisition was finalized.
This move is simply yet another in a line of actions meant to strip away all that´s not important for Google. It´s becoming increasingly clear that what are important for the search giant are those mobility patents and their smartphone and tablet business.
In August, Google announced they would cut 20% of their workforce, or 4,000 jobs.
While Google has made it clear that they were focused on Motorola´s patents when they purchased the company, Motorola Home had become something of a liability for Google as well.
When this trial goes to court next year, it will be Arris´ trouble to handle.
Google took on a few battles when they acquired Motorola, such as the litigation between Motorola and Microsoft. Recent publicized reports show that neither Microsoft or Motorola can agree to licensing terms and royalties due pertaining to some of these mobile patents.
Apple and Motorola have even been duking it out in the ITC over some of these patents.
On Tuesday, a judge found that Motorola´s patent covering a proximity sensor was invalid, thereby clearing Apple of patent infringement.
These recent legal setbacks has even caused Florian Mueller of the Foss Patents blog to question if Google made a good decision when they purchased Motorola and jumped into these battles.
“For Google, after paying $12.5 billion for Motorola Mobility, the litigation record against Apple and Microsoft (the two companies against which it primarily wanted to use Motorola's patents) is a disaster of gigantic proportions so far,” said Mueller.