Microsoft to sell Mountain View-based Mediaroom unit - San Jose Mercury News

twolverton@mercurynews.com For more than a decade, Microsoft has tried various ways to marry the Internet to the television. Now the company has decided to focus its Internet television efforts on its Xbox game console. On Monday, the tech giant announced that it has struck a deal with Ericsson to sell its Mediaroom business unit. Based in Mountain, Media makes set-top box software for AT&T and other pay TV companies that deliver television video using Internet transmission methods. "With the sale of Mediaroom, Microsoft is dedicating all TV resources to Xbox in a continued mission to make it the premium entertainment service that delivers all the games and entertainment consumers want — whether Microsoft logos hang over their booth on the opening day of the International Consumer Electronics Show (CES) in Las Vegas in this file photo taken January 10, 2012. REUTERS/Rick Wilking/Files (RICK WILKING) on a console, phone, PC or tablet," said Yusuf Mehdi, a corporate vice president in Microsoft's interactive entertainment division. The companies did not disclose how much Ericsson is paying for the Mediaroom unit, but CNET News, citing an anonymous source "familiar with the deal's terms," reported the amount to be "just south of $200 million." A Microsoft representative declined to comment beyond the blog post and a news release. Ericsson representatives did not respond to requests for comment. The companies expect the deal, which is subject to regulatory approval, to close in the second half of this year. Mediaroom employs more than 400 people worldwide. Its software is largely used by telephone operators around the world who want to offer pay television service, and has been deployed by 40 companies worldwide on some 22 million set-top boxes in use by more than 11 million households. The software allows set-top boxes to record television programs and to tune in live and on-demand channels streamed using Internet protocol. With IPTV, operators are able to send just one or a handful of video streams to each customer, rather than broadcasting all available channels to all customers, which is how cable TV systems typically operate. In recent years, Microsoft has augmented the video capabilities of the Xbox. Users can watch videos streamed from Netflix (NFLX) and Hulu, rent or buy videos from Microsoft's own Xbox Video service or even tune in live or on-demand TV from pay TV operators. The deal will boost Ericsson's market share to about 25 percent of the IPTV market, the companies said in the announcement. In recent trading following the announcement, Microsoft's shares were down 20 cents, or about 1 percent, to $28.50, while Ericsson shares were up 12 cents, or 1 percent, to $12.23. Contact Troy Wolverton at 408-840-4285. Follow him at Twitter.com/troywolv. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHZ-l69y6pzmdhAKpEmaiDr58Xc2w&url=http://www.mercurynews.com/business/ci_22980246/microsoft-sell-mountain-view-based-mediaroom-unit

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