BlackBerry mulling BBM spin-off ahead of potential company sale

BlackBerry mulling BBM spin-off ahead of potential company sale

Summary: The smartphone maker is considering spinning off its BlackBerry Messenger service into a new company, one report says, as the company continues its slide into the red.

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TOPICS: BlackBerry
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(Image: CNET/CBS Interactive)

BlackBerry is reportedly looking into spinning off its instant messenger division into its own separate company

The report from The Wall Street Journal on Tuesday, citing sources familiar with the matter, said a separate BlackBerry Messenger company would operate with "more independence."

Details were scarce: although, the subsidiary would be named BBM Inc., according to the report.

It comes at a time where the Canadian smartphone maker continues to weigh up its strategic options ahead of a potential sale. Earlier in August, BlackBerry announced the forming of a special committee to, among others, "possible joint ventures, strategic partnerships or alliances, a sale of the Company or other possible transactions."

The company faces a difficult time ahead amid financial uncertainty. While the company's cash reserves are relatively stable year-over-year, the firm is cutting staff in efforts to reduce costs. BlackBerry also has no debt, making it a more attractive company to buy.

BlackBerry increased its mobile instant messenger's profitability by opening it from the walled fruit-themed devices to Android and iPhones earlier this year, following the launch of its latest BlackBerry 10 operating system. It also teamed up with rival smartphone maker Samsung — which was rumored to be interested in buying the firm, though denied by the company — in efforts to reach out to a wider African audience, where BlackBerry sales are still lukewarm.

The company also announced its own social network, BBM Channels, which is hoped to boost subscriber numbers. However, the company closed its BBM Music service earlier this year, just two years after announcing the service.

BlackBerry Messenger has around 60 million users, according to the Journal, down from 80 million about a year ago.

Topic: BlackBerry

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  • What does this mean.

    "...as the company continues its slide into the red.."

    Please explain what this means. They are in the red. They are not continuing to slide into it.
    They are close to break even.
    Susan Antony
    • English Language Lesson

      It means BlackBerry reported a loss last quarter and will report another loss this upcoming quarter. I guess in delusional fan mode 84 million loss is close to break even. Don't worry, upcoming quarter will be in hundreds of million loss, then what will you say?
      techvisor123
  • They are considering a lot of things.

    That is what the committee is for. To brainstorm and consider all types of options. The vast majority of them will be ignored.
    Susan Antony
    • they should not be...

      discussing this publicly, you don't hear IBM telling the world what it is options are. They formulate a plan after taking advise, pass it by the board and then tell the public.

      What the management has done at BB is reckless, it has caused uncertainty for both it customers and its developers.

      I would not want to buy a BB again and I certainly would not consider putting in any effort if I was a developer.

      BB10 is really good, sack the management.
      pjc158
  • Big mistake

    If BB sells off BBM what makes BB10 different then any other Smart phone from Apple or Samsung.

    If they sell off BBM what is next.

    In competent management, BB is lacking a leader with vision.
    pjc158
    • What's next you ask?

      Possibly BES? That might be worth more than BBM??
      wizard57m-cnet
  • They could become a SAS company.

    Licencing BES and BBM to all other vendors in order to have superior email services. Since they dont seem to care about making a good phone themselves. its just a shame that they invested so much in QNX only to just flush it all down the tubes.
    Jimster480