Google May Sell Cable Box Unit For $2.5B

Google (NASDAQ:GOOG), the No. 1 search engine that bought the Motorola brand this year for $12.5 billion, may be near the sale of the cable TV set-top box unit that came with it, investment bankers said.

The Mountain View, Calif., company might be able to fetch as much as $2.5 billion for the unit, which the old Motorola Mobility Holdings got as part of its acquisition of General Instrument Corp. in 2000 for $17 billion.

Besides some private equity bidders, industry bidders are said to include Arris Group. (NASDAQ:ARRS), a major developer of servers for cable TV systems; France's Technicolor (PINK: TCLRY) which owns broad media assets and Pace (LON:PIC) of the UK, which claims to be the No. 1 maker of set-top boxes.

Google has been working with Barclays PLC (NYSE:BCS), which may indicate it was trying to interest Pace in the unit.

After Motorola Mobility was acquired in May, Google said it was most interested in streamlining its smartphone business that makes the Droid line and would cut as many as 4,000 jobs and shutter as much as 30 percent of its factories.

Even if it sold the unit, Google remains committed to its Google TV operation, though, following on the success of its YouTube division, which was acquired in 2006 for nearly $1.7 billion.

To date, Google TV has been installed on TVs, not set-top boxes, from manufacturers including Sony Corp. (NYSE:SNE) and private LG Group of South Korea.

Shares of Google rose 37 cents to $691.50 in Friday trading.