Google is looking to unload the set-top box business it will inherit from Motorola Mobility even before it closes on the $12.5 billion acquisition, The Post has learned.
The move appears to be an about-face from last August, when Google CEO Larry Page, in announcing the deal, suggested the business would play a role in his plans for revolutionizing the living room.
Google isn’t the only player looking to get out of the business. As The Post reported exclusively last month, Cisco is also seeking to sell Scientific Atlanta, which along with Motorola has had a near duopoly on the set-top box business.
And at least two other smaller cable-box players, Pace and Thomson’s Technicolor, are also expected to test the marketplace by putting their businesses on the block, sources said.
Once the main conduit to the couch, the clunky cable box is viewed in many circles as an obstacle to a newer generation of software and devices capable of integrating TV and the Web.
Plenty of people predict that the box won’t survive the onslaught. For instance, Google offers its own Internet-connected operating system, Google TV.
“Software is the value, not the hardware,” said one set-top box executive.
Infonetics, a company that tracks the set-top box market, predicted that last year was the peak for the business and that sales will decline this year and beyond.
To be sure, some executives believe the set-top box will shrink but not fade away entirely.
“Boxes will get thinner because more intelligence will be in the ‘cloud,’ but you’ll still need a gateway to the home,” said one executive in the business.
That’s prompting speculation that private-equity firms may look to milk the business by rolling up the main players.
“We’re beginning to hear private equity stirring on how they could put it all together,” said one source.
While Google hasn’t put out a sales book on the set-top box business, it has enlisted Frank Quattrone’s investment bank, Qatalyst Partners, and Barclays Capital to help shop the asset.
“On a long-term basis, legacy set-top boxes don’t win,” one senior tech source said, adding that Google gets “10 times more data from their other devices than they can get from a cable box.”
Other sources have confirmed that, while it is still early in the process, Google is highly likely to sell off the business, in part because cable operators have shunned buying boxes from Motorola ahead of Google’s purchase.
Meanwhile, Motorola, which has been losing share, tried unsuccessfully to sell the business in 2009 for $4.5 billion.
With other devices such as Apple TV and Roku,stealing the show, the price tag is expected to be even lower. One source ballparked the price at anywhere between $2.5 billion and $4 billion.
“We don’t comment on rumor or speculation,” said a Google spokeswoman.