It’s official. Microsoft Corporation (NASDAQ:MSFT) has finalized a deal with Ericsson (NASDAQ:ERIC) (STO:ERIC-A) (STO:ERIC-B) for its TV streaming software. It was revealed in late March that the two were in talks for Ericsson to acquire the IPTV software from Microsoft, and today Microsoft announced on its blog that the deal has been finalized.
The IPTV software, also known as Mediaroom, is used by numerous companies to deliver television via an Internet connection. AT&T Inc. (NYSE:T) is one company which uses it for its U-verse product. Ericsson (NASDAQ:ERIC) (STO:ERIC-A) (STO:ERIC-B)’s acquisition of the software enables it to compete better with television providers and enhance its focus on services and software.
Modern Day Asset Management
ValueWalk's Raul Panganiban interviews Ross Klein, CFA, and Vince Lorusso. Ross is founder and CIO at Changebridge Capital and Vince is Partner and Portfolio Manager at Changebridge Capital where they manage the CBLS, Changebridge Capital Long/ Short Equity ETF and CBSE, Changebridge Sustainable Equity ETF. The following transcript is computer generated and may contain some Read More
Meanwhile, Microsoft Corporation (NASDAQ:MSFT) will be able to focus more on its consumer television strategy through the Xbox. In today’s announcement, Microsoft said it would dedicate “all TV resources” to the Xbox as it focuses on turning it into an essential entertainment destination.
The deal is expected to close in the second half of this year. Neither company has disclosed the purchase price of the Mediaroom software.
Of course this could very well mean that Microsoft has even bigger plans for its Xbox than what we’ve seen so far. There’s been speculation that we will see the next generation in June at the Electronic Entertainment Expo. At the very least, it’s likely that the next generation Xbox will be out in time for Christmas.
At the moment of this writing, shares of Ericsson (NASDAQ:ERIC) (STO:ERIC-A) (STO:ERIC-B) were up .12 percent at the NASDAQ, while Microsoft Corporation (NASDAQ:MSFT) shares were down .67 percent at the NASDAQ.