As Google inches closer to completing its Motorola Mobility acquisition, it made another strategic move in its mobile plans: today it announced it would sell its 6.5 percent stake in 4G operator Clearwire, for a value of $1.60 per share, or $47 million.
The sum represents a substantial discount on the share price of Clearwire, currently trading at $2.27, and a major discount on the $500 million it originally paid for the stake in 2008.
The news was confirmed in an SEC filing from Clearwire as well as a letter from Google explaining the sale, and comes a day after it was reported that Google would put Dennis Woodside, its VP of ad sales in the Americas, in charge of Motorola once its $12.5 billion acquisition of the handset maker is completed.
Sprint and Comcast, two other shareholders in Clearwire, are understood to have first refusal on the shares.
There is no specific explanation in Google’s letter for why it is selling the shares. Clearwire, a WiMAX operator, has had a long struggle competing against bigger mobile carriers in the U.S. At first, its unique 4G selling point set it apart from the pack, but as AT&T and Verizon have launched LTE services, that WiMAX network has looked a little less new.
It has needed a number of cash injections to help build out its network nationally, which has caused a lot of tension with its largest shareholder, Sprint. It has also undergone several management changes.
Having Google involved in Clearwire seemed to hint at the search and mobile giant also having ambitions to do more in offering wireless services to consumers directly – and indeed that is an area where Google itself has tried to buy spectrum at auction in the past. Perhaps with the Motorola acquisition nearly completed, the company has decided now to focus more on devices and services rather than delivery.
Clearwire, founded in October 2003 by telecom pioneer Craig O. McCaw, is a provider of simple, fast, portable and reliable wireless high-speed Internet service. Clearwire customers connect to the Internet using licensed spectrum, thus eliminating the confines of traditional cable or phone lines. Headquartered in Kirkland, Wash., the company launched its first market in August 2004 and now offers service in 50 markets across the U.S. as well as in Europe.
Google provides search and advertising services, which together aim to organize and monetize the world’s information. In addition to its dominant search engine, it offers a plethora of online tools and platforms including: Gmail, Maps, YouTube, and Google+, the company’s extension into the social space. Most of its Web-based products are free, funded by Google’s highly integrated online advertising platforms AdWords and AdSense. Google promotes the idea that advertising should be highly targeted and relevant to users thus providing...
Motorola is known around the world for innovation in communications and is focused on advancing the way the world connects. From broadband communications infrastructure, enterprise mobility and public safety solutions to mobile and wireline digital communication devices that provide compelling experiences, Motorola is leading the next wave of innovations that enable people, enterprises and governments to be more connected and more mobile. Motorola (NYSE: MOT) had sales of US $22 billion in 2009