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. 

Flash Poll
From The Founder
Ericsson's Hyperscale Datacenter System (HDS) 8000, featuring Intel's Rack Scale Architecture, caused a stir when it was announced at MWC 2015. For more on this revolutionary product, join me on Thursday, April 30 at 12:00 p.m. EST for a Super Webinar event, A New Hardware Paradigm for the Telco Data Center.
LRTV Documentaries
CableLabs' Clarke Updates Cable Virtualization

4|23|15   |   05:41   |   (1) comment


Former BT exec now leading CableLabs' NFV and SDN efforts explains key role of open source and updates efforts to virtualize the home network.
LRTV Interviews
Ericsson's CTO Talks Transformation: Pt. II

4|23|15   |   08:19   |   (1) comment


In the second installment of an in-depth two-part interview, Ericsson's CTO Ulf Ewaldsson talks to Light Reading CEO and founder Steve Saunders about cultural change, network slicing and technology advances.
LRTV Interviews
Ericsson's CTO Talks Transformation: Pt. I

4|23|15   |   09:27   |   (3) comments


In the first installment of an in-depth two-part interview, Ericsson's CTO Ulf Ewaldsson talks to Light Reading CEO and founder Steve Saunders about the incredible transformation underway in the communications networking industry.
LRTV Documentaries
LTE Paves the Way for the 5G Revolution

4|20|15   |   4:20   |   (0) comments


Håkan Andersson, head of 5G product strategy of the Radio Business Unit at Ericsson, discusses the role of LTE, the US and other industry verticals in building a true 5G ecosystem.
LRTV Documentaries
The 3GPP's Road to 5G Standardization

4|17|15   |   4:43   |   (0) comments


Satoshi Nagata, chairman of the 3GPP's TSG-RAN group and a manager at NTT Docomo, explains the standardization process for 5G, as well as the biggest challenges and opportunities.
LRTV Documentaries
AlcaLu CTO Makes the Case for a New 5G Air Interface

4|16|15   |   3:54   |   (0) comments


Michael Peeters, CTO of wireless at Alcatel-Lucent, explains why 5G will require a new air interface to meet its diverse performance targets.
LRTV Documentaries
AlcaLu + Nokia: The New Uber-Vendor

4|15|15   |   2:42   |   (4) comments


Heavy Reading Senior Analyst Gabriel Brown discusses the technological and competitive opportunities and challenges if a merger between Alcatel-Lucent and Nokia comes to pass.
LRTV Huawei Video Resource Center
Huawei's Data Center Power Play

4|15|15   |   6:22   |   (0) comments


Huawei has developed industry-leading energy efficiency capabilities for its indoor and outdoor data center solutions, explains Dr. Fang Liangzhou, vice president of Huawei's Network Energy product Line.
LRTV Huawei Video Resource Center
Huawei’s Routers, Switches Get the Green Mark

4|15|15   |   2:02   |   (0) comments


TUV Rheinland's Frank Dudley explains how Huawei's routers and switches have been successfully tested by energy efficiency experts and have gained Green Mark Certification.
LRTV Documentaries
A Finn, a Frenchman & a Guy From New Jersey Walk Into a Merger...

4|15|15   |   3:17   |   (0) comments


Stop us if you've heard this one before... Light Reading CEO Founder & CEO Steve Saunders weighs in on the technical and cultural implications of a Nokia and Alcatel-Lucent merger.
LRTV Huawei Video Resource Center
Accounting for Better Solutions

4|10|15   |   02:31   |   (1) comment


Murad Yousuf, CTO at Saudi Arabia's Ministry of Finance (Dept. of Zakat & Income Tax), talks about the benefits of deploying router technology from Huawei.
LRTV Huawei Video Resource Center
What's in Store for Huawei & DataCore?

4|10|15   |   05:44   |   (0) comments


At the CeBIT trade show in Hannover, Germany, George Teixeira, CEO of software-defined storage (SDS) specialist DataCore Software, explains why he has just signed a partnership agreement with Huawei Technologies.
Upcoming Live Events
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
In its latest survey covering network operators' plans and strategies for ICT transformation, Heavy Reading asked telecom operators worldwide to identify the most important goals and objectives for their ICT transformation initiatives. Heavy Reading also asked operators about the importance of a "digital first" strategy, which enables customers to complete an interaction across different digital channels, such as web and mobile self-service and social media.
Hot Topics
What if the Comcast Merger Fails?
Mari Silbey, Independent Technology Editor, 4/20/2015
Google's WiFi-First Mobile Service 'Fi' Is Here
Dan Jones, Mobile Editor, 4/22/2015
Comcast Merger May Hinge on Hulu
Mari Silbey, Independent Technology Editor, 4/22/2015
Comcast Formally Ends Its Bid for TWC
Mari Silbey, Independent Technology Editor, 4/24/2015
Google Ready to Release Thousands of Loons
Sarah Thomas, Editorial Operations Director, 4/20/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Many leading communications companies can claim to have undergone significant periods of reinvention during their histories, but none have been through more major ...
Data Center Interconnect, or DCI, is one of the hottest sectors in telecom currently. Since coming back to Light Reading last year, prodigal-son style, I've ...
Cats with Phones
Learning Curve Click Here
Pierre could never remember how to use Excel.
Latest Comment