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Microsoft to sell Internet TV unit Mediaroom to Ericsson

  • Article by: TROY WOLVERTON
  • San Jose Mercury News
  • April 8, 2013 - 9:39 PM

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 View, Calif., Mediaroom 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 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 a 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 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.

In recent years, Microsoft has augmented the video capabilities of the Xbox. Users can watch videos streamed from Netflix and Hulu, rent or buy videos from Microsoft’s Xbox Video service or even tune in live or on-demand TV from pay TV operators.

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