Light Reading

Google Preps Sale of Motorola Home

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
8/6/2012
50%
50%

Google (Nasdaq: GOOG) is expected to put Motorola Mobility LLC 's cable assets up for sale as early as this fall, industry sources tell Light Reading Cable.

Multiple industry insiders and people in cable M&A circles confirm that Google has not yet started the formal sales process for the Home division, which makes and sells cable modems, set-tops, video processors, edge QAMs, cable modem termination systems (CMTSs) and video navigation software. However, there's strong consensus that Google will put Motorola on the block, though there's some variance on when the process will officially get underway. Barclays Capital is rumored to be the banker Google has hired for the sale.

According to one source, the expectation is that Google will get it going as soon as early September, and complete the initial round of bidding in October. Depending on how quickly things move, Google could have a deal in place by the end of November or by mid-December.

Another source says Google might require more time to finish its strategic assessment of the Motorola assets, and that it will likely strip out the intellectual property that's most import to Google before it puts the cable assets on the block.

How much IP Google decides to retain will affect its asking price. One source estimated that Google, which paid $12.5 billion for Motorola Mobility, might be able to get $2 billion for what's left of the Home business after it figures out what IP it wants to retain.

And the initial process and level of interest will probably determine if Google will end up selling all of those assets to one buyer or if it might be willing to split them into pieces.

Google could expand the number of potential bidders if it opts to split things up. A company like Pace plc , for example, might be interested only in Moto's CPE business, while Juniper Networks Inc. (NYSE: JNPR), if it jumps into the fray, might only have eyes for Home's network assets. Ericsson AB (Nasdaq: ERIC), which is said to have much interest in boosting its North American cable presence, may try to buy the whole thing. (See Light Reading Poll: Who Will Take Motorola Home?)

One source expects Google to trim it down to three to five potential candidates, and that there appears to be only a small chance that two Chinese interests -- Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) -- will even be invited to the party. "Google will be fairly selective on how they go about this," the person says.

Chatter about the fate of Motorola's cable assets has increased ever since cable industry vet Marwan Fawaz was named executive VP of Motorola Home late last month. Fawaz, who once served as a technology analyst for Paul Allen's Vulcan Ventures , succeeded Dan Moloney, who most recently served as president of Home. (See Motorola's Home Unit Hires New Leader and Motorola Home Adds M&A Expertise.)

Motorola recently transferred a "small portion" of its field engineering team to Telecommunication Support Services Inc. (TSS), but said the process was underway well before Google acquired the company.

Still, sources expect Motorola Home to make more significant moves later this year as Google prepares for a sale. (See Google Unloads Some Moto Engineers.)

— Jeff Baumgartner, Site Editor, Light Reading Cable

(7)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
JTiggy
50%
50%
JTiggy,
User Rank: Light Beer
12/5/2012 | 5:24:40 PM
re: Google Preps Sale of Motorola Home

I for one would hope our government would block a sale to China as having access to our home cable modems would allow them to determine what we could or couldn’t log on to on the net and who we sent/received e-mails from.  This would limit our freedom of speech and directly influence what we were able to have access too.  Hell, they could influence a presidential election which could favor them allowing them to help implement thier influence over our government and how we do business and with whom.   It really bothers me they are buying up all of our industries which we used to come to thier aid in WWII. They don't seem to appreciate that had we not come to their aid they might not be a nation today.  It pleased me to no end that they weren't allowed to buy 3-Com and it was the government that blocked that sale due to national defense.  Please Uncle Sam,  do it again!  I'd like to know where they are getting all their money from to buy everything, only 30 years ago they were still living in the stone ages. If they want to compete in the world market that’s fine but do it fairly (maybe they don't understand our sense of "fair play") and not on the backs of their cheap labor.  Ok, I'll get off my soap box now.

Tyler Durdon
50%
50%
Tyler Durdon,
User Rank: Light Beer
12/5/2012 | 5:24:40 PM
re: Google Preps Sale of Motorola Home


Ever since the conflict between Google and China that required China's approval of the sale I've been wondering if there was some behind-the-scenes negotiating that might help a Chinese company buy the cable business.  Of course the US gov't would need to be on board too.  Just think about it, a Chinese owned business with active network links into millions of American's homes...  access to your routers...  a foreign hacker's dream.

Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:24:39 PM
re: Google Preps Sale of Motorola Home


I totally agree with Craig on this one. If this is how Google decides to proceed it will be because it offers the least path of resistance if expediting a sale is a priority here. JB

Pete Baldwin
50%
50%
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:24:39 PM
re: Google Preps Sale of Motorola Home


Freedom of speech? Influence a presidential election? Oh, please.


I can understand a distrust of Huawei but this is way over the top. 

Tyler Durdon
50%
50%
Tyler Durdon,
User Rank: Light Beer
12/5/2012 | 5:24:37 PM
re: Google Preps Sale of Motorola Home
Some people just can't enjoy a good conspiracy theory.
msilbey
50%
50%
msilbey,
User Rank: Blogger
12/5/2012 | 5:24:34 PM
re: Google Preps Sale of Motorola Home


Forget the conspiracy. I'd be surprised at this point if any single company bought up all of the Motorola Home assets. Most of the encoding business is out on the west coast. There's the main set-top base in Horsham PA. And the CMTS and network infrastructure group up in Massachussetts. I don't know exactly how it will get parcelled out, but I'd bet the pieces get divvied up to different players. 

Tyler Durdon
50%
50%
Tyler Durdon,
User Rank: Light Beer
12/5/2012 | 5:24:14 PM
re: Google Preps Sale of Motorola Home


Interesting point, Motorola's CMTS never really took off (even the Motorola Horsham plant uses a lot of Cisco hardware in their labs) the group in Mass. is top-heavy with highy paid execs and not much engineering talent so they'd be a good cheap buy for a competitor just to get them off of the playing field.  The sttop business would be a good buy for any number of people since the wired customer base for cable/FIOS is still very big and still willing to pay for services.  I always thought it would be interesting to see Comcast buy them, or even Verizon. 

From The Founder
Against the odds, Huawei is growing its telecoms networking equipment business in the US -- that should be ringing some alarm bells for domestic vendors.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
Metaswitch's New CEO Martin Lund Discusses His Role

9|2|15   |   11:27   |   (2) comments


Technology industry veteran Martin Lund joins Metaswitch Networks this week as the company's new CEO. In this interview, Lund discusses his new role and the industry's progress with Light Reading CEO Steve Saunders. Lund believes that the industry disruption caused by SDN and NFV is creating opportunities for companies like Metaswitch – network software providers ...
Telecom Innovators Video Showcase
Nominum on Leveraging the Power of DNS to Deliver Superior Subscriber Experiences

9|2|15   |   07:13   |   (0) comments


Nominum CEO Gary Messiana talks about the challenges service providers face in competing for a much more sophisticated customer, a customer that has heightened expectations for more personalized and compelling digital experiences. Providers are focusing their efforts on delivering higher value subscriber services, retaining their existing customers and increasing ...
Between the CEOs
CEO Chat With Jeff Miller, ActiveVideo

8|28|15   |   19:05   |   (0) comments


Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
LRTV Huawei Video Resource Center
Vodafone: Mobile Money Is About Customer Trust

8|27|15   |   06.36   |   (0) comments


Light Reading spoke with Vodafone's Ian Ravenscroft about the unique responsibilities and opportunities facing operators handling customers' financial transactions over the network.
Telecom Innovators Video Showcase
Palo Alto Networks on Expanding in the Carrier/Service Provider Market

8|26|15   |   07:54   |   (0) comments


Alfred Lee from Palo Alto Networks tells Steve Saunders about their new chassis-based system, the PA-7080, and how it can benefit service providers compared to legacy firewalls.
LRTV Custom TV
Global Services Forum Preview

8|25|15   |   02:36   |   (0) comments


Light Reading's CEO and Founder Steve Saunders talks about Huawei's upcoming Global Services Forum with the help of Heavy Reading's Patrick Donegan and Teresa Mastrangelo.
Telecom Innovators Video Showcase
Infoblox on DNS Threat Index

8|19|15   |   04:39   |   (0) comments


Dilip Pillaipakam from Infoblox talks to Steve Saunders about his company's core network services.
Between the CEOs
CEO Chat With Ihab Tarazi, Equinix

8|14|15   |   20:18   |   (1) comment


Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about the dramatic changes in the data center, cloud and interconnect markets and discusses the impact of SDN and NFV in the coming years.
Telecom Innovators Video Showcase
The Netformx Ecosystem

8|14|15   |   09:39   |   (1) comment


Ittai Bareket, CEO of Netformx, talks with Steve Saunders about the Netformx Ecosystem, which employs cutting-edge prescriptive analytics to help solution providers maximize profits.
Telecom Innovators Video Showcase
Versa Networks on Leveraging VNFs

8|12|15   |   07:37   |   (0) comments


Kumar Mehta, founder and CEO of stealth mode startup Versa Networks, talks with Steve Saunders about how providers can best leverage virtualized network functions (VNFs).
LRTV Custom TV
Transforming the Network Through OPNFV

8|5|15   |   7:09   |   (0) comments


Sandra Rivera, VP Data Center Group; GM Network Platforms Group, Intel Corporation, on OPNFV Arno and how the industry is coming together to accelerate the deployment of NFV and transform the network.
LRTV Huawei Video Resource Center
Huawei ONS Product Demo

8|3|15   |   6:01   |   (0) comments


Huawei shows at Open Networking Summit 2015 in Santa Clara how its SDN and NFV solutions embrace openness.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
December 2, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Cisco's cloud and virtualization portfolio can increase business agility and innovation by building a more flexible network architecture.
Hot Topics
T-Mobile CEO Plays Data Traffic Cop
Sarah Thomas, Editorial Operations Director, 8/31/2015
CEO Chat With Bill Gates
Steve Saunders, CEO and founder, Light Reading, 8/31/2015
Time to Monetize Cable WiFi
Alan Breznick, Cable/Video Practice Leader, 8/31/2015
New Apple TV: More $$, Not Content – Report
Mari Silbey, Senior Editor, Cable/Video, 8/31/2015
Ex-AlcaLu Boss Tasked With Bolstering Altice
Iain Morris, News Editor, 9/1/2015
Like Us on Facebook
Twitter Feed
September 16, 2015
Wi-Fi First or Second?
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Technology industry veteran Martin Lund joins Metaswitch Networks this week as the company's new CEO. In this interview, Lund discusses his new role and the industry's progress with Light Reading CEO Steve Saunders. Lund believes that the industry disruption caused by SDN and NFV is creating opportunities for companies like Metaswitch – network software providers with the agility to embrace new technologies quickly and the ability to deliver on substantial projects for global network operators.
The scene: Last Saturday, lunchtime, the interior of a shi-shi-foo-foo eatery in Manhattan's SoHo district.
Cats with Phones
It's a New Age... Click Here
When smartphones replace stuffed animals.