- ‘Queen of Mean’ Leona Helmsley’s former home hits market for $65M
- Florida beach-goers told to beware flesh-eating bacteria in water
- Lundergan Grimes uses ‘war on women’ strategy to attack McConnell
- Rep. Jeff Miller: ‘Ain’t no leash for VA’
- Al Qaeda nets $125M from ransom payoffs from Europe since 2008
- Ohio Gov. John Kasich cruising to re-election: survey
- Landslide hits Indian village; 150 may be trapped
- Albania bank loses $7M in theft; police arrest 2
- Gov. Mike Pence irked as Obama sends illegals to Indiana on sly
- Israel, White House say Obama phone call to demand cease-fire was fake
Google to sell part of Motorola for $2.35 billion
Question of the Day
SAN FRANCISCO (AP) - Google is selling Motorola Mobility’s TV set-top business for $2.35 billion, lightening the load that the Internet search leader took on earlier this year when it completed the biggest acquisition in its history.
The cash-and-stock deal announced late Wednesday will turn over Motorola’s set-top division to Arris Group Inc., a relatively small provider of high-speed Internet equipment that is looking to become a bigger player in the delivery of video. Investors applauded the move, driving up Arris‘ stock by nearly 17 percent.
The set-top boxes were never a big allure for Google, although the company is interested in finding ways to pipe its service on to TVs so it can sell more advertising.
Google prized Motorola for its portfolio of more than 17,000 mobile patents. Those form an arsenal that it can use in a fierce battle that has broken out over intellectual property as smartphones and tablet computers have emerged as hot commodities in recent years.
Motorola also makes smartphones and tablets, a manufacturing business that Google will retain, despite lingering concerns on Wall Street about the hardware shrinking Google’s profit margins and possibly alienating other device makers that use the company’s Android software.
Besides not being a natural fit for Google, Motorola’s set-top box also has become a potentially expensive liability. Digital video recorder pioneer TiVo Inc. is seeking billions of dollars in damages in a lawsuit alleging that Motorola’s boxes infringed on its patents. Those claims are scheduled to go to trial next year in federal court in Texas.
Although they declined to provide specifics, Arris Group executives told analysts in a Wednesday conference call that Google still must cover most of the bill for any damages or settlement that TiVo might win.
TiVo already has negotiated about $1 billion in combined settlements in other patent-infringement cases it has brought against other companies, including Dish Network Corp., AT&T Inc. and Verizon Communications.
The proposed sale of Motorola’s set-top division calls for Google to receive $2.05 billion in cash and $300 million worth of Arris stock. If the deal wins regulatory approval, Arris Group expects to take over the division before the end of June.
Google will also pare its expenses, something likely to please investors concerned about Motorola being a drag on the company’s earnings. Arris said about 7,000 people work in Motorola’s set-top division. Google ended September with about 53,500 employees, including 17,400 who worked on the Motorola side of its operations. More than 20,000 people worked at Motorola Mobility when Google became the owner in late May, but the payroll was slashed as part of an effort to pare the losses that have been piling up within Motorola as its once popular cellphones lost market share to Apple Inc. and Samsung Electronics.
In the past year ending in September, Motorola’s set-top operations generated $3.4 billion in revenue. That makes it twice as big as Arris Group, whose revenue totaled $1.3 billion during the same period. Arris Group, which is based Suwanee, Ga., had earned $39 million through the nine months of last year after suffering a loss of nearly $13 million for all of 2011.
“This represents a great leap forward for Arris,” CEO Bob Stanzione said during Wednesday’s conference call.
TWT Video Picks
- Boehner rules out impeachment: 'Scam started by Democrats'
- Patent workers paid to exercise, shop, do chores: report
- Fla. mom arrested for allowing 7-year-old son to walk to park alone
- CARSON: Rudderless U.S. foreign policy
- Obama thanks Muslims for 'building the very fabric of our nation'
- Obama mum on where illegal immigrant children are sheltered
- Smugglers, rainstorm combine to poke holes in border fence
- Defense lawyer: McDonnell's wife had 'crush' on CEO
- Federal judge grants 90-day stay in D.C. gun case
- Feds sue Pennsylvania State Police over women's fitness tests
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world