Analysis: Google's $12.5B Deal For Motorola Mobility May Create Big Problems For Cable

Google To Become Mobile Handset Power With $12.5B Deal For Motorola Mobility
We can only imagine the look on Time Warner Cable CEO Glenn Britt’s face when he learned that Google agreed to pay $12.5B for Motorola Mobility. But I doubt it was a smile. The Google news didn’t simply bury TWC’s announcement today that it will pay $3B to buy Insight Communications, which includes 750,000 cable customers many of whom live in rural areas in Kentucky, Indiana, and Ohio. Executives at the highest levels of the business say that Britt reaffirmed his commitment to cable just as Google raised new questions about the prospects for pay TV. The Web giant is about to become a major force in the industry: Motorola Mobility and Cisco are pretty much a duopoly as suppliers of cable set top boxes and the software that operators use to serve them. And Google very much wants to mix Web video with traditional cable channels — a thought that petrifies many operators and programmers. The company is trying to blend the distribution channels in its Google TV service, which has mostly left consumers cold. But that could change. Credit Suisse analyst Spencer Wang says that Google has “a significant opportunity” to capitalize “not only (on) its Google TV platform, but also its ownership of YouTube.” No wonder Matthew Polka of the American Cable Association, a trade group that mostly serves small pay TV companies, says his members “will want assurances from Google that it is both committed to the cable business model and won’t use its market power to run roughshod over smaller cable operators.” (more…)

This article was printed from https://deadline.com/2011/08/analysis-googles-12-5b-deal-for-motorola-mobility-may-create-big-problems-for-cable-157754/