Report: Google wants to dump Moto's STB business

Google (Nasdaq: GOOG) is looking to sell the set-top-box business it is inheriting as it acquires Motorola Mobility (NYSE: MMI), according to the New York Post.

The paper, citing unnamed sources, said Google is using Qatalyst Partners and Barclays Capital to help sell Motorola's STB division, even before its own $12.5 billion deal to acquire the company is wrapped up.

Motorola in 2009 tried to offload its STB business with an asking price of $4.5 billion. It was too rich a bid then, and, with the development of other devices like Roku, Boxee, Apple TV--which is likely being re-released with more processing power today--and the rapid adoption of connected TVs by consumers, the asking price today may be even lower.

Last week, the Post reported--again using unnamed sources--that Cisco (Nasdaq: CSCO) was shopping its Scientific Atlanta set-top-box business as well, a report the company pooh-poohed later as just a rumor without denying it explicitly.

There's little doubt, however, that the STB industry is struggling.

"On a long-term basis, legacy set-top boxes don't win," one senior tech source told the Post, adding that Google gets "10 times more data from their other devices than they can get from a cable box."

Other sources told the Post that Google's purchase of Motorola, and the lengthy regulatory approval process, have put cable operators off the Motorola STB, slowing sales.

The Post reported that private equity firms "may look to milk the business by rolling up the main players."

For more:
- see this New York Post report

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