Ericsson reportedly in line to buy Microsoft's IPTV biz

Microsoft (Nasdaq: MSFT) has never had the most stellar track record when it ventured into the TV business and apparently, that trend is continuing. The software giant, according to a Bloomberg report, is ready to offload its Mediaroom IPTV business to Ericsson (Nasdaq: ERIC) so it can concentrate on its Xbox gaming system.

Microsoft's biggest Mediaroom customer in the U.S. right now is AT&T U-verse. The Redmond software giant recently suffered an international customer blow when BT (NYSE: BT) decided to pull out Mediaroom and insert thePlatform from Comcast (Nasdaq: CMCSA) for its IPTV services BT Vision and YouView.

Aside from the Microsoft decision to exit IPTV, the Ericsson acquisition would "make sense (because) it provides for a more complete offering," Exane BNP analyst Alexander Peterc.

He was less excited about the whole IPTV technology aspect, however, noting that it "started to get hyped about 10 years ago and may have reached its peak already so I don't see this as a growth market."

Neither Ericsson nor Microsoft responded to questions from Bloomberg. Ericsson has been dancing on the edges of becoming a serious video delivery player and was rumored to be a frontrunner when Google (Nasdaq: GOOG) sold the cable/IPTV portion of its Motorola Mobility business to Arris (Nasdaq: ARRS) earlier this year. Microsoft, while pushing hard into IPTV at the beginning of the game, has been less visibly enthused of late.

"MediaRoom has gone from being a centerpiece of Microsoft's TV strategy to kind of sideshow," Colin Dixon, chief analyst of nScreenMedia told Bloomberg.

For more:
- here's FierceTelecom's coverage
- Bloomberg carried this story

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