Rumor mill: Ericsson looking to buy Microsoft's IPTV business

A report from Bloomberg citing "people with knowledge of the matter" says that Ericsson (Nasdaq: ERIC) is in negotiations with Microsoft (Nasdaq: MSFT) to buy its Mediaroom IPTV software business, a transaction that could be announced in just a few weeks.

Ericsson would not comment to FierceTelecom on the report.

Grabbing the IPTV piece of Microsoft could be a boon to Ericsson, which already has a solid foothold with carriers in the wireless segment of the telecommunications vertical. The manufacturer could market IPTV products to its existing telco customers that are competing with cable, satellite and over-the-top providers like Netflix (Nasdaq: NFLX) and Amazon (Nasdaq: AMZN) for a share of the viewing audience.

Microsoft's interest in IPTV involves delivering television through its best-selling Xbox games console, a source told Bloomberg.

It's been an up-and-down process for Microsoft Mediaroom. Last year, BT (NYSE: BT) dropped the platform, choosing Comcast's (Nasdaq: CMCSA) thePlatform in mid-March to drive its BT Vision and YouView IPTV services. However, AT&T (NYSE: T) remains Mediaroom's biggest customer among the 40 or so that Microsoft has signed so far, along with TDS Telecom (NYSE: TDS), which replaced its Minerva platform with Mediaroom in January.

Shares of Microsoft were up slightly in mid-morning trading on the Nasdaq, at $28.14, from its opening price. Ericsson was trading at $12.47, down from yesterday's close of $12.57.

For more:
- Bloomberg has this report
- Reuters has this story

Special Report: The top wireline mergers & acquisitions in 2012

Related articles:
BT moves onto thePlatform to drive its IPTV services
TDS turns on Microsoft Mediaroom for its fledgling IPTV service

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