updated 12:05 am EST, Tue February 24, 2009
Moto to sell Good Tech
Motorola has found a buyer for Good Technology, its mobile e-mail division that it acquired two years ago for $500 million, according to the Wall Street Journal. Visto Corp will acquire the business, adding to its current mobile messaging services that are available through carriers such as T-Mobile International and Vodafone Group PLC. The purchase could help the provider compete against RIM, the company that currently holds a dominant market share in the mobile e-mail segment.
Trouble in the fall quarter lead to a net loss of $3.6 billion for Motorola during the three-month period ending in December, with much of the blame put on the Mobile Device group. The company plans to cut 7,000 jobs, while suspending cash dividends. An analyst a year ago suggested Motorola was considering closing its entire mobile division to reduce losses, although a more recent report claimed a reduction of 50 percent and a significant trimming of new phone launches.
Although the sale of Good falls in-line with plans to sell assets to raise cash, another contributing factor could be the avoidance of further legal expenses surrounding litigation that was spurred by Visto against Good in 2006. "They get rid of a failed business, take some employees off the books and end a lawsuit," said Ken Dulaney of Gartner Research.
Good Technology is known for products including Good Mobile Messaging on platforms such as the Moto Q or Palm Treo. The software package supports push e-mail and synchronization of calendar tasks with Microsoft Outlook and Microsoft Exchange. Good Mobile Intranet, part of the software suite, allows users to access Intranet content from Windows Mobile or Palm OS platforms.
Further details of the acquisition may be provided later this week, although neither company has provided information regarding pricing or other terms. Motorola likely sold the division at a drop in value since its purchase in 2006.