Video software

TiVo Angling for a Buyer?

11:20 AM -- TiVo Inc. (Nasdaq: TIVO) threw the book at AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) late last week over claims that the telcos are infringing on three DVR-related patents, including the "Timewarping" patent linked to TiVo's ongoing spat with Dish Network LLC (Nasdaq: DISH) and EchoStar Corp. LLC (Nasdaq: SATS). (See TiVo: AT&T and Verizon Won't Strike a Deal and TiVo-Dish DVR Slugfest Rages On .)

TiVo is holding its litigation strategy close to the vest, but Wedge Partners Corp. , a tech and media analyst firm based in Denver, is speculating that TiVo may be going through this trouble not necessarily to snare new license fees or big dollar sanctions, but instead to force AT&T's hand to acquire the TiVo.

"An acquisition by AT&T could play into the on-again, off-again M&A discussions that the telco has had with DTV [DirecTV Group Inc. (NYSE: DTV)]," the firm speculates. "It would probably not be the motivation for a deal between the two operators, of course, but it could be an added incentive." (See DirecTV Could Win Big at AT&T and AT&T-EchoStar Rumor Upgraded to 'Likely' .)

Moreover, such a deal would give DirecTV a "marketing edge" over Dish, and give AT&T "more leverage over its box makers in future equipment negotiations" -- which means over Motorola Inc. (NYSE: MOT) and Cisco Systems Inc. (Nasdaq: CSCO).

Plus a "nominal $1.5 billion price tag for TiVo, would not be significant," at least for a company with pockets as deep as AT&T's, Wedge Partners surmises. "Thus, even though T is constantly facing legal challenges in its normal course of business, the telco may consider whether it would be easier to buy TiVo than to fight it."

That idea has been vetted before, but from the position that EchoStar and Charlie Ergen might try to clean up the legal mess by pursuing a hostile takeover of TiVo and just be done with the whole thing.

— Jeff Baumgartner, Site Editor, Cable Digital News

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